EBS, the former building society now owned by AIB, has moved €2.5 billion of prime mortgages into its covered bond bank to be used as collateral to borrow from the European Central Bank.

The lender used €1.25 billion in three tranches of funding to borrow about €1 billion liquidity from the ECB last November.

The tranches of loans in the mortgage bank have maturities ranging from three to five years.

Covered bonds backed by residential mortgages are among the loans that can be used as collateral by banks to draw ECB funding.

EBS has about €15 billion of residential mortgages on its books.

It has emerged that the director of retail at EBS, Dara Deering, whose departure was announced last month, is joining Belgian-owned KBC Bank Ireland as head of retail operations.

The chief executive of EBS Fergus Murphy is leading the restructuring or “transformation process” at AIB, which will determine where the proposed 2,000 redundancies at the bank will be found, while also managing the former building society.

Meanwhile, two other guaranteed banks have refinanced about €7.5 billion of “own-use” bonds issued to themselves, guaranteed by the Government and used to borrow from the ECB.

Irish Life & Permanent rolled over €3.3 billion of debt raised through a self-issued bond on Thursday, according to details of new Government-backed debt published on the National Treasury Management Agency’s website. The bond will mature in May.

Bank of Ireland raised two self-issued bonds yesterday for €2 billion and €2.2 billion, both of which are due to be repaid in April.