Among the Irish financials, brokers NCB are tipping Irish Life & Permanent, Bank of Ireland, First Active and Anglo Irish. Low ECB rates, good provisioning levels and a bias towards retail banking and home mortgage assets are expected to protect asset quality in 2002 at the first three banks. Anglo is exposed to commercial lending in the Republic and Britain but its loans are secured.

Because low double-digit loan growth next year will mean slower revenue growth, cost control will be needed to maintain profit momentum.

Ahead of end-November results, Merrill Lynch has upgraded Anglo to "buy" and put a 12-month price target of €4.00 (current price €3.67) on the shares. The broker says Anglo's 25 per cent discount to the average rating of its Irish peers is undeserved and that the price fall since September 11th is overdone.