Bank's jewels sell-off makes failures crystal clear
News that AIB is to sell its most precious Polish jewels for €3.1bn crystallises the extent to which its former boss Eugene Sheehy and his colleagues mismanaged what was once Ireland's most powerful bank.
Despite the sale of its Polish business to Banco Santander and impending deals to dispose of its US and UK businesses, it is still likely the Government will end up with a majority stake in a bank with the worst loan book in Europe.
The fact that this fire-sale raised this much money is a relief for the Government as it reduces the potential funds it may yet be called on to inject into this distressed institution.
The bank must find €7.4bn by the end of December to meet new regulatory requirements. The sale of its 70pc stake in Bank Zachodni WBK will go some way towards plugging that gap but Colm Doherty still has to find many more billions in the coming weeks to retain control of the bank.
The eventual cash shortfall will determine the extent to which the Government will have to increase its stake in AIB.
At the moment it looks like it will almost certainly have to take ownership of a large chunk of the bank and become its biggest shareholder.
That transaction will mark the spectacular demise of an Irish bank transformed over many decades into an international institution generating billions of profits every year.
AIB was a vast empire with Poland providing the brightest opportunities for its future. The bank had gained a foothold in that economy early and was well-placed to make plenty of money from its almost 40 million citizens.
The bank's experience in the US was never as successful and its poor management of its subsidiary, Allfirst in Baltimore, was exposed when rogue trader John Rusnak ran amok in 2002 losing almost $700m (€550m). AIB then sold Allfirst in a deal that gave it a large and valuable stake in M&T.
The booming Irish economy helped replenish its reserves quickly and find favour again with international investors.
Mr Sheehy was credited with engineering the crucial M&T deal for the bank and was duly rewarded with the AIB top job. Few would have believed he would then squander its legacy.