History Allied Irish Banks

1 history

1.1 history
1.2 1985 ici collapse
1.3 international growth
1.4 recent history

history

allied irish banks limited formed in 1966 new company acquired 3 irish banks: provincial bank of ireland, royal bank of ireland, , munster & leinster bank. banks saw alliance best way overcome fragmented nature of irish banking industry. ireland in mid-1960s changing fast , merger strengthened banks’ position in emerging global business era. in 1966, aib s aggregate assets €323.8 million—as @ 31 december 2005, aib group had assets of €133 billion.

early history

1825 saw provincial bank commence operations, pioneering joint stock branch banking in ireland. established branch in london. royal bank of ireland (rbi) commenced operations in 1836, becoming known mercantile links. shaw’s bank merged royal bank in 1837.

1864 saw munster bank established. in 1867 munster bank purchased of branches of unsuccessful union bank of ireland. in 1870 munster bank acquired long established private bank david la touche & son. in 1885 munster bank failed due mismanagement , fraud , liquidated. however, munster , leinster bank commenced operations. become largest of 3 banks extensive branch network.

in 1923 royal bank of ireland bought irish free state business of belfast banking company, in turn bought northern ireland business of royal bank. on decades, aib has become increasingly international organisation. created branch network in britain in 1970s.

1985 ici collapse

the can of worms @ ici headline in business & finance magazine on 8 november 1984. insurance corporation of ireland (ici) wholly owned subsidiary of aib when collapsed in 1985 losses of on £200 million. when discovered in november 1984 ici operating below statutory reserve ratio, request further capital made aib — ici had returned profit of more £80 million previous year. collapse occurred @ time of deep economic recession in ireland. level of government debt @ time 116% of gdp. irish taxpayer bailed ici out of difficulties. irish government did ensure continuation of insurance business , protect policyholders. aib claimed not resolve problems of ici without putting core banking business in jeopardy. investment of £85 million aib in ici written off , cost irish taxpayer £400 million.

international growth

allied irish banks logo (1990–2016)



allied irish banks former crest

in 1983, aib invested in first maryland bancorp in usa. in july 1991, aib merged group s interests in northern ireland of tsb northern ireland create first trust bank. in july 1997, aib acquired dauphin deposit corporation merged first maryland bancorp form allfirst in 1999.

concerning poland, aib invested in poland gradually building majority shareholding of 60.1% in wielkopolski bank kredytowy (wbk) between 1995 , 1996. in june 1999, aib reached agreement polish state treasury acquire 80% shareholding in bank zachodni sa. in june 2001, aib completed merger of 2 banks create bank zachodni wbk sa. aib owned 70.5% of combined bank, leading bank in poland in terms of asset size , key product market shares. on 9 september 2010 aib reached agreement sell 66% stake in bz-wbk santander 3.1 billion euro, balance of shares sold on open market. purchase on 66% have forced santander make offer buy entire company.

recent history

between 1999 , 2001 aib had interest in keppel tatlee bank in singapore, withdrew after oversea-chinese banking corporation (ocbc) acquired keppel tatlee.

after suffering large losses due activities of rogue trader john rusnak @ allfirst (see below) in april 2003, aib completed deal merging allfirst m&t bank corporation, headquartered in buffalo, new york. in november 2010, aib sold 22.5% stake (26.7 million shares) in m&t. shares sold @ $77.50/share , generated $2.1 billion. sale part of aib s effort raise capital amidst ongoing financial crisis in ireland. aib maintains representative offices in united states in chicago, philadelphia, atlanta, los angeles, , white plains.

at beginning of 2008 aib entered latvian, estonian , lithuanian markets acquiring amcredit mortgage finance business baltic american enterprise fund. aib operates branch of financial group in estonia , lithuania (update needed), operations in latvia have ceased (see below). in 2008 aib operated through local branches providing financial services under established amcredit brand in 3 countries. amcredit operated single product mortgage business, company expanding range of banking products. amcredit s mortgage customers automatically became customers of aib branch in country. goal of aib become full service customer focused bank in baltic region. branch in latvia operating between november 26, 2007 (date of registration) , september 20, 2012 (date of liquidation). mortgage portfolio of 800 loans acquired swedbank.

in february 2008, aib entered agreement acquire 49.99% interest in bulgarian american credit bank ad, specialist provider of secured finance small , medium-sized companies in bulgaria.

the irish government received shares of €3.5bn in aib in 2009 part of measures recapitalise bank.

in april 2010, aib announced irish government receive stake of 16% or 17% in bank. irish state had been due receive dividends on shares, eu regulations state banks state aid cannot make cash payments. forced aib give government shares instead.