Permanent TSB is currently in the process of raising up to €400m in new equity from the markets and in a document sent to potential investors, the bank warns that its timetable for a return to profits could be put at risk by mounting political, regulatory or competitive pressure to reduce the current 4.5 percent variable mortgage rate it charges customers.

Chief Executive, Jeremy Masding told shareholders at the AGM recently the bank was not yet financially strong enough to reduce variable mortgage rates.

Newstalk's business editor Vincent Wall understands that there will be a huge demand to buy Permanent TSB’s new shares, and that the issue could be 4/5 times oversubscribed.

Sources who are familiar with the process say that the bank is getting guidance from the Government to ensure a strong spread of private, as well as institutional investors acquire the shares, and that pricing of the shares is set so that any short-term bounce in the share price after flotation is enough to encourage interest in AIB but not too high to attract criticism for having been underpriced at the taxpayer’s expense.