UK mortgage bank Northern Rock, which offers the most competitive deposit rates to savers in the Republic, is attracting buy recommendations. Commerzbank has issued the recommendation on the back of stronger-than-expected results from the bank and good prospects going forward.

While the market for mortgage banks remains very competitive, Northern Rock's strategy of low-cost distribution combined with capital and operational efficiencies continue to add shareholder value, according to Commerzbank.

Its results showed further pressure on profit margins, although much of this erosion was offset by strong asset growth. Fees generated from asset growth are the main driver behind income growth.

Northern Rock's new chief executive, Mr Adam Applegarth, is aiming for business as usual when he takes over at the end of the month. Analysts forecasts are unlikely to be altered by his arrival in the near term. Commerzbank is upgrading its target share price by 5 per cent to £5.95 sterling (€9.33).