Irish Life & Permanent reports rise in profits to €270m for first half

IRISH Life & Permanent reported a 32% boost to pre-tax profits to €270 million for the first half of 2005, over the same period last year.

Despite the sharp rise in earnings the shares in the group fell 34 cent to €15.06.

The drop is part explained by the statement of the results also under the European Embedded Value measure.

It takes account of potential future earnings based on existing policies and it showed profits were up by just 5% at 196m, slightly below expectations.

Earnings per share rose 21% to 81.5c, while a 7% higher interim dividend of 17.7c was announced.

Chief executive, David Went, described the performance as “outstanding on the life, very solid on the banking side and very satisfactory over all.”

Despite the good results Mr Went, speaking on radio yesterday, played down speculation it could be a takeover target and said the group had absolutely nothing to disclose in that sense.

Profits were driven mainly by an increase in the contribution from its life assurance activities, as new business profits jumped 61% to €45m.

The group reported flat banking profits at 66m, which were impacted by a €7m charge linked to the change to the new IFRS accounting system.

IL&P’s share of profits from insurance group Allianz moved up from €22m to €24m, due to favourable market conditions and improved investment markets.

Total lending at Permanent TSB rose 22% to €23.3 billion.

New lending reflected the rising demand in the market generally and was up 13% at €4.2bn.

New mortgages demand rose 12% to €2.5bn while profits in insurance and investments rose by 7% to €109m.

Sales in the retail life division increased by 24% to €102m, with sales of savings products up 69% and pensions 29% higher.

During the past eight months, the group’s move into broader-based banking resulted in 42,000 current accounts being opened.

That reflected the abolition of regular transaction charges for current accounts, said Mr Went.

In the context of the life business Mr Went referred specifically to the strong performance of its retail sales.

“Our retail business enjoyed a great start to the year. Pensions sales in the retail business are up 29%, protection and risk sales rose 25% and retail sales in general are up 24%.”

In the case of banking, Mr Went said the group was using a three-pronged strategy to deliver good performance to the group.

First of all, the group is working on transforming how it does its business to improve efficiency and deliver a much better sales focus within the business.

It is policy that the group will either match or beat its competitors while also trying to reposition itself as the main alternative to the two big banks, he said.

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