Irish Life had its credit rating upgraded by Standard and Poor’s after the company’s separation from Permanent TSB and the significant reduction in its risks and exposure to the “weaker” banking group.
The investments and pensions company, which was taken over by the Government last week as part of the completion of the State’s €4 billion recapitalisation of Permanent TSB, had its rating raised by two notches to “BBB+” from “BBB-”.
Standard and Poor’s said it did not expect the Government’s planned sale of Irish Life to take place before 2014. The company was placed on negative watch, in line with the rating on the Irish sovereign, meaning its rating could be downgraded.
The rating reflected the firm’s “strong competitive position, a diversified distribution base and very strong risk-based capital adequacy”, the agency said. These were offset by the fact Irish Life was primarily based in Ireland where it is reliant on the “weakened Irish economy”. The agency said the firm’s relatively volatile operating performance leaves revenues sensitive to equity market conditions.