Irish Life & Permanent plc publishes preliminary results for 2009

• Group records operating loss of €196 m.


• Loss driven by operating loss at permanent tsb bank of €270 m


• Life company records profits of €102m in weaker market


• Group predicts improved performance in 2010 and return to profitability in 2011.

[figures are in Embedded Value terms]

Group Financial Performance:

The Group recorded an Operating Loss of €196m for the year.

The key factor in this result was the performance of the bank which recorded an operating loss of €270m. This was driven by the cost of making substantial provisions [€376m] for impaired loans in the Group’s mortgage and consumer finance divisions in Ireland and the UK. Before making provisions, permanent tsb bank recorded €106m in profits.

The Group’s life & pensions businesses [Irish Life, Irish Life Investment Managers] recorded a profit of €102m (2008: €284m) which reflected the weaker market generally for life & pensions businesses.

Kevin Murphy described 2009 as a “difficult year” but said that the Group was confident that the performance in 2010 would improve on the back of increased profitability in the life & pensions business – flowing from actions taken by the Group in 2009.

Murphy said that the Group has focussed on reconfiguring the businesses for this new market and had progressed major cost reduction programmes in both the bank and the life company as well as good progress on customer retention in the life business and strong growth in customer deposits in the bank [an increase of €1.8bn in the year].

Arrears in bank:
In respect of arrears in the bank’s Irish mortgage book, Murphy said the bank was working closely with customers in financial difficulty to agree realistic repayment schedules. He said that at the end of 2009, 3.9% [7,228 mortgage accounts] of mortgages were in arrears for more than 90 days. An estimated 22% of mortgage accounts were in “negative equity”.

Murphy said; “The problem of arrears is a real and painful one for customers and we are working closely with customers to agree realistic repayment terms for those in financial stress. Where customers talk to us we invariably can agree workable solutions with them.”

Strategic Agenda:
In respect of the Group’s strategic agenda, Kevin Murphy said that the restructuring of the Group which was completed in January last meant the Group was well positioned to participate in any consolidation which might take place in the Irish market in the coming months.

He anticipated that the next steps in this process will follow the introduction of NAMA and the recapitalisation of participating institutions.

He said; “we are optimistic that clarity on this issue will be established over the coming months.”

Outlook:
Murphy expressed cautious optimism that 2010 would be a better year for the Irish economy generally and would see an improved performance in the life company in particular. He said the Group was predicting a return to profitability in 2011.

Please see full details of the results – and related commentary – on the Results Centre page

Further Information:
Ray Gordon
Gordon MRM
Ph: 01 6650452
Ph: 087 2417373