Shares in Bank of Ireland closed over 6% higher this evening.

Stock in the bank fell by almost 5% this morning, after it unveiled details of a plan to raise €3.4 billion in capital – avoiding nationalisation.

Under the deal, State ownership of BOI will not exceed 36% – as the funds it requires will be sourced from private investors.

The Finance Minister Brian Lenihan is welcoming the move as good news for the economy and taxpayers – saying it shows confidence is being restored.

However Professor Brian Lucey, from the Trinity College School of Business, is giving the development a cautious welcome.

“There appears to be some international and possibly domestic interest in taking an equity stake in Bank of Ireland” he said.

“I think the Minister is premature to say that this is Bank of Ireland exiting from the crisis – I think there’s still a long way to go”.

“We’re still marred in the recession and that’s going to affect Bank of Ireland going into the future” he added.