Irish Life & Permanent is delivering the benefits identified when the two groups merged in 1999 and is now focused on generating further profit growth for shareholders from the integration of TSB. The primary benefit has been its success in achieving increases in sales of its life assurance products through the Irish Permanent branch network - something that will be further boosted by the addition of TSB Bank. Last year, sales of group products at Irish Permanent were up 55 per cent to €29.3 million.

Its policy of bringing brokers on an incentive trip to South Africa at a cost of almost €634,869 also seems to have paid off. Brokers generate the largest proportion of the group's sales and last year achieved a 46 per cent increase to €72.8 million. This compares with €42.2 million from its own sales force.

Further cost savings from the merger were also delivered, amounting to €15.7 million.

Irish Permanent has held on to its dominant position in the mortgage market claiming to have retained a 21 per cent share despite intense competition. The bank has indicated that asset quality is very high and is very comfortable with its loan book.

Another pressing matter is its US life assurance businesses which have once again put in a very bad performance. It owns three companies, Interstate in Des Moines, Iowa, which it has owned for the past 13 years, First Variable in Chicago and Guarantee Reserve. The businesses are being increasingly integrated but profitability slumped to just €2 million last year. Chief executive Mr David Went said a thorough review of these operations, valued by Irish Life & Permanent at €465.3 million, was now under way.

These businesses are relatively small and operating in a difficult market. Mr Went stressed there was no question that the group would be discussing another poor performance again next year and would not invest any further capital in them.

The group is likely to opt for a trade sale but may find it difficult to realise a price close to its book value of €465.3 million. Mr Went said it had already had several unsolicited offers for the business but obviously none were realistic in terms of delivering value for Irish Life & Permanent shareholders.