AIB restructuring to be approved

Allied Irish Banks is set to win European Commission approval for a restructuring plan tied to its €21 billion taxpayer rescue, according to two people with knowledge of the matter.

The final verdict on the bank’s plan will be released as early as today, said the people, who asked not to be identified, as the matter is private.

Officials from AIB, the European Commission and Government, which owns 99.8% of the bank, declined to comment.

The bank, which was almost annihilated after Ireland’s property collapse, has already implemented much of what is in the plan, shrinking its balance sheet and workforce since its initial state rescue five years ago. Chief executive David Duffy said on March 5 he didn’t expect any “material issues” in the final plan.

The bank, which filed the first draft of its plan in 2009, may start repaying its bailout after European stress tests this year, Duffy said in March.

Allied Irish, Bank of Ireland and Permanent TSB are the only three lenders left of the six rescued by the Government since 2008.

Bailed-out lenders must have their restructuring plans approved by European authorities.

Bank of Ireland’s plan was approved in 2010, while Permanent TSB’s is still pending.

Since its bailout, AIB sold its Polish unit to Banco Santander in 2001 for €3.1 billion and its minority stake in Buffalo, New York-based M&T Bank Corp. for about €1.5bn.

It has also disposed of securities firm Goodbody Stockbrokers and asset management unit, and eliminated 2,500 jobs through a programme of voluntary job cuts.