AIB US subsidiary Allfirst remains financially sound according to the company’s latest filings with the US Scurities and Exchange Commission (SEC).
The SEC filing reveals that AIB has provided $800 million to support Allfirst following the losses incurred by foreign exchange dealer Mr John Rusnak.
The support package comprises $500 million in short-term funding and $300 million in longer term notes varying from six months to five years.
Despite suffering a foreign exchange loss of $691 million, Allfirst’s annual 10K filing for 2001 confirms the company’s capital ratios remained above the appropriate "well capitalised" levels.
The company’s Tier 1 and total capital ratios - key indicators of the financial health of banks - are 6.96 per cent and 10.59 per cent, respectively, compared with the 6 per cent and 10 per cent required for "well capitalised" status.
Tier 1 capital consists primarily of common equity and preference shares less goodwill and certain intangible assets.
But the filing warns "a continuation of negative press coverage, combined with reputational harm to the Allfirst name, arising from the FX losses, could have an adverse impact on the company's results of operations".