Notwithstanding the bank's claims about their profitability Goodbody Stockbrokers has issued a new report recommending the banks as a good investment in the current uncertain climate.
The report, by analyst Mr Len Riddell, recommends AIB as a buy and Bank of Ireland as an add for investors with Anglo Irish Bank remaining its top pick.
The brokers favour the prospects of its parent, AIB, over Bank of Ireland. It states that there are no dividend concerns for investors and their robust capital strength makes them a safe haven amid the current geopolitical risk and market sentiment.
Goodbody believes AIB is strategically better placed than Bank of Ireland with greater flexibility in the longer-term. Meanwhile AIB's $450 million (€415 million)share buyback due in April should provide meaningful short-term support for the stock, according to Goodbody.
The brokers have upgraded their forecasts for Anglo Irish Bank to reflect the likely stronger than expected volume growth this year. It suggests the bank will record net new lending of €3 billion and is maintaining a price target for the shares of €8.35.
It has also raised its recommendation for First Active to add having recently downgraded it to reduce on foot of share price weakness.
In terms of fundamentals it believes the First Active is one of the best positioned financial groups in Europe that can continue to grow its share of the mortgage market. Cost momentum remains a key driver.
