Rumour and speculation about a possible takeover bid for AIB has given its shareholders much to smile about lately. And while the shares are beginning to settle back to less heady levels, most analysts suggest it is just a matter of time before the shares take another roller-coaster ride.

Consolidation is the buzzword in banking across the globe and the introduction of the euro has added impetus to that phenomenon among the main players in the euro zone.

The Republic's two big banks, AIB and Bank of Ireland, will inevitably be the subject of takeover rumours for the foreseeable future. Investors considering their options in the Irish market are being advised to buy the two main banks with analysts almost universally forecasting continued strong performance by AIB and Bank of Ireland in the medium term. But they would do well to hold off on this purchase until the shares become cheaper.

Goodbody Stockbrokers is advising its clients to buy AIB at around €15. Those buying Bank of Ireland stock should wait until it moves towards more reasonable levels, with Goodbody's again suggesting that might be at around €17.