In order to meet new rigid capital requirements designed as a plan to resolve the banking crisis the nation is suffering from, Ireland’s Government will help banks raise nearly 22 billion Euros and much of it will be raised from taxpayers.

The state already has a 16% stake in Bank of Ireland and a 25% stake in Allied Irish Banks, and it is still doubtful as to how large the stakes might grow.

Bank of Ireland should raise 2.7 billion Euros, while Allied Irish needs 7.4 billion Euros in new capital. Finance Minister Brian Lenihan indicated that bank might do so privately.

Bank of Ireland said, “The bank believes that it has a robust investment case to enable it to raise a substantial amount of the incremental capital required by the financial regulator from private sources, including existing shareholders”.

Due to bad debts, which resulted from the property market crash, the bank suffered a loss of €1.46 billion for the nine months ended December 31. The bank also shared that the trading conditions for the first quarter remain challenging.

Bank of Ireland, which is moving its financial year to year-end December from year-end March, posted a profit of €3.67 billion in the 12 months to March 31, 2009. Hence the total income was €2.44 billion as compared to €3.67 billion in the 12 months to March 31, 2009.