Allied Irish Banks is preparing to cut as many as 2,500 employees, 500 more than the figure signalled by the lender in April, according to reports today.

Bloomberg said the increase in people leaving was in part linked to plans to eliminate overlap in staff working in EBS, which was merged with AIB in July. Sources told the agency that the staff reductions may be detailed as early as this week.

State-controlled AIB announced redundancy plans last April but has been unable to accept voluntary redundancies from staff due to the absence of an agreement on the terms with the department.

An AIB spokeswoman declined to comment on the reports.

The Irish Bank Officials Association said it was seeking urgent meetings with AIB management and the Department of Finance following the reports.

However, the association said it could not comment on the speculation as AIB was yet to provide it with details of its redundancy proposals.

AIB chief executive David Duffy said in an internal email to staff last month that the bank was close to reaching an agreement on the package and was working to finalise terms with the Department of Finance.

The Government has injected €20.8 billion into AIB and its subsidiary, EBS, taking a stake of more than 99.8 per cent in the bank.

Irish Bank Resolution Corporation, the nationalised lender that was formerly Anglo Irish Bank, set a cap of €175,000 on payments made to staff under a redundancy package last year.