AIB division president quits

The president and chief executive of Allfirst, the US division of Allied Irish Banks that was rocked by a €700m currency trading scandal, has resigned

Susan Keating, who survived an upper management purge after the losses were unveiled in February, will leave at the end of this month, the bank said today.

Her departure follows former Allfirst chairman Frank Bramble, who left the bank on June 1.

‘‘Susan’s deep organisational knowledge and key insights into our business have been vital to our considerations,’’ said Eugene Sheehy, Allfirst’s executive chairman.

‘‘We agree on most issues but have debated some aspects of the best way forward for the company. Susan’s strong convictions, professionalism and management have served Allfirst well.’’

Sheehy will assume Keating’s position with the company. Keating, 51, has been Allfirst’s president and CEO since 1996.

Philip Hosmer, an Allfirst spokesman, said Keating and Sheehy disagreed over banking strategies for Allfirst.

‘‘I would not characterise this (Keating’s resignation) as sudden,’’ Hosmer said. ‘‘Over the past few months, there has been a strategic review of the company. There were philosophical differences about the future direction of Allfirst between Eugene and Susan.’’

In February, Allfirst announced a loss of about €700m in foreign currency trading that it blamed on rogue trader John Rusnak.

Officials said Rusnak, 37, entered fictitious options trades into Allfirst’s computerised records to make it appear the bank was making money - and so he could keep earning bonuses that were tied directly to his trading.

Rusnak was charged last month with bank fraud, false entry in bank records, and aiding and abetting. He has pleaded not guilty to all charges.

Allied Irish Banks, Ireland’s biggest financial institution, revamped Allfirst’s management staff in March after an independent report cited errors in Allfirst’s foreign trading department.

Richard Bove, managing director of the securities firm of San Francisco-based Hoefer & Arnett, said it was only a matter of time before Keating left the bank.

‘‘It would appear that this decision was made six months ago,’’ Bove said. ‘‘If Allied Irish had moved rapidly and eliminated a whole bunch of people immediately after a scandal of that magnitude, there would have been serious concerns about the health and future of the company.

‘‘The advisable thing to do was to wait until the issue settled and then to make changes.’’