British bank HBOS is likely to turn its gaze on Ireland after opting not to pursue UK rival Abbey National, analysts said.
"Ireland would be an obvious place for them to expand given that the banking culture and financial markets are so similar," said Mr David Odlum of NCB Stockbrokers in Dublin.
The lack of strategic options for HBOS elsewhere in Europe also made Irish financial institutions likely targets, he added.
"A deal in Ireland makes a lot of sense, both strategically and financially, and does not contain the same risks as a grand European/US adventure," Mr Scot Rankin, analyst at Davy stockbrokers in Dublin, said in a note to clients today.
Among the obvious targets are National Australia Bank's Irish operations, analysts said, pointing to recent media speculation that they could soon be up for sale.
National Australia Bank said late last month that it had hired London-based investment bank Lazard to advise on options for its UK and Irish businesses, which include Belfast-based Northern Bank and National Irish Bank (NIB) in the Republic.
With 95 branches in the north, Northern could fetch €1.3 billion to €1.5 billion ($1.58-1.82 billion), analysts say, while NIB's network of 59 branches in the Republic of Ireland looks to be worth between €300 million and €400 million.
Other potential bidders for the Australian company's Irish assets include Bank of Ireland, Royal Bank of Scotland's
Ulster Bank unit, and financial services group Irish Life and Permanent, analysts said.