AIB says it's recovering from impact of €765m loss

Allied Irish Banks says it's shaking off the impact of an alleged €765m fraud at its US subsidiary.

Foreign currency trader John Rusnak has been blamed by bosses for losing the cash from Baltimore-based Allfirst in what was described as a "web of concealment".

Mr Rusnak has co-operated with the FBI investigation into the loss.

His lawyer has repeatedly denied that Mr Rusnak stole any of the money the bank lost.

The loss has been blamed on Mr Rusnak betting unsuccessfully that the yen would rise against the dollar and then trying to cover his tracks, eventually losing the cash as he tried to cover up his failed deals.

In a trading update, AIB says "there was some reduced business momentum" after the losses at Allfirst were uncovered earlier this year.

"However, our business is now steadily recovering from the damage inflicted by the fraud."

The bank says: "A programme of work is well under way to implement all of the actions decided on by our board arising from the Allfirst fraud, as well as to meet the requirements of our regulators."

AIB says Allfirst is determined to meet the highest expectations of shareholders and regulators.

It adds: "Our Allfirst franchise is showing resilience and encouraging trends following the losses incurred by the foreign exchange fraud."