Institutional investors are furious over the apparent cancellation or postponement of AIB's rights issue, originally slated to be held this month, according to stockbroker sources.

Brokers are getting "huge grief" over the lack of clarity and communication from official sources regarding the planned fundraising, which the bank announced at the end of September after being told by the Financial Regulator it would need a total of €10.4bn in new capital by the end of the year.

"No one is coming out of this well," said a senior stockbroker at a Dublin securities firm.

He added that the international credibility of the whole Irish financial sector was "gone" as a result of mixed messages surrounding the state of the banks.

AIB said two weeks ago it was increasing the size of its rights issue from €5.4bn to €6.6bn to compensate for the failure to sell its UK business. But the bank gave no indication of the timeframe in which the fundraising would occur.

Since then the Central Bank has indicated at least another €3bn would have to go into the bank to bring it to the new capital minimum of 12%.

It is expected the EU/IMF bailout fund will provide the money to recapitalise the banks, which would eliminate the need for the AIB to tap its shareholders or the National Pension Reserve Fund.