Ireland told its banks in March that they must find at least 22 billion by the end of 2010 to plug the holes left from transferring risky property loans to a "bad bank" scheme and to meet new regulatory requirements.

Allied Irish needs to raise 7.4 billion euros and plans to sell its UK business, its majority stake in Poland's Bank Zachodni WBK and a minority stake in M&T Bank in the United States.

"We are confident AIB is on track to meet its disposal target, the issue is around the valuation of those disposals," Jonathan McMahon, the assistant director general for financial institutions at Ireland's central bank told reporters on Monday.

"There is some uncertainty around that at the moment and clearly the amount of government support will in part depend on their ability to realize those assets to the value they think they can."

Ireland, which last year nationalized troubled Anglo Irish Bank and has a 36 percent stake in Allied's main rival Bank of Ireland, may have to take majority ownership of Allied Irish even if its sells some of it profitable overseas units.

The central bank has already completed stress tests on the two main banks and McMahon said that the same measures should be completed for Anglo, state owned Irish Nationwide building society and Irish Life & Permanent by September.

He added that some foreign-owned institutions may have to ask their parent groups for some marginal additional capital when their stress tests are finalized at the end of year.

"Clearly some of those institutions have loan loss profiles very similar to domestic banks so it would be surprising if there weren't additional capital needs," said McMahon, who was hired this year as part of a wide regulatory overhaul.

Lloyds and BNP Paribas recently closed their Irish units but Royal Bank of Scotland, Dutch lender Rabobank, Belgian group KBC and Nordic giant Danske Bank still have a presence.

McMahon also said that he was confident Irish banks would be able to withstand any continued market woes, and exposures by any institution to the euro zone's troubled debt spots gave the regulator no cause for concern.

"Events in European markets have made it difficult for banks in the euro zone and we're satisfied currently that the measures banks are taking, the contingency plans they have will be adequate in the event that there were serious market problems."