Bank of Ireland hopes to boost its capital by more than 1 billion euros ($1.42 billion) by offering investors who hold 2.6 billion euros of junior bonds the opportunity to swap them for equity, the Irish Independent said on Saturday.

The bank believes it can raise more than a quarter of 4.2 billion euros of capital it needs to find by June through the debt for equity swap, the Irish Independent said without citing any sources.

The newspaper added that the bank was also preparing for a private placement and a rights issue in a bid to become the only Irish lender to stay out of majority state ownership after the government pledged to recapitalise its financial system by 24 billion euros on Thursday. No one from Bank of Ireland was immediately available to comment.

 The bank, which said it would work to raise cash through a combination of capital-management initiatives, raised 3 billion euros through similar exercises last year when its share price was at around 1 euro.

Shares in the 36-per cent state owned lender closed 39 percent higher on Friday at 30 euro cents.

Ireland's Finance Minister said Bank of Ireland will avoid majority state ownership if they succeed in raising funds privately but the governor of the Irish central bank said it was likely all Irish banks would end up in full state ownership.-Reuters