Allied Irish eyes fourth quarter cash call on loss

Minority state-owned Allied Irish Banks aims to sell its overseas assets by September and raise more capital in the fourth quarter, it said yesterday after reporting a more than doubling of first-half losses.

Allied Irish last month scraped through European stress tests with a Tier 1 ratio of 6.5 per cent, after including the €7.4bn of capital it is yet to raise to plug the hole left by transfers of property loans to the National Asset Management Agency (NAMA), Ireland’s “bad bank”.

Its loss in the first half of 2010 widened to €1.73bn from a loss of €786m a year ago, after losing €963m on the first tranche of NAMA transfers, it said in a statement. It said it remained on track to carry out “a placing and/or a rights issue” in the fourth quarter to raise the rest of the €7.4bn required after the asset sales.

“We have to sell the assets against a countdown clock,” group managing director Colm Doherty told analysts, referring to the Irish financial regulator’s end of year deadline to raise the new capital. “We are having to do so in immensely volatile markets,” he said.

Allied Irish warned it would need more government support, in part through a state guarantee scheme for its liabilities due to end in December.