IRISH banks require an additional €8bn to be injected in order to meet tough new capital requirements, the country’s central bank indicated yesterday night.
Allied Irish Bank, 19 per cent owned by the state, will need almost €5.3bn (£4.5bn) before March in order to achieve a core Tier 1 capital ratio of 14 per cent.
Bank of Ireland, 36 per cent government owned, will require €2.2bn of capital to be injected to hit its target of 12 per cent.
The Irish central bank has raised its core Tier 1 capital ratio targets, a measure of financial strength, from eight per cent. If the banks’ capital ratios dip below 10.5 per cent the government says it will inject more cash.
Irish Prime Minister Brian Cowen yesterday announced €35bn of the €85bn bailout package will be used to recapitalise the stricken banks.
Around €10m of this will be injected immediately.
A Bank of Ireland spokesman said: “The bank intends to seek to generate the required capital through a combination of internal capital management initiatives, support from existing shareholders and other capital markets sources.”
The bank is 36 per cent owned by Irish taxpayers.
Around €3bn of the €7.9bn total UK contribution will go directly to prop up the Irish banking system.