Mallabraca, the €5bn investment group funded by JC Flowers, Carlyle Group, Bank of America and the Dubai sovereign wealth fund, is understood to be preparing to make a formal approach to buy a stake in mutual lender EBS.

Nick Corcoran and Nigel McDermott, the Mallabraca financiers who are talking to several banks here, were understood to be in the United States last week briefing its US backers on plans to invest in European banks.

The financiers met EBS for informal discussions in recent weeks and are understood to be entertaining a formal pitch to inject €300m to acquire a minority equity stake in the mutually-owned lender that is controlled by its 440,000 savers and mortgage members.

€300m is the amount EBS needs as a cash injection to free it from its bad debts following a lending splurge that swelled its commercial lending to €2.3bn in 2007. EBS has written off €512m it loaned to property developers in recent years.

EBS will start a bond-selling programme under the state guarantee scheme next month as part of a target to raise an estimated €1bn this year. Meanwhile it is understood that the EBS annual meeting will be told that chief executive Fergus Murphy took a 10% pay cut on a basic pay of€490,000.