Group open to merger of bank division with EBS

IRISH Life & Permanent (IL&P) has said it remains open to the idea of forming some kind of merger between its banking division and the EBS Building Society even if as expected it loses out in the race to acquire the latter business.

While the EBS sale process hasn’t been completed, IL&P’s rival bidder, the consortium led by Dublin-based company Cardinal Asset Management and backed by US billionaire investor Wilbur Ross, is in pole position.

Speaking at the presentation of IL&P’s annual results yesterday, group chief executive Kevin Murphy conceded the group hadn’t been successful in its pursuit of the EBS, but said that management was keeping “open-minded” on the matter.

“We’ll consider any opportunities that may arise from the end of that process,” he added.

Mr Murphy said a strong banking network in Ireland is reliant on smaller banks merging, and added that IL&P would be “actively participating” in any strategic opportunities that become available.

IL&P said that there are a range of possibilities with regard to Permanent TSB and the EBS including potentially selling the former to the EBS’s new owners or merging the two entities.

Mr Murphy stressed that IL&P would be willing to talk to Cardinal on the matter.

However, the group is keeping its rights issue plans on hold until more is known of the Central Bank’s updated capital requirement guidelines for the banks — due at the end of this month — and until a firm strategic option presents itself.

IL&P also said that the first quarter of this year will see it cut another 280 staff from its banking division, bringing about annual cost savings of around €31m.