Allied Irish Banks
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Template:Infobox Company Allied Irish Banks plc (AIB),Template:Ise, Template:Lse, Template:Nyse, Template:FWB is a commercial bank based in Ireland not to be mistaken for Anglo Irish Bank. AIB is one of the so called Big Four commercial banks in Ireland.
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Services
The bank has one of the largest branch networks in Ireland, with only Bank of Ireland fully rivalling it. It offers a full range of personal banking services, including loans, credit cards, and mortgages. It offers life assurance and pensions through its wholly owned subsidiary, Ark Life Assurance.
The bank also offers the full range of corporate banking services. AIB Capital Markets is the division of the company that offers international banking and treasury operations. It offers stockbroking services through its subsidiary Goodbody Stockbrokers.
Internationally, AIB operates mainly in the United Kingdom (as Allied Irish Bank (GB) and First Trust Bank in Northern Ireland) and Poland (as BZ-WBK). It also owns a 22.5% stake in the United States bank M&T Bank.
Name
Allied Irish Banks is usually referred to, both inside and outside the company, as simply AIB and often incorrectly as "Allied Irish Bank". In Northern Ireland however, the bank is known as First Trust Bank, while in Great Britain, it is called "Allied Irish Bank (GB)" - the only part of the operation where the full name, in the singular, is still in day-to-day use.
Initially, the bank operated under the names of its former constituent companies, alongside a new AIB logo, a circle divided in three with an "A" at the centre. From 1970, these were replaced by "Allied Irish Banks". In 1990, AIB introduced a new logo (prompted, it was said in some quarters, by the remarkable similarity between its previous logo and that of Mercedes-Benz.). Since then, the bank has preferred to be referred to as simply "AIB", though "Allied Irish Banks plc" remains its legal name.
History
Allied Irish Banks was formed in 1966, bringing together three distinctive Irish banks. The Provincial Bank, founded in 1825, pioneered branch banking in Ireland. The Royal Bank, established eleven years later, was famous for its mercantile links. The Munster & Leinster, formed in 1885, was the largest of the three banks with the most extensive branch network.
An alliance was seen as the best way to overcome the fragmented nature of the Irish banking industry. Ireland in the mid-1960s was changing fast and the merger strengthened the banks’ position in the emerging global business era.
Over the decades, AIB has become an increasingly international organisation. The creation of a branch network in Britain in the 1970s was followed by an investment in the USA in the 1980s.
In 1983, AIB first invested in First Maryland Bancorp in the USA. In July 1997, AIB acquired Dauphin Deposit Corporation which was merged with First Maryland Bancorp to form Allfirst in 1999.
In July 1991, the merger of AIB Group's interests in Northern Ireland with those of TSB Northern Ireland created First Trust Bank.
AIB invested in the emerging economy of Poland by gradually building a majority shareholding of 60.1% in WBK between 1995 and 1996. In June 1999, AIB reached an agreement with the Polish State Treasury to acquire an 80% shareholding in Bank Zachodni SA. In June 2001, AIB completed a merger of the two banks to create Bank Zachodni WBK. The combined bank is a leading Polish bank in terms of asset size and key product market shares.
In April 2003, a deal merging AIB’s US subsidiary, Allfirst, with M&T Bank Corporation was completed. This move was promted by the John Rusnak affair. In a "rogue trader" case similar to that of Nick Leeson, Allfirst employee Rusnak lost $691m in foreign exchange deals. AIB now has a 22.5% stake in M&T which is headquartered in Buffalo, New York. AIB maintains representative offices in the United States in Chicago, Philadelphia, Atlanta, San Francisco, Los Angeles, and White Plains.
In 2004 it was revealed that the bank had been overcharging on foreign exchange transactions for up to ten years. The overcharging affected customer purchasing foreign drafts. Initially the projected amount of overcharging was €14m. However the bank has set aside €50m to cover the cost of refunds.
In 1966, AIB's aggregate assets were €323.8 million – as at 31 December 2005, the AIB Group had assets of €133 billion.
Current developments
The bank is currently involved in several high profile deals. Their Capital Markets division is advising the Irish govornment on the privatisation of the country's national airline Aer Lingus. They are also providing the finance for the Doyle family's bid to take control of the Jury's group of hotels. The bank is said to be considering selling its stake in M&T.
The bank is currently involved in a number of "sale and leaseback" deals with its properties. In 2005 it sold an extension to its Ballsbridge Bankcentre headquaters for €367m. There also plans to sell the remainder of the building for €275m, as well as the bank's branch network for €421m.
In February 2006 the bank announced record pre-tax profits of €1.7 billion, a 23% rise on the previous year and the largest ever for an Irish bank. The majority of the increase came from its Republic of Ireland operations, but with its Capital Markets, Northern Ireland, Great Britain, Poland and American divisions also making significant contributions. This led to criticism from some newspapers, as their profit per customer is up to three times that of other European banks. Irish Labour Party leader Pat Rabbitte called for more competition in the Irish banking sector.