Permanent TSB will this week kick off a plan to raise money from private investors.
It comes after the bank was told to increase its capital levels by more than €850 million after failing European Central Bank stress tests.
Permanent TSB will meet with its Irish and international financial advisers to test whether outside shareholders will invest in the bank.
It has less than two weeks to present a plan to find the money to the Central Bank.
After that it has six months to plug the hole and the bank says it is confident of raising the capital by early next year.
The bank said in a statement that it is working with external advisers to find private investors rather than a taxpayer bailout. The bank, which is 99% state-owned, says it has already addressed some of the funding concerns.
“We look forward to bringing international investors on board now to raise the remaining amount which will leave the bank fully in line with the ECB requirements,” Permanent TSB’s chief executive Jeremy Masding said in a statement.
He added that the failure will not have any impact on day-to-day operations of the bank and no impact on customers.
The stress tests were carried out across around 130 European banks to finally draw a line under the huge losses they have suffered in the financial crisis. A total of 25 banks across the continent failed the stress tests, with the most failures occurring in Italy.
Overview participating banks in #ecbtest with a shortfall pic.twitter.com/y94ywpTdo3
— ECB (@ecb) October 26, 2014
The Central Bank in Ireland says the results show progress that has been made in recent years to stabilise and rebuild the banking system in Ireland.
“All but one of the Irish institutions meet the adverse and severe criteria applied by the stress test, with a capital requirement only identified in the adverse scenario for PTSB, reflecting on-going legacy issues which the bank is continuing to work through,” the bank’s deputy governor Cyril Roux said.
AIB said that following the stress test it is working towards returning some of the €20bn of taxpayer funds it received.
Originally published at 11:03am
