New Ireland Assurance, Bank of Ireland's insurance business, is unlikely to be sold until 2012, according to sources familiar with the process.

The later timeframe for the disposal means any equity gained from the sale will not help Bank of Ireland meet the Central Bank's minimum capital target of 12% by the end of February if it wants to avoid state ownership.

A senior source in New Ireland said no buyers had made an approach and that it would be at least a year before anything happened.

The bank is in the preparatory stages of an EU-scheduled process to dispose of New Ireland and ICS, Bank of Ireland's wholly-owned building society.

New Ireland will be formally put up for sale in the second half of the year, most likely in autumn, a source said. He said the bank was not yet in a position to engage with interested parties.

He said the size and complexity of New Ireland's integration with the bank made a faster sale impossible.