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Govt to raise stake in Allied Irish Banks

ALLIED Irish Banks confirmed yesterday that the government’s stake in the bank has reached 18.6 per cent and that its core Irish business continues to face challenges from weak consumer demand and higher costs of funding.

As had been expected, the bank said it is making an annual coupon payment on €3.5bn (£3bn) in government preference shares in the form of ordinary shares, bringing the government’s stake to 18.6 per cent, not counting warrants.

Allied Irish has to raise €7.4bn in fresh capital to compensate for losses on transfers to Ireland's “bad bank” scheme, the National Asset Management Agency.

“Trading conditions in the year to date remain challenging,” it said.