GLAS Securities, the Dublin-based fixed-income firm, said it remains unclear whether Bank of Ireland has sufficient capital to withstand future loan losses.
"There is enough evidence in recent domestic trends to at least raise an element of concern," Glas said in a note to clients.
Bank of Ireland was capitalised last year based on the Central Bank's three-year stress tests. Glas warned yesterday that the "key risk" was that the bank's future operating profits weren't enough to absorb mortgage losses beyond this period. Bank of Ireland has raised €12.7bn of capital since 2009, Glas said.
In a separate development, the Bank of England warned British banks to raise fresh capital "as early as feasible" because the stability of the global financial system remains fragile.
The Bank of England's new risk watchdog said banks had gone as far as they could to raise capital by keeping down pay, dividends and share buy-backs.
"But the committee remained concerned that capital was not yet at levels that would ensure resilience in the face of prospective risks," the bank's Financial Policy Committee said yesterday. "It, therefore, advised banks t o raise external capital as early as feasible."