Merrion Capital is recommending Bank of Ireland as a buy for investors at P10.20, suggesting the stock has the potential to appreciate by 21 per cent to P12.40.

In a new report, the brokers state that Bank of Ireland should no longer be compared with the performance of UK mortgage banks because it has a strong fee-based income focus and its growth rate is superior. It believes that bank's fee income generation capacity is not recognised in the current share price.

Growth in life assurance and asset management businesses, allied to further diversification of its UK-based earnings, should result in income from core mortgages and interest-sensitive savings products falling to 17 per cent of total income.