IFG shares tumble by 14%

SHARES in IFG tumbled 14% yesterday as the financial services company issued a profit warning.

The company told the stock exchange it had decided to quit the pensions release business in Britain in an effort to stave off further losses. It would also suffer from the need to invest in its insurance business, as well as lower trading margins from policies, it said.

IFG’s pensions release business had already cost it €4 million after the British financial services regulator, the Financial Services Authority (FSA), carried out an investigation into its sales and compliance procedures.

The business, which traded under the Berkeley Jacobs brand, had encouraged people to cash in part of their pensions before they reached retirement age to get a lump sum payment in return for a reduced post-retirement income.

The FSA concluded Berkeley Jacobs had shown “a blatant disregard for consumers’ interests” and fined it €260,000 earlier this year. IFG reacted by replacing management at the subsidiary and installing a new chief executive for its British operations.

But IFG was more upbeat about its Irish mortgage broking activity, its international operations and British pension trustee business. The group said it had reorganised its internal management structures by splitting the business on a geographic basis. Deputy chief executive and finance director Mark Bourke takes responsibility for its Irish operations.