Allied Irish Banks PLC Chairman Dan O'Connor said Wednesday that selling its U.K. and Polish businesses and its stake in Buffalo's M&T Bank Corp. will meet a "substantial" part of its capital needs but added that a regulator's capital targets are "demanding."

It has already received $4.6 billion in a government recapitalization in return for, in effect, a 25% stake, that will help it offset bad debts. It also must raise about $9.6 billion before yearend or face a further capital injection from the state.

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