AIB loses €10.4bn, plans to cut more than 2,000 jobs by end of 2012

AIB has confirmed it is to cut more than 2,000 jobs by the end of next year.

AIB has confirmed it is to cut more than 2,000 jobs by the end of next year.

The announcement is contained in the bank's annual results, which have been released to the stock exchange this morning.

The country's largest bank, which is almost fully nationalised, has also confirmed it suffered a loss of €10.4bn in 2010.

AIB executive chairman David Hodgkinson said branch closures were not being contemplated as part of the projected job losses, with most of them achieved through voluntary redundancies.

He said the job losses would be spread across the organisation as the bank needs to "slim down".

“We expect to get the vast majority on a voluntary basis,” he told RTE Radio. “The first thing we have to do is to agree with our major stakeholder, the Government, on what is appropriate and then we will start the consultation period with the union.”

Mr Hodgkinson said he believed the bank should be "reasonably generous" to staff facing redundancy.

The executive chairman said the group’s losses were about poor- quality loans where the bank does not not expect to get paid.

“There was almost a kind of collective madness, everybody went crazy on property and for a very long time,” he said.

Losses related to transfers to NAMA came in at €7bn.

AIB and EBS are to merge and become one of the country's two pillar banks, as announced by the Government in their banking restructuring plans.

In a statement this morning, the bank said the merger will form a strong foundation from which a profitable business can be rebuilt.

AIB employs around 12,000 staff through its Irish divisions, with another 2,507 in its UK operations.

The bank said the commitment of further state support highlights its systemic importance to the domestic economy.

“The very strong capital base that will result from the generation of €13.3bn of capital will enable AIB to provide long-term support to its customers and play an active role in the recovery of the Irish economy,” the bank said in a commentary on the results.

Some €7.2bn in state support has already been pumped into the bank.

The €10.4bn loss last year compares with €2.3bn in 2009.

AIB, once Ireland’s largest bank but now 92.8% state-owned, needs another €13.3bn bailout after the results of long-awaited stress tests.

The Government plans to shrink the state’s creaking banking sector from six homegrown lenders to two so-called pillar banks.

AIB and EBS Building Society will merge to form one banking “pillar”, while Bank of Ireland will form the second.

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