Irish Life & Permanent posts losses of €196m
The deterioration in the financial services group’s headline figure was mainly driven by the poor performance of its retail banking and lending division, Permanent TSB (PTSB), which posted an operating loss of €270m last year. This was down from a divisional profit of €30m in 2008.
The first half of last year saw IL&P, as a whole, post a pre-tax loss of €220m, down from a profit of €62m for the same period the previous year.
Management expects full group profitability to return in 2011.
Within the PTSB business, which recently announced the closure of 11 branches and the cutting of around 120 jobs in a significant cost-cutting exercise, just under 4% of residential mortgage customers were in arrears (equating to 7,228 accounts) for more than 90 days during the year, with an estimated 22% of the bank’s mortgage customers in negative equity.
Provisions put aside for impaired loans, on a group basis, amounted to €376m for the year.
“The problem of arrears is a real and painful one for customers.
“And we’re working closely with customers to agree realistic repayment terms for those in financial stress,” said IL&P’s group chief executive Kevin Murphy.
He added that the level of mortgage arrears among PTSB customers should reach a peak this year.
However, he also said that this year, on the whole, will be one of equivalent difficulty for IL&P, albeit hopefully not as difficult as 2009 proved.
Mr Murphy said that IL&P had “a difficult year” last year but should return to profitability next year, following on from a slight improvement in conditions this year, when an upturn in the overall economy and in the group’s life division (which showed a profit of €102m last year) should occur.
IL&P’s share price rose by 2c, yesterday, to reach a closing price of €2.98 – nearly €2 over AIB and Bank of Ireland’s current share prices.
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