EU backs AIB efforts to raise private capital

BRUSSELS, Dec 1 (Reuters) - European Union competition regulators will back efforts by Allied Irish Banks (AIB) ALBK.I to raise private capital in return for reducing state aid given to the bank, the European Commission said on Tuesday.

“In the Commission’s approach to restructuring aid for banks, it is possible for the period of coupon restrictions to be adjusted if this would favour private capital raising that would in turn reduce the amount of state aid,” it said.

“The Commission will support efforts of AIB to raise private capital, including measures aimed at providing adequate remuneration to the government’s preference shares without necessarily diluting existing shareholders,” it added.

Talks with AIB that had led the lender to suspend December coupon payments were “without prejudice to the respective positions of other Irish banks”, a Commission statement said.

The Commission is reviewing AIB’s restructuring plan submitted on Nov. 13. (Reporting by Foo Yun Chee, editing by Dale Hudson) ((foo.yunchee@thomsonreuters.com; tel +32 2 287 6844; Reuters Messaging: foo.yunchee.reuters.com@reuters.net))