Davy says no bank mergers on the cards
Bank of Ireland will grow its loan book this year, after a near decade of decline, Davy Stockbrokers said in a wide-ranging report on the banks.
Bank of Ireland and AIB may pay full year dividends for 2016, Davy said.
The report said "significant in-market consolidation" is unlikely in the near term in the banking sector, despite some focus on potential deals including KBC or Ulster Bank.
In a broadly positive update, Davy said Bank of Ireland and AIB may pay full year dividends for 2016, and that capital requirements are now "undemanding" for Irish lenders.
However, it cut Permanent TSB's expected 2017 operating profit before provisions by 3pc.
Bank shares were active yesterday but with no clear pattern. Bank of Ireland closed down 1.57pc at 25 cent a share, AIOB was up 5pc to €5.20 a share and Permanent TSB fell 0.9pc to €2.675.
Elsewhere, European shares slipped on Thursday, weighed down by disappointing earning updates from Danish drugmaker Novo Nordisk and German lender Deutsche Bank, although Reckitt Benckiser was boosted by news of talks to buy US rival Johnson Nutrition.
The pan-European STOXX 600 index fell 0.3pc, while Britain's FTSE outperformed with a gain of 0.5pc after the Bank of England appeared to be in no rush to tighten monetary policy in its latest inflation report.
After an 11-week-long rally on hopes of a big stimulus boost under the new US administration, investors have turned more cautious over Donald Trump, expressing concerns over the impact of his controversial protectionist policies.
That has caused European shares to come off January's 13-month highs.