Anglo Irish Bank has been the best-performing large-cap financial institution in the world during the last five years, according to a report from consultancy firm Mercer Oliver Wyman.

The bank's success has been due to its focus on business lending and treasury and wealth management in the Irish, UK and US markets, the report said.

In addition to increasing its most profitable segment - business lending - by 38 per cent over the last decade, the bank has also "exploited synergies" within its narrow business mix to enable organic growth.

Anglo Irish Bank is the only Irish company to feature in the report's list of top 10 large-cap performers, and it also heads the report's 2006 European performance league table.

Last year was a record year for the global financial services industry, with returns of 26 per cent recorded. This compares to an average return of 22 per cent generated by non-financial corporates last year. The total value of all quoted financial services companies grew to a record $10.7 trillion (€8.24 trillion).

The report also found that chief executives are optimistic about the year ahead and expect continued market growth, but are concerned about increasing costs.

Chief executives expect lower merger and acquisition activity this year, except in the area of cross-border transactions.

The report also found private equity firms are having a growing impact on financial services.