Banks seek extra funding.

ALLIED Irish Banks warned it needs another pounds 1.3bn to shore up its finances - on top of existing plans for a multi-billion Government bail-out.

The group said it would be looking at selling some of its assets to raise cash to boost its balance sheet further after talks with the Irish Government determined the current pounds 3.1bn state rescue would not be enough.

The Irish Government pledged pounds 3.1bn to Allied Irish in February as part of its bank recapitalisation scheme.

But the bank said it was not enough to end market and public uncertainty over its capital strength..

It said that following further stress tests, it jointly agreed with the finance minister that a total of pounds 4.4bn was needed and that the extra cash would be raised by the end of the year.

Dublin-based Allied Irish, which is Ireland's biggest lender by market value, also confirmed it is planning to sell off toxic property loans to the State's National Asset Management Agency.

"The bank acknowledges that the minister has said that if any further capital injections are required from the State these would be in the form of equity capital," added Allied Irish.

Shareholders are set to have their say on the bank's proposed initial boost from the Irish Government on May 13..