UPDATE 2-Bank of Ireland appoints ex-CEO as chairman

* Pat Molloy named chairman

* Finance minister appointed Molloy to the board (Adds confirmation)

DUBLIN, June 10 (Reuters) - Bank of Ireland (BKIR.I) has appointed Pat Molloy, a former chief executive of the lender, to take over as chairman when Richard Burrows resigns next month, the bank said on Wednesday.

Molloy, who was also a former chairman of building materials group CRH (CRH.I), was appointed to the board of Bank of Ireland by the government, which has a 25 percent indirect stake in the country's biggest lender by assets.

The bank's statement confirmed a report earlier on Wednesday in which a source told Reuters Molloy would be appointed as governor (chairman) designate.

"Arising from the selection of Mr. Molloy by Bank of Ireland as Governor, the minister will now make an alternative appointment (to the board)," the bank said in a statement.

Burrows is leaving after a collapse in Bank of Ireland's shares and profit due to exposure to an imploding local property market.

Molloy, Bank of Ireland chief executive during the 1990s, is respected for helping the lender extricate itself from a failed investment in U.S. bank First New Hampshire.

"Pat is very highly thought of. His appointment will be welcomed. He had a very positive tenure with the bank in the 1990s but it's very different times now. I'm not sure from a share price perspective it will have much of an impact," said Emer Lang, analyst with Davy Stockbrokers.

Billionaire financier Dermot Desmond, a shareholder in Bank of Ireland, suggested the appointment of Molloy as interim chief executive in a letter to Burrows in March opposing the appointment of insider Richie Boucher.

Bank of Ireland shares closed up 2 percent at 2 euros, with the broader Irish stock market .ISEQ nearly 1.2 percent stronger.

(Reporting by Carmel Crimmins and Andras Gergely; Editing by Dan Lalor, Bernard Orr)