EBS chief Fergus Murphy

Upcoming stress tests on bank capital and liquidity will delay completion of the sale of EBS, according to sources involved in the negotiations.

Final revised bids to buy the nationalised former mutual are due on 17 January, having been pushed back from 21 December. Uncertainty over the outcome of Central Bank assessments of the covered banks' capital and funding in March looks set to postpone a resolution until April at the earliest, sources said.

Irish Life & Permanent (IL&P) and a private equity consortium led by Cardinal Capital are the remaining two bidders in the hunt. Sources said that even if a preferred bidder is selected soon, the final decision will be provisional pending the Prudential Capital and Liquidity Assessment Reviews (PCAR and PLAR).

Michael Torpey, who oversees the NTMA's banking unit, said a solution involving all three parties had not been ruled out. Any decision must be referred to the EU's competition commissioner for approval, a process Torpey said was "quite frustrating". He said the uncertainty meant there would be caveats on a price for EBS.

Both IL&P and EBS are awaiting the Central Bank's verdict on their financial stability under tough new criteria imposed by the European Commission and IMF as a condition of the bailout. The institutions could be forced to add more capital in the spring if the Central Bank believes either would fall below the 10.5% minimum in a stress scenario.

IL&P especially may be vulnerable to the liquidity assessment, as it has the highest loan-to-deposit ratio in the Irish market. The bancassurer would have until the end of April to submit a funding plan.