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Allied Irish Banks moving loan portfolio to pension fund

AIB

Allied Irish Banks moving loan portfolio to pension fund

Allied Irish Banks agreed to transfer a portfolio of loan assets nominally valued at an estimated €1.1 billion ($1.35 billion) to plug a pension shortfall in the €2.6 billion AIB Group Pension Plan, Dublin, according to a spokeswoman for the bank.

The move will also help the bank to meet deleveraging targets of €20.5 billion set last year following a government bailout of the nation's banking system. Over the next several months, the loans will be transferred to the pension fund at “a substantial discount to par value,” according to a statement released by the bank. AIB did not disclose the discount level.

As of Dec. 31, AIB's Irish defined benefit fund had a deficit of about €760 million, according to the bank's annual report.