Goodbody bullish on Bank of Ireland

Goodbody Stockbrokers is recommending Bank of Ireland as a buy for investors, suggesting the shares could rise to €11.70 (£9.21) within 12 months. In a new report, the brokers highlight Bank of Ireland's relatively high profitability and the low risk associated with sustaining earnings growth from its business. The bank is well-positioned in terms of its resilience to a material deterioration in credit quality. It has also been diversifying away from capitalintensive credit activities into high-quality fee-generating activities, with bank assurance and fund management particularly successful. Goodbody ranks Bank of Ireland as its "top pick" of the Irish financials. Some 58 per cent of the bank's income derives from balance sheet sources, with the most likely threat to future earnings being tighter profit margins or poorer credit quality. Goodbody suggests that neither case is likely to prompt a significant fall in Bank of Ireland's profitability.