Merrion Capital is taking a positive view of the prospects for Irish Life & Permanent suggesting investors should buy the shares at €9.30 (£7.32). In its latest report on the company, Merrion says Irish Life & Permanent scores very well on the measures used to rate life and pension companies internationally, although it continues to trade at a discount of more than 20 per cent to the sector average in Europe.

Among the issues which have held back the shares' progress is uncertainty over its strategic direction, concerns about falling profit margins in the Irish mortgage market and inefficient balance-sheet structure. Merrion suggests these negatives are now more than discounted and believes the company's management will take decisive action on the balance-sheet issue and possibly introduce a share buy-back.