Advice to buy shares in banks

THE stockbroking arms of the two largest Irish banks yesterday, independently of each other, simultaneously recommended the shares in the rival financial institution as a “buy.”

Shares in Bank of Ireland and AIB Bank are both trading at significant discounts to European banking stocks and well below the stellar gains of their smaller rival Anglo Irish Bank.

Yesterday, Bank of Ireland-owned Davy’s Stockbrokers said AIB was a solid investment. Banking analyst Scott Rankin concluded in a note on AIB to clients, by stating: “the stock looks due a bounce and must represent a good solid bet over any medium-term horizon.”

Mr Rankin noted that AIB finished down around 2% last week.

“Once again the bank is down at the bottom of its €12-14 range that has contained most of the price action over the past two years.”

AIB-owned Goodbody’s Len Riddell, in a note to clients on Bank of Ireland, rated the shares a buy.

“We are encouraged by the quantum of buybacks from Bank of Ireland last week. This takes the total bought back since interims to 3.2m shares at an average price of €10.43,” he said.

NCB Stockbrokers also reiterated their “buy” recommendation on B of I.