Stockbrokers continue to highlight the relative good value for investors in the financial sector. ABN Amro and Merrill Lynch both suggest Irish banks are undervalued relative to their British and euro-zone peers. Bank of Ireland and Anglo Irish Bank have recently issued a strong set of results, while AIB has signalled a good performance in its trading statement.

ABN Amro has upgraded earnings forecasts for Bank of Ireland and Anglo Irish Bank by 4 per cent and 10 per cent respectively. Within the European sector, it continues to favour banks with strong defensive characteristics. "We prefer banks with strong retail franchises, good fundamentals and little in the way of investment banking or emerging market exposures."

Against this background, it has recently added Bank of Ireland to its Eurotop 300 core portfolio.

Merrill Lynch is advising investors that putting money into Irish bank shares looks very attractive. It has set price targets of €11.20 (£14.22) for Bank of Ireland and €14.50 for AIB.