An expected quantitative easing programme from the European Central Bank (ECB) is set to boost Bank of Ireland's prospects, Bank of America Merrill Lynch said in a note this morning, noting that a balance sheet expansion from the ECB will be a key driver for banks into 2015. With bond yields continuing to slide, many now consider QE inevitable.

Bank of Ireland is a "key buy", with an unusual growth story, BoAML said, noting that the bank is enjoying "Singapore-like growth on what is essentially Italian monetary policy".

BofAML also identified Belgian bank KBC Bank, which has significant operations in Ireland, as a “post-restructuring yield play”, noting that it is expected to yield 6 per cent in 2016, and can deliver “sustainable ROTE above 15 per cent”.

Other banks cited as having stable balance sheets and low valuations include Intesa, BNP Paribas and Societe Generale.