IL&P posts €196 million loss

Irish Life and Permanent posted an operating loss, before impairments of goodwill and tax, of €196 million last year, compared with a profit of €341 million for fiscal 2008.

The group said the bulk of the loss could be attributed to a €270 million operating loss at its banking arm permanent tsb which was driven by the cost of making a €376 million provision for impaired loans.

At 12.45pm shares in the firm were trading at €3.03, a gain of 2.3 per cent.

Before these provisions, permanent tsb bank recorded €106 million in profits, the group said.

The group’s life and pensions businesses recorded a profit of €102 million compared to €284 milion a year earlier, which the bank said reflected the weaker market for life & pensions businesses.

Irish Life and Permanent forecast an improved performance this year and a return to profitability in 2011.

"In 2010, I expect the banking businesses' results to be broadly similar to 2009 but I anticipate a significant improvement in the life businesses' profitability," Kevin Murphy, the company's chief executive officer said in a statement.

Mr Murphy said that the group has focussed on reconfiguring the businesses for this new market via a major cost-reduction programme and through strong growth in customer deposits in the bank which rose by €1.8 billion over the year under review.

In respect of arrears in the bank’s Irish mortgage book, Mr Murphy said IL&P was "working closely with customers in financial difficulty to agree realistic repayment schedules".

He said that at the end of 2009, 3.9 per cent of mortgages were in arrears for more than 90 days. This is equivalent to 7,228 mortgage accounts.

An estimated 22 per cent of mortgage accounts were in negative equity, he added.

“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," he said.

Mr Murphy said that the restructuring of the group which was completed in January last meant IL&P 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 the National Asset Management Agency (NAMA) and the recapitalisation of participating institutions.

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