IL&P profits fall 10% after €47m US loss

IRISH Life and Permanent reported a 10% fall in after tax profits for 2003 yesterday after a €47 million loss on the sale of its last American business.

Stripping out the loss on the disposal of Guaranteed Annuity, which was sold last June, IL&P saw operating profits rise by 3% to €363m for the year to end December 2003 helped by a rebound in life and pension sales, and strong banking profits. But after tax profits for the year were down from €290m to €261m.

IL&P said underlying adjusted earnings per share were 3% lower last year at 111.6c, but this was due to the Government's banking levy which took 4.5c, or €12.2m, off earnings. Despite the dip in profits IL&P is increasing the final dividend by 7.4% to 51c.

PermanentTSB, the company's banking arm, saw a surge in profit from €97.4m to €128.8m, helped by a 30% rise in mortgage lending. PermanentTSB said new mortgage lending was €3.8 billion last year. IL&P's chief executive David Went said he was not concerned about the strong growth in the mortgage book as loan-to-value ratios were still conservative.

Other lending was also ahead with total lending for the year up 17% at €17.1bn.

During 2003, IL&P completed the integration of TSB into its existing operation, saving some €9m in costs last year. Mr Went said further cost savings would be looked for in the next two years. Mr Went confirmed this would mean further job cuts but said this would be achieved through "natural wastage". He declined to say how many positions would go.

On the life and pensions side, IL&P said 2003 sales, stripping out SSIAs, were slightly ahead on 2002's figures. Including SSIAs, sales fell from €417.6m to €319.m. However, there was a 8% rise in corporate business sales to €98m with growth in defined benefit and defined contribution scheme pension sales.

Mr Went said retail pension sales were lower, though they picked up towards the back end of 2003 with a 22% rise in the six months to December from the take-up of Personal Retirement Savings Accounts (PRSAs).

Brokers said yesterday the results were better than had been expected.

"The strong second half recovery in life and pensions volumes and margins augurs well for 2004 and beyond," Davy Stockbrokers said.

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