February 16, 2011
By Staff Reporter
AIB agreed to sell the bank to New York-based M&T bank after it was a victim of a $691 million fraud perpetrated by one of its foreign currency traders, John Rusnak, who has been sentenced to 7 1/2 years in prison.
Under the deal’s terms, AIB will take on board 22 percent of M&T. Allfirst, based in Baltimore, has raised its provisions for potential bad debts on one large telecommunications loan, said to have been to WorldCom, by $52.7 million.
According to U.S. Securities and Exchange Commission documents, Allfirst profits were hit by a number of exceptional charges in the three months to the end of September that sharply reduced its performance in the third quarter.
The biggest charge included the $27.3 million cost of an early retirement program that has been put in place at Allfirst. The chief financial officer, Maurice Crowley, said last week that 224 of its 6,000 staff have already been signed up as eligible for the scheme. In total, 270 people had applied by the cut-off date at the end of October.
Rusnak pleaded guilty to fraud charges and has been sentenced to an open prison for his part in the fourth-largest bank fraud in history.