The global US bank, Citigroup has settled a long-running legal action in which AIB accused it of helping rogue trader John Rusnak accumulate up to $690m in losses at its Maryland-based subsidiary bank, Allfirst, which came to light in 2002.

The settlement hasn’t been disclosed though AIB had sought more than $870m in overall compensation.

AIB accused Citigroup’s, subsidiary Citibank of furthering Rusnak’s fraud by enabling his fake transactions including disguised cash advances and false trades over a five-year period.

Citigroup argued that the evidence was not strong enough to suggest that the institution had contributed to Rusnak's losses.

This settlement averted a trial which was due to begin on January 25th.

Rusnak, who served five years in jail and now runs a laundry business in Baltimore, declined to testify on behalf of Citibank.

He hid trading losses for at least five years before they were discovered in February 2002.