Overview
Irish Life & Permanent is a leading provider of personal financial services in the Irish market with strong market positions in life and pensions, fund management and retail banking. The group formed from the merger of Irish Life plc and Irish Permanent plc in 1999. The strategic focus of the group is the retail financial services.
Following the bank stress tests in Ireland in March 2011 and the subsequent recapitalisation of the company though a Government capital injection, a major restructuring of the group will take place over the coming months which will result in the separation of the group’s life and banking businesses.
Irish Life is Ireland’s largest life assurance company and the market leader in the provision of life, pension and investment products. Its products and services are distributed through a wide range of channels including bank branches, independent intermediaries and brokers, the Irish Life salesforce and directly to customers.
permanent tsb, formed following the acquisition of TSB Bank in 2001, is the retail banking operation of the group and is a leading provider of residential mortgage finance in Ireland. It offers a full range of personal banking services in the Irish market through a multi-channel distribution network of branches, intermediaries, retail outlets and internet.
In partnership with Allianz the group holds a minority interest in Allianz (Ireland), the third largest general (non-life) insurer in the Irish market. The group’s activities outside Ireland are confined to the UK where we have a niche centralised mortgage lending operation, Capital Home Loans, which has been closed to new business since early 2008.
The Group has over one million customers in Ireland.
Financial review
| Financial Results |
2010
€ |
2009
€ |
2008
€ |
2007
€ |
2006
€ |
| Operating profit / (loss)* |
(197)m |
(196)m |
341m |
590m |
529m |
| Profit / (loss) after tax* |
(198)m |
(279)m |
(433)m |
404m |
561m |
| Life & investment new business (APE) |
572m |
539m |
714m |
1,014m |
706m |
| New lending |
0.6bn |
1.2bn |
7.1bn |
12.4bn |
12.9bn |
| Loan book |
37.6bn |
38.9bn |
39.9bn |
39.2bn |
33.8bn |
| Bank Equity Tier 1** |
10.6% |
11.3% |
9.2% |
8.7% |
10.4% |
| Life solvency cover (times) |
1.75 |
1.6 |
1.6 |
1.6 |
1.8 |
| Life embedded value |
1.7bn |
1.6bn |
1.6bn |
2.0bn |
2.1bn |
| Shareholder’s equity* |
2.0bn |
2.5bn |
2.8bn |
3.4bn |
3.2bn |
* Life business included on an embedded value basis ** Regulatory capital position on a Basel II basis |
- 2009 Financial Review
-
The Group operating results for 2009 was a loss of €196m (2008: €341m profit) as reported on an embedded value basis. Lower sales and weakening persistency in the life business and rising loan impairments and higher funding costs in the bank were the principal causes of the turnaround in the operation results in 2009.
Total Group Loss after Tax in 2009 of €279m includes the impact of falling investment values, principally property (-€68m), and rising medium term interest rates in Ireland (-€38m) on the embedded value of the life business. In the prior year the sharp fall in values across almost all investment markets was the driver of the Group Loss after Tax of €433m.
Notwithstanding the difficult trading conditions and falling property markets the Group’s Total Capital (all Tier 1) ratio remained at 9.2% in 2009, compared to a regulatory minimum requirement of 8%. This ratio includes an additional interim capital requirement of 23% applied by the Financial Regulator.
The solvency margin in Irish Life Assurance continued to be covered 1.6 times by available assets in 2009 (2008: 1.6 times). The strong surpluses emerging from the in-force book met the additional capital requirement from new business and absorbed the impact write-downs on property asset valuations.
The embedded value of the Group’s life assurance activities remained constant at €1.6bn in 2009 with the positive operating result being cancelled by the fall in asset values and the effect of a higher risk discount rate. The reduction in overall shareholder equity from €2.8bn in 2008 to €2.5bn in 2009 was principally due to the operating losses incurred in the banking business in 2009.
Group structure - principal subsidiaries and associates
To view our Group structure click on the image below to enlarge.
