DAVY VIEW

Money markets are pricing in four additional European Central Bank (ECB) rates rises over the next 12 months, with high levels of volatility since the Iranian/Middle Eastern conflict started. For now, we incorporate two further rate increases into our forecasts. While less exposed to higher rates than in the past, Irish banks will continue to benefit from this trend and we increase our forecasts accordingly. Upside to these forecasts remains from further rate increases and from asset and liability dynamics. We upgrade our price targets to €12.84 for AIB Group (AIBG) and €22.87 for Bank of Ireland (BIRG) and retain our ‘Outperform’ ratings.