Merrill Lynch is recommending Abbey National to investors. The British financial institution, which has a 9 per cent stake in Irish Permanent, provides defensive attractions and growth opportunities, according to the brokers.

Abbey National is currently trading at a discount of up to 20 per cent to British bank-sector shares, offering good value for investors. Merrill Lynch believes Abbey remains the best diversified mortgage bank and has one of the best earnings records of any British bank.