AIB will look to external markets for funding

ALLIED IRISH BANKS hopes to start raising funding on the external market now that the Government has capitalised the lender to ensure its balance sheet is proofed against further economic shocks.

“We are still dependent on the goodwill of the ECB and Europe,” executive chairman David Hodgkinson told a conference webcast from Glenties, in Co Donegal.

“We are lessening our dependence all the time. As the capital has come into place we will be actively looking at ways to raise funds from the external market so that the dependence on the ECB continues to lessen.”

“(But) because the deposit base in Ireland’s domestic economy is insufficient for domestic lending, we will depend on international funding in some way, ideally market funding, for some time to come.”

Yesterday, the bank announced the Minister for Finance Michael Noonan and the National Pensions Reserve Fund Commission (NPRFC) have made capital contributions in the aggregate amount of €6.054 billion to AIB for no consideration.

As a result of the proceeds of the capital-raising and the capital contributions, AIB has now received the necessary capital to meet the PCAR Requirement.