IL&P said pre-tax contributions - essentially operating profits stripping out short-term investment fluctuations - were 10% higher at €400.2 million.
The company rewarded shareholders with an 8% rise in the full-year dividend to 55 cent.
The group yesterday said it had a very satisfactory performance in 2004 with its main business units - pension sales, mortgage lending and life assurance sales - all strongly ahead.
At headline level, IL&P’s banking profits were down 5% to €122.5m.
But stripping out a €26m one-off item in 2003, profits from the Permanent TSB were 19% up at €120m.
IL&P chief executive David Went said the rise in profits at the banking arm were boosted by mortgage lending, which was 30% ahead at almost €5 billion.
Overall lending rose by 23%, bringing the value of IL&P’s loan book to €21bn. Mr Went said: “More recently we have seen a moderation in rate of growth of house price.
“The most recent house price index suggests that that pattern is continuing this year, so our expectation for price increases is to be in the region of 5-7%, which, to my mind, demonstrates the soft landing that many commentators said would never come to pass.”
Mr Went said the group was also pleased by the performance of its British mortgage lending business Capital Home Loans.
“In the UK, new lending rose by 56% to almost €2bn. We’ve enjoyed a number of years now of solid growth in lending in the UK. Given the general softening of the market there at present we do expect some moderation of growth.”
IL&P earned €63m from its stake in general insurance company Allianz Ireland, up from €45m in 2003.
The group’s life business had a good year, with pension sales 42% ahead, helped by increased take-up of Personal Retirement Savings Accounts. Savings product sales were 87% due to higher SSIA top-ups.
The total pre-tax contribution from IL&P’s life assurance activities grew by 13% to €215m, retaining its position as the largest generator of profits for the group.
Shares in Irish Life & Permanent ended yesterday down 1% at €14.80.
“Overall, a solid set of results with the banking and life operations performing largely as expected and the associate contribution significantly ahead,” NCB analyst David Odlum wrote in a research report yesterday.
IL&P remains confident of a strong performance in 2005 as ‘the year has started well’. “We are likely to upgrade our 2005 earnings forecasts by approximately 5% due to the strong associate contribution.”