Ireland’s biggest banking group has plunged into the red after writing off €2.37bn (£2.01bn) in loans amid rapidly escalating impairment levels.

More than 8%, or €10.8bn, of Allied Irish Banks’ €134bn lending portfolio was impaired at the end of June.

A further €22.6bn of lending was classified as 'vulnerable' or on a watch list, taking to 25% the proportion of AIB’s lending portfolio that is at risk or impaired.

The rate of impairment is increasing dramatically as the beleaguered Irish property market continues to weigh on credit quality.

Daily Telegraph