Stress tests on Ireland's four main lenders will reveal a capital hole of around 20 billion euros ($28.2 billion), The Sunday Business Post reported, without citing any sources.
Ireland's central bank will on Thursday publish the results of new stress tests on Bank of Ireland, Allied Irish Banks, Irish Life & Permanent and EBS Building Society.
The central bank has declined to comment in advance of the results, agreed as part of an EU-IMF bailout designed to resolve Ireland's banking crisis.
The Sunday Business Post said the tests, which measure the strength of the banks' capital cushion under adverse macroeconomic scenarios, will show potential loan losses of somewhere between 18 billion euros and 23 billion.
A Reuters survey of analysts on Friday showed they expected around 25 billion euros out of the 35 billion set aside for the banks under the EU-IMF deal would be required as a result of the stress tests.
A decision by the European Central Bank (ECB) to provide medium-term funding for Ireland's banks, revealed to Reuters on Saturday by a euro zone central banking source, has helped to cut the potential capital hole.
Without the ECB move, Ireland's banks would have had to sell some of their loan books quickly into a depressed market, triggering further capital losses. Analysts at Davy Stockbrokers estimated such a move could require an additional 20 billion euros in capital.
Ireland's lenders do need to shrink their assets to cut their dependence on central bank funding, which they rely on to pay for day-to-day operations following a loss of deposits and an inability to tap other banks for loans.
With a medium-term facility in place, Ireland's banks, whose loans from the ECB and the Irish central bank are estimated at around 150 billion euros, have more time to shrink their assets to reduce their dependence on such funding.
(Reporting by Carmel Crimmins; Editing by David Holmes)