In a brief statement issued on Monday the bank said it was discussing with the Cyprus Central Bank and the finance ministry government support for the recapitalisation process.
The island's second biggest bank said it would make a further announcement once negotiations were finalised and the terms of the issue agreed.
The cash-strapped Cyprus government has said it is willing to financially support the banks but has not elaborated on how it will do so. It has not ruled out asking for an EU cash bailout or seeking a cheap interest loan as it has done with Russia for €2.5bn.
In final audited results in April, Popular revised its losses upward to €3.65bn in total due to a writedown of Greek government bonds increasing to €2.5bn.
The group, which also operates in Australia, Britain, Estonia, Greece, Malta, Romania, Serbia, the Ukraine and Russia, holds Greek government bonds with a nominal value €3.05bn.
The Cyprus economy is struggling to find its way out of recession, and there are fears the cash-strapped government may need to step in to bail out the island's large banking sector, which is heavily exposed to Greek debt.