Robust economy sees Irish Life on course to achieve all its targets

IRISH Life & Permanent is on course to meet all its targets for this year, buoyed by the strong Irish economy and a labour market that rose 70,000 in 2004.

The robust economy continues to underpin strong demand for its products and it must be borne in mind the economy is outperforming its European counterparts by a significant amount, Irish Life & Permanent chief executive David Went said.

This year, new bank lending will show low double-digit growth the first six months, boosted by €2.5 billion of new residential mortgage lending.

That compares with €2.2bn in the same period last year, but is down on the second half for 2004. Mr Went said the second half of the year traditionally tends to be the strongest.

During a conference call he told Seamus Murphy of Merrion Stockbrokers that July was a peak month for mortgages coming just before the traditional August holiday period for the construction industry. Builders tend to get houses finished in July and mortgage demand tended to reflect the availability of new housing stock.

Last week AIB, the country’s biggest financial institution bumped up its previous earnings guide for this year by about 2.5%.

IL&P said that taking swings and roundabouts its forecasts will meet what the market has already been anticipating. That view was shared by Davy Stockbrokers who said the trading statement was “broadly consistent with [its] expectations: the group indicates it is on course to meet its targets for the full year.”

Davy analyst Scott Rankin said the statement had “a very positive tone, with the group talking of an exceptionally strong economy and robust new lending in the bank, with margins trending in line with guidance.”

Meanwhile, on the life side, the group is enjoying good growth in new business volumes, with margins significantly ahead year-on-year.

“We are leaving our full-year forecasts unchanged at a contribution profit before tax of €402m and earnings per share of 121c.”

The brokers said they were also leaving its one-year share price target unchanged at 1612c.

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