DUBLIN: Ireland's Central Bank will Thursday publish the outcome of national stress tests on its banking sector, as part of the eurozone member's enormous 85-billion-euro international bailout deal.
Ireland, rescued late last year with the huge loan from the European Union and the International Monetary Fund, remains plagued by worries over its domestic banking sector, amid simmering tensions over the eurozone debt crisis.
The Central Bank has carried out capital and liquidity assessments on four lenders -- Allied Irish Bank, Bank of Ireland, the Educational Building Society, and Irish Life & Permanent.
The results will be published at about 1600 GMT on Thursday, amid mounting fears that Ireland's fellow eurozone member Portugal could be next in line for an EU/IMF bailout.
"The upcoming bank stress tests are crucial for Irish banks. We expect these tests to highlight the need for further financial support," said analyst Nick Stamenkovic at RIA Capital Markets.
The government was bailed out with a humiliating 85-billion-euro ($115-billion) debt rescue package from the EU and IMF in late November.
Under the deal, 10 billion euros was earmarked as immediate support for banks, with another provided 25 billion euros as a contingency fund for the troubled sector.
However, analysts predict that the total figure could be somewhere between 18-25 billion euros.
"The key issue is how much of this will be required, with speculation ranging from some of it to all of it," said analyst Emer Lang at Dublin-based Davy stockbrokers.
Ireland, slammed by the global financial crisis, became the second eurozone member after indebted Greece to seek an international bailout last year.
The stress tests, which are a requirement of the rescue deal, will assess capital and liquidity levels to determine whether the four banks can withstand unexpected macro-economic shocks over the next three years.
The assessments are separate to Europe-wide stress tests being conducted by the European Banking Authority, and whose results are due in June.
"The results of the Irish stress and liquidity tests are difficult to estimate due to the significant uncertainties about the way the tests are being calculated," added Dolmen analysts in a research note.
"Based on our analysis, we are expecting a capital injection figure between 20-25 billion euros, thus drawing down the majority of the contingency fund."
Ireland's economy formerly known as the Celtic Tiger for its roaring growth spanning a decade from the late 1990s has contracted for the last three years.
It was rocked by costly bank bailouts and a domestic property market meltdown, while taxation revenues were ravaged by a deep recession.
At the height of the financial crisis, Ireland nationalised four lenders -- Anglo Irish Bank, the Educational Building Society, Irish Nationwide Building Society and Allied Irish Banks -- and took a large stake in Bank of Ireland.
Meanwhile on Tuesday, the Irish Times reported that the government might be forced to take a major stake in Irish Life and Permanent, as a result of the stress tests.
Earlier this year, Brian Cowen's centrist Fianna Fail administration was ousted from power as voters vented their anger over the bailout.
Enda Kenny became Ireland's prime minister after a dramatic general election, and now heads a coalition government of his centre-right Fine Gael party and centre left Labour.
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