The Irish government has injected €3.7 billion (£3.14 billion) into Allied Irish Banks, effectively placing it under state control.
Ireland will use funds from its National Pension Reserve Fund (NPRF) to boost the bank’s core tier one capital to 8% ahead of the government’s year-end deadline.
The move will hand the NPRF a 93% stake in Allied Irish Banks when the bank completes the sale of its Polish interests to Santander.
The bank will move out of the main British and Irish stock markets on 26 January and apply for a listing on the enterprise market of the Irish exchange.
Irish finance minister Brian Lenihan (pictured) said the funding was a move of last resort.
‘The markets are not willing to invest in the Irish banks because they do not have confidence in them,’ he said.
‘We have to have a banking system in this country and it has to be brought into public ownership. I always made it clear that would be a last resort and we are now engaged in that last resort.’