Customers are deserting Allied Irish Banks in droves, and deposits have fallen by over $20 billion from the beginning of the year.
Most of those withdrawing funds were institutional investors who moved their money once AIB lost its top ratings from financial agencies.
The banks troubles show yet another reason why the IMF/European Union felt the need to intervene as the banks in Ireland are undergoing yet another liquidity crisis.
The bank has said it would raise $8 billion in a sale of new shares but now say they will increase the size of the placing.
The bank has also already agreed to the sale of its Polish subsidiary.
“Challenging economic and market conditions are reducing operating profits overall, and in each of our divisions, relative to the same period in 2009,” AIB said in a statement.
“Factors reducing our net interest margin this year include lower capital income, lower treasury income, lower income on loans pending transfer to Nama and higher wholesale funding costs.”
Bad debt charges were what was anticipated they said with expectations, the bank said.
They stated that about 2.6 per cent of owner occupier mortgages were in arrears for more than 90 days, in comparison to c2.1 per cent at the end of the last quarter.
The bank noted that future trends would be “strongly influenced” by the unemployment rate.
“The outlook in our markets is uncertain with additional stress likely from the implementation of the Irish and UK budgets,” AIB said. “We are carefully and thoroughly assessing these impacts and market conditions.”
The bank has fired about 600 staff.
“A lower cost base aligned with the bank’s reduced size is a key part of our plans to improve the future performance of the bank."
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After living in Ireland for almost one year, this is what I’ve learned