AIB Investors OK Bailout, Pelt Leaders With Eggs

AIB was a perennial favorite for Irish investors planning for retirement because the bank paid particularly strong dividends to encourage such investment. Then Ireland's property bubble burst and recession hit in 2008.

Under terms of the bailout, the government will receive a 25 percent stake in AIB and dividend payments totaling euro280 million annually.

AIB — which for months claimed it didn't need any help at all — dramatically changed its position in recent weeks as evidence mounted that its in-house estimates for defaulting loans were hopelessly optimistic.

Gleeson reiterated the bank's recently unveiled ambition to top the government's euro3.5 billion with an additional euro1.5 billion generated from selling off its own assets, including potentially AIB's 24 percent stake in M&T Bank Corp. in New York. Many analysts have expressed doubts that the bank can drum up the full amount without more state help, raising the question of whether AIB will end up fully nationalized.

AIB also is paying the government a euro120 million annual premium to participate in a state bank-insurance system launched in October 2008.

The government's next initiative — to create a "bad bank" called the National Assets Management Agency — is supposed to remove from the books of AIB and other Irish banks their most troubled loans. The government estimates that liability at euro90 billion, equivalent to nearly half of Ireland's gross domestic product.