“Permanent TSB is the most vulnerable of the Irish banks,” according to Emmet Gaffney, an analyst at Investec in Dublin.

But he said there is little risk of taxpayers being hit for fresh cash to cover any shortfall, because the bank already has a €400m cushion from taxpayers to help cope with the test results.

AIB and Bank of Ireland are regarded as better capitalised – meaning they would be better able to cope with a future shock because of cash already invested into the banks, Mr Gaffney added.

Ulster Bank, which is also undergoing the probe, is UK- owned and part of RBS, a much bigger bank, which could shore up its Irish unit, if needed.

The stress tests will examine whether lenders across the Euro area are in a position to deal with a shock, by assessing whether a bank would still have 5.5pc of capital after a new crisis.

Permanent TSB’s core tier 1 capital was 13.1pc at the start of last year, but slipped to 12.7pc at the end of June.

Unlike the other banks it remains loss making, and a large number of low interest rate tracker mortgages makes it hard for the bank to rebuild margins.

While its seen as the weakest of the Irish banks, its unlikely the bank will require a large injection of capital even if it struggles with the stress tests this weekend, according to Emmet Gaffney.

The European Central Bank (ECB) will publish the results of the tests of 130 banks next Sunday.

Cantor Fitzgerald analyst Fiona Hayes says one factor that could impact on the results of banks here is the timing of parts of the review which will not capture what she called the significant improvements in the Irish economy and banking sector over the last 10 months.

She expects AIB and Bank of Ireland to pass comfortably, and that Permanent TSB’s existing cushion should provide a solution even if the bank struggles to pass the tests.

Permanent TSB has lined up Deutsche Bank to help raise capital on the markets, including in the event it is needed after the tests.

The stress tests are being run to give the ECB a thorough appraisal of Europe’s banks before it takes over as regulator on November 4.

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