Minister for Finance Paschal Donohoe has said it is too early to say if the negotiations between Permanent TSB and NatWest turn out to be successful on the possible purchase of a loan book.
It follows the announcement of the phased withdrawal of Ulster Bank from the Republic of Ireland last Friday.
While Mr Donohoe hopes that will be the case, he said there are many stages yet to complete for Permanent TSB to become a so called third force of Irish banking.
He said it is a huge project and negotiations are in the early stages.
“As to whether the Irish state and taxpayer will be required to fund that in anyway the first questions will be whether the negotiations turn out to be successful,” Mr Donohoe said.
He said if and when Permanent TSB conclude discussions and come back with a recommendation, he will be able to form his view and go back to Government.
“The journey to a third force in Irish banking is a long journey ahead. It is possible that we could see emerging from what happened on Friday a stronger Irish bank or a number of Irish banks that could be stronger.”