AIB in €900m Allfirst bail-out - report

The Allied Irish Bank has spent €900m in the past two months to save its US subsidiary, Allfirst, according to reports this morning.

The loans were necessary to help the subsidiary survive following foreign currency losses incurred by trader John Rusnak.

When news of Mr Rusnak’s $750m losses first broke, some of Allfirst’s corporate customers reportedly demanded a higher return on bonds they had invested in the bank.

The Baltimore branch had to buy back $300m worth of these bonds.

In addition, one multi-million dollar class action lawsuit has also been filed against Allfirst and its directors.