Shares in AIB traded as low as €12.22 yesterday before finding some support and closing unchanged at €12.30.

The bank, which shed €1 in a post-results sell-off on Tuesday, has since attracted a round of analyst downgrades.

Some saw Tuesday's 7.5 per cent share price decline as overdone however, pointing out that the downside risk on the stock is limited at these levels.

Mr Len Riddell of Goodbody, which is owned by AIB, highlighted the stock's yield of 4.8 per cent as one reason to buy as he retained his "add" rating.

Mr Séamus Murphy of Merrion Stockbrokers has cut his earnings per share forecasts for 2004 and 2005 by 2 per cent to reflect the margin pressures that have been hitting mortgage operations.

Mr Scott Rankin at Davy has cut his forecasts for the next two years by 2 and 3.5 per cent respectively, with about 1 per cent of the 2005 move attributed to assumptions on the dollar.

Mr Rankin nonetheless sees shares in AIB as being "undervalued" on the price/earnings measure.