AGM: The large financial institutions have given AIB one year to show solid progress in terms of preparing its US subsidiary, Allfirst, for sale.
Speaking to The Irish Times ahead of the bank's annual general meeting next week, a number of fund managers have indicated they are broadly satisfied with the bank's handling of the €760 million fraud but want to see the bank exit the US market.
Mr Joe O'Dwyer, fund manager at Montgomery Oppenheim, said many of the institutions had sent very strong messages to the bank about Allfirst.
"AIB has been told we do not expect to see it put any new capital into Allfirst. The goodwill attached to it has been damaged and the value of that franchise has fallen. We would want to see signs of its being rebuilt within a year."
There are also concerns about the relationship between the boards of AIB and Allfirst. The Irish Times has learned that the Allfirst board threatened to resign en masse if the bank's chief executive, Ms Susan Keating, was removed in March. AIB's decision to retain her in that position angered many investors but its decision to appoint Mr Eugene Sheehy to oversee the running of Allfirst has provided some reassurance.
The bank has been meeting the institutions in recent weeks and months to reassure them about the long-term prospects for AIB. The cancellation of the bonuses of the senior management team has gone some way towards appeasing investors.
Small shareholders will get their first opportunity to question AIB chairman, Mr Lochlann Quinn, chief executive, Mr Michael Buckley, and other board members at Wednesday's meeting.
A number of shareholders have proposed resolutions to remove the entire board of directors in response to the Allfirst debacle. They are unlikely to succeed, however, as most of the large investment institutions are not seeking widescale changes at the bank.
Mr Des Doran, fund manager at Standard Life, said any further blood-letting would not be in the best interests of its policyholders. "We don't follow the Financial Times school of thought that everybody has to be fired."
The meeting will be held at the Culloden Hotel in Belfast. It will begin at 11 a.m. Those who wish to travel by train from Dublin will have to take the 7.40 a.m. from Connolly Station, which arrives in Belfast at 9.45 a.m. AIB has arranged a bus service to meet shareholders at the station and transport them to the hotel.
