AIB Group may not make public the full facts behind the $750 million (€859 million) fraud at its US subsidiary Allfirst when its internal investigation is completed next month. The bank has said there may be competitive and defamatory issues that may prevent it from revealing the details of the fraud.
AIB's report will focus on where management or control failures occurred and investigate whether internal and external collusion was a factor in the fraud.
The board has ordered an investigation into the fraud at its Allfirst subsidiary in Baltimore to be completed within 30 days.
The bank is expected to announce the appointment of an "eminent" individual to oversee the terms of reference of that inquiry in the coming days. A spokesman said the inquiry's report would go directly to the AIB board and would not be reported through the group executive committee.
Asked to outline the bank's reasons for and against publication, a spokesman said it was too early to do this. But he pointed out that the report could contain defamatory, competitive or other confidential information which would mean it could not be published in full. It was possible an edited version could be published, he added.
Investors will be anxious to learn of its findings and recommendations as an indication of the confidence it can have in the bank in the future. Ms Ann Fiztgerald, secretary general of the Irish Association of Investment Managers, which represents large institutional investors, said the report's main findings would have to be made public.
An expert will also be appointed to work with AIB's group treasury operations, including those in the US and Poland, which have been centralised in Dublin.
The spokesman said the eminent individual would have "standing and expertise in the financial services industry". That person will have unrestricted access to information and staff to assess the adequacy and scope of the internal review and its findings.
Yesterday, Commerzbank Securities cut its rating for the troubled bank, citing concerns about the credibility of AIB's management team in the light of the fraud. Commerzbank suggests AIB shares will make fairly modest progress in the near term, setting a price target of €12.40 compared with a previous target of €13.50.
The shares made further gains in Dublin yesterday closing at €12.15 up 40 cents, buoyed by some speculation about a possible takeover bid.
In its note, Commerzbank said its downgrading of the stock was based on concerns about "the longer-term implications for the credibility of both management and the company's broader strategic agenda".
Market analysts have been calling for heads to roll at the highest level of the bank following this week's revelations. AIB said no resignations had been offered by any of the executives closely associated with these events. Chairman, Mr Lochlann Quinn, has indicated the bank will await the findings of its internal inquiry before considering what action is necessary.
A key focus of the report will be to examine the controls in place at Allfirst's treasury operations and why the foreign exchange dealer's activities were not picked up by the internal audit function. Allfirst has is own independent audit function, which reports to the US bank's president and chief executive, Ms Susan Keating.
The treasury function was also independently run in the US but will now be controlled by AIB Capital Markets in Dublin.
Meanwhile, the Irish Bank Officials Association (IBOA) has welcomed reassurances from AIB management that it is financially sound and that staff jobs are secure. "We have received assurances that the situation in the US would not threaten the job security, pensions or negotiated terms and conditions of AIB staff on this side of the Atlantic."
IBOA general secretary, Mr Larry Broderick, said the investigation must be transparent to prevent any further shocks. "Lessons must be learned."
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