IL&P profits hit €531m

A SURGE in pension sales and investment gains has lifted full year pre-tax profits at Irish Life & Permanent nearly 15%.

Profits at the group rose by €67 million to €531m with sales of pensions, life assurance and investment products contributing to the increases.

Stripping out gains from investment markets, which totalled €94m in 2005, operating profits were 9% higher at €420m. The firms chief executive David Went said the group saw a strong pick-up in business activity in the second six months of 2005, with sales of pensions and mortgage lending very strong in December.

For the year as a whole, IL&P’s life assurance arm brought in €222m to the operating profit line, €30m more than in 2004.

The contribution from new business was €94m, up from €58m in the previous year. Irish Life retail sales were up 34% to €238m, while corporate sales were up 17%.

Permanent TSB profits were up just 6% at €148m despite a strong rise in lending. Mr Went said Permanent TSB was hit by a number of exceptional charges and a loss on trading income.

New mortgage lending was ahead by 28% to €6.3 billion, while lending for cars and other loans was up 17% to €1.6bn. The profit contribution from Allianz Ireland, in which IL&P holds a 30% stake, fell by €2m to €54m, reflecting a fall in insurance premiums.

Mr Went added that earnings this year would be boosted by the release of SSIAs.

Brokers said the performance of its life arm was ahead of expectations, but overall the results were mixed.

NCB Stockbrokers said: “While the headline numbers were 6% ahead of our estimates, IL&P benefited from a favourable tax charge. The underling profits were slightly below our above consensus earnings forecasts.

“Despite this, the results highlight encouraging underlying trends in the second half performance that are positive for 2006).”

Shareholders will see their dividend rise by 10% to 60.5 cents per share.

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