Institutional investors are poised to participate in rights issues for the Irish banks this autumn if finance minister Brian Lenihan this week provides certainty on asset discounts and risk-sharing when he makes his Nama presentation.

According to Frank O'Dwyer, chief executive of the Irish Association of Investment Managers (IAIM), which represents members with €210bn in assets under management, the institutions are prepared to provide private capital to the Irish banking system if Nama can eliminate the balance-sheet uncertainty which has dogged the sector.

"Since last year the prospect of Irish banks raising equity in the markets has been eliminated by uncertainty about their balance sheets," said O'Dwyer. "When the final details [on Nama] are announced and there is clarity on the 'haircut' and on risk sharing mechanisms it is possible to envisage an Irish bank raising some equity from the markets."

Institutional appetite will also depend on who much is required and whether the government is prepared to underwrite new capital issues, although the government may not need to fully underwrite an issue to get large investors involved, he said.

The big investors have been sitting on the sidelines since shares bottomed in February amid fears of further nationalisations following the government takeover of Anglo Irish Bank. Since then, small retail investors have driven prices up, buying up to 50% of the shares. Institutional sources have indicated to the Sunday Tribune that rights issues could bring them back to the market by providing greater available volumes for stakebuilding.