State-owned Permanent TSB will be ordered by European regulators to raise up to €1bn to plug a financial gap after failing a European-wide "stress test", it is understood.
The need for capital will have no impact on customers and is not a danger to the bank itself.
For the first time since the crisis, taxpayers are not expected to be hit for a fresh bailout of Permanent TSB or any other bank forced to raise funds, as both AIB and Bank of Ireland are expected to pass the tests being carried out by the European Central Bank.
A previous €400m loan from taxpayers in the form of so called contingent capital will plug much of the funding gap.
The State is expected to allow the loan be converted into shares in the bank.
The lender will also be able to write-up the value of many of its assets based on the recovery in property and the wider economy since December 2013, when its balance sheet was actually probed.
After that, Deutsche Bank has been hired to source outside investment for the bank - a figure that is anticipated to be around €300m and reckoned to be easily achievable.
Chief Executive Jeremy Masding will have two weeks to come up with a plan for the bank, after it is formally handed the stress test results on Sunday. Mr Masding is expected to outline how the bank will raise the extra capital needed on Sunday, after the results are officially made public.
Finance Minister Michael Noonan has said that he is "pretty confident about the Irish banking industry".
"Well we won't know how any bank stands until the announcements are actually made, but there is nothing in the pre-discussion that has surprised me or causes me a lot of concern," he said.