IFG restructuring pain at an end as it makes €1.7m profit after 32.8m loss
It said profits fell 16% to €8m when exceptional items were stripped out. Revenues increased 3% to €91.4m.
Chief executive Richard Hayes said the last two years had been very difficult but that IFG was now well-placed to grow. The group saw strong growth in its core activities, which include financial advice, mortgage broking and fund management. But it was hit with exceptional costs of over €4 million in relation to its British pensions release business, Berkeley Jacobs, which was the subject of an investigation by the British financial regulator. The investigation focused on the sales and compliance procedures of the pensions release business, which encouraged people to cash in part of their pensions before they reached retirement age, in return for a reduced post-retirement income.
The regulator said Berkeley Jacobs showed “a blatant disregard for consumers’ interests” and issued a fine of £175,000 (€260,000) in February.
Berkeley Jacobs effectively ceased trading during the investigation. IFG replaced the company’s management as part of the restructuring programme and said the revamped business would not be as significant a contributor to the group as in the past. IFG’s Irish mortgage broking business performed well and now claims 7% of the mortgage market. The division almost doubled profits to €2.1m as its clients drew down €858m in new home loans, a 45% increase on 2002.
IFG has also entered into a joint venture with GE Capital Woodchester to develop the “non-conforming” lending business, which caters for customers whose circumstances make it difficult to get loans from mainstream lenders.
NCB analyst David Odlum said IFG results were encouraging.
