LEADING IRISH bank chiefs sounded a rallying call on the strength of their operations and the economy yesterday at an investment conference in London organised by Morgan Stanley.

The chief executives of the four main banking groups - Eugene Sheehy of AIB, Brian Goggin of Bank of Ireland, Denis Casey of Irish Life & Permanent, owner of Permanent TSB, and David Drumm of Anglo Irish Bank - addressed investors, reassuring them that the Irish economy was still sound and that growth opportunities lay ahead for Irish banks, despite the property and lending slowdown.

Investors responded positively; Irish shares rose 4 per cent on the back of a strong performance by the four groups, despite Swiss bank UBS more than doubling US subprime-related writedowns to around $37 billion (€23 billion).

Anglo Irish Bank, whose share price has endured a turbulent time in recent weeks, surged ahead 9.3 per cent to €9.29, with about 3.8 million shares being traded.

AIB rose by almost 5 per cent to €14.17 and Bank of Ireland was up 4.5 per cent to €9.85. Irish Life & Permanent increased its share price by 3.8 per cent to €12.85.

"Ireland hasn't gone to hell in a bucket, nor is it going back to the bad old days of stagnation," Mr Casey told investors in his speech to the conference. "And this is not just a matter of good luck."

The Irish market offered "very exciting prospects driven by attractive, hard coded demographics, together with a strong, open, flexible and low tax economy".

He repeated comments made at the group's 2007 financial results presentation in February, saying its business model would "allow us weather the current turmoil and to take full advantage of the further opportunities that lie ahead".

He said arrears cases in its Irish residential mortgage book had been "reducing steadily over the past five years" and that there were "no signs of stress evident in any other part of our portfolio".

Mr Sheehy repeated earlier comments that AIB would re-enter the asset-covered securities market when the financial turmoil receded.

He said AIB's "credit cost trends" were "in line with expectations" and that the bank had "solid capital and funding positions".

Mr Drumm repeated Anglo's forecast of earnings growth of more than 15 per cent this year. He said the bank had strong asset quality, with bad loans amounting to less than 0.55 per cent of Anglo's loans and an annualised bad loan charge of 0.13 per cent.

He said that "when the fog lifted", there would be "significant growth potential in existing markets".