UPDATE 1-Bank of Ireland details 3.4 bln euro capital raising

* Rights issue to raise up to 1.9 bln euros

* Govt stake not to exceed 36 pct

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DUBLIN, April 26 (Reuters) - Bank of Ireland BKIR.I launched a plan to raise 3.4 billion euros ($4.6 billion), half of it in a rights issue, which it said would avert a big rise in the government's shareholding.

Ireland’s biggest bank by market value plans to raise up to 1.9 billion euros in the rights issue, which could be reduced through a debt-for-equity swap, it said.

It is hoping to raise the rest of the capital from an institutional share placing and by converting part of the state’s preference shares into ordinary stock.

“Bank of Ireland is the first of our financial institutions to emerge from the banking crisis,” Finance Minister Brian Lenihan said in a statement after the bank’s announcement.

The financial regulator told Bank of Ireland last month to raise 2.7 billion euros to meet new minimum capital requirements and compensate for losses on discounted loans sold to the National Asset Management Agency (NAMA), Ireland’s “bad bank”.

Last week the bank listed the four ways it planned to raise capital but it did not at that time provide any figures. [ID:nLDE63L06M]

As the rescue of fellow euro zone member Greece kicks off, Bank of Ireland’s capital raising will test investment appetite for Irish assets as a whole. Ireland last year came close to a similar market attack as Greece due to its own fiscal and banking crises. [ID:nLDE63O07E] (Reporting by Andras Gergely; Editing by David Holmes) ($1=.7439 Euro)