AIB will need another 13.3 billion to cover losses arising from unexpected shocks in the economy, according to today's "stress test" results from the Central Bank.
The bank will also be forced to merge with the Educational Building Society under Government plans to restructure the Irish banking sector.
The additional 13.3 billion for AIB will bring the bank's bailout total to 20.5 billion and sees the bank accounting for more than half of the 24 billion total capital bill arising across the banking sector from the latest tests.
AIB's higher share of the latest total reflects the Central Bank's belief that the bank will account for the biggest proportion of loan losses in Irish finance over coming years.
According to the Central Bank's assessment, AIB's losses on residential mortgages could reach 3 billion under a worst-case stress scenario. On the same worst-case basis, AIB's losses on development loans could rise to 4.5 billion between 2011 and 2013.
The stress tests involve applying higher levels of capital to protect against losses, considering greater stress in the general banking environment, applying conservative loan loss and recovery assumptions and adding in further buffers above the numbers resulting from the Central Bank review.
Minister for Finance, Michael Noonan said the new-look AIB, which will incorporate EBS, will be a "largely domestically-focused bank".
In a statement, AIB said it appreciated the State's continued support for its business. It also said it was working on "initiatives" to meet customers' needs and address mortgage problems.