ALLIED IRISH BANK has been forced to place the sale of its various UK operations on hold after it failed to attract bids at levels it was prepared to accept.

Reuters reports that new chairman David Hodgkinson says AIB’s British business bank, and its First Trust retail operations in Northern Ireland, will not be sold off just yet because of the absence of any substantial bids it was prepared to entertain.

Any bids lodged had not been on satisfactory terms so the lender will now try to strengthen its operations before it re-examines its options, he said.

“Allied Irish Banks notes recent press comments in relation to the sale of its UK business. In light of current market conditions, progress in relation to the disposal of that business has been challenging,” the bank said in a statement.

“The Company continues to keep the sale process under review and will update the market in due course.”

AIB is undertaking a massive sell-off programme of its overseas assets in an attempt to meet the Financial Regulator’s target of €7.4bn for capital-on-hand at the end of the year.

It has already sold off its Polish operations for €3.1bn to Santander and yesterday held an EGM to approve the sale of its 22.49% stake in American bank M&T, with a market capitalisation of about €1.5bn.

M&T had been in talks with Santander to agree a merger with its Sovereign bank but talks broke down in September.

Failure to reach the capital targets will mean the bank – which is set to be nationalised after the government announced further capitalisations to it – will likely need even more of a capital bailout from the taxpayer.