Japanese bank Nomura yesterday gave Bank of Ireland shares a buy rating and said they contained a high upside.

The bank said it expected a €1.8 billion rights issue by the Irish bank to enable it repurchase preference shares held by the State.

The shares are part of the bank’s tier one capital and formed part of its bailout. The bank may want to redeem the shares during March as otherwise it loses the ability to repurchase them at par.

Nomura said further capital measures are the key signposts for the stock, and that the bank’s capital position could develop better in 2013 than the market expects.

It said it sees a material upside if positive outcomes for the signposts play out.

The Japanese bank’s views are more positive relative to the limited consensus. It said investors should focus on the longer-time horizon given the potential for high volatility and assigned the stock a price target of €0.20.

The share price fell by 2.9 per cent yesterday and closed at €0.13.

Future profits

Meanwhile, at a meeting of the Dáil Committee on Public Accounts yesterday, the chairman of the Revenue Commissioners, Josephine Feehily, said the liquidation of the Irish Bank Resolution Corporation meant the calculated amount of losses that were available for use against future profits as a result of the downturn were reduced by some €30 billion.

The committee was considering a report from the Auditor and Comptroller General which said the total amount of such losses available was of the order of €119 billion.

Ms Feehily told Kieran O’Donnell (Fine Gael) that the bulk of these losses were owned by the banks.

The IBRC incorporated the former Anglo Irish Bank and Irish Nationwide.