‘Poised for years of growth’

SHAREHOLDERS of Irish Life & Permanent (IL&P) have been told the next two years will see the group’s structure “dramatically changed”, after which the business will be “poised for years of growth.”

The message came from group chairperson Gillian Bowler, who also told the 500 present at Dublin’s RDS that “the journey to recovery is well underway”.

In responding to the findings of an external study into the group’s corporate governance framework – prompted by IL&Ps lending to Anglo Irish Bank at the tail end of last year – Irish Life will upgrade its risk management structure to make it impossible for such transactions to get past the board undetected, in future.

“The fact that they could have occurred without any reference to the board was the biggest shock and disappointment and we’ve taken steps that will prevent a recurrence. We’re committed to managing this business by the highest ethical standards and will take whatever steps are necessary to achieve that,” Ms Bowler said.

A new holding company for the group – pending shareholder approval at an upcoming extraordinary general meeting – will also, according to management, introduce more flexibility, clarity and transparency into group affairs.

With regard to trading during the first quarter of this year, IL&P said yesterday that new mortgage lending in its Permanent TSB retail banking arm was down by 20% on a year-on-year basis and the weaknesses are likely to remain for the full year. The bank’s loan book is also set to decline “modestly” this year.

With regard to operational regrets, Ms Bowler told shareholders that while the general rule is to “offer the market what the market wants”, the group’s issuance of 100% mortgage products was a mistake, given the benefit of hindsight.

On a day when all of the group’s board was re-elected by shareholders, she also added her support for the concept of the new ‘toxic’ bank project, NAMA (the National Asset Management Agency), saying that it was “an important step” in tackling the current problems surrounding the Irish banking sector.

Elsewhere, although not currently looking for any Government funding, IL&P still hasn’t ruled out applying for some re-capitalisation funds.

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