Strong first half results from AIB must reopen the question over the bank's languishing share price.

At around €9 the shares are at a sharp discount of about 40 per cent to the banks euro zone peers, and well off their year 2000 high of €11.20.

With first half profits, at €609 million, ahead of expectations and relatively clear of one-off boosting factors, a commitment to producing low double-digit earnings growth and a well diversified earnings base, the shares should be set for a re-rating on a value basis.

Issues like the bank's DIRT liability and margin pressures in the domestic market as new low-cost entrants start to cherry pick at mortgage and savings business have cast a cloud over AIB and other bank shares.

But the major depressing factors are ones over which the bank's strategists have no influence.

These are the continuing sell-off of Irish shares by Irish fund managers as they rebalance their portfolios and the fears in overseas markets, particularly in London, that the Irish economic bubble is set to burst.

No amount of explaining will convince overseas institutions that the Irish economy is headed for a soft landing, so there is no big foreign move into Irish equities to replace the departing domestic funds.

While his investor relations people continue to try and convince fund managers in Europe and the US about the Irish story, AIB group chief executive Tom Mulcahy is making the best out of a bad lot.

As long as the share price continues to languish, he is charging investment in future growth and development to the profit and loss account. But AIB executives must be wary that its low share price could prove attractive to European banks looking for a good slice of the highly profitable Irish market.