* UBS sells Pactual for $2.5 bln for capital boost

* Allied Irish Banks to raise $2 bln, maybe by disposals

* RBS, ING, Lloyds, others could also sell assets

* Bank of America profit higher; troubled loans rise

* Bank of America shares down 24 pct (Updates with closing share prices)

By Jonathan Stempel and Katie Reid

NEW YORK/ZURICH, April 20 (Reuters) - Bank of America (BAC.N: Quote, Profile, Research) showed the sector's troubles were far from over by reporting a big rise in bad loans, while two European banks stepped up efforts to reduce their reliance on state funding.

Bank of America shares plunged 24 percent after the No. 1 U.S. bank by assets reported on Monday a 41 percent leap in nonperforming assets. BofA was also helped by $4.1 billion in one-time gains, adding to a sense that better-than-expected results last week from Goldman Sachs (GS.N: Quote, Profile, Research), JPMorgan Chase (JPM.N: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research) could be tough to replicate. [ID:nN20380236]

Bank of America has received $45 billion of taxpayer money, and some analysts believe it needs more. Bank of America Chief Executive Kenneth Lewis said on a conference call that "we absolutely don't think we need additional capital," but admitted conditions were tough.