The businesses of Irish Life & Permanent “continue to thrive” according to the Group Chief Executive David Went.
Mr Went was speaking at a presentation on the Group to Analysts and Investors held today in London.
The purpose of the presentation was to update the market on the group’s key businesses and to outline the likely impact on the group’s reported profits arising from the introduction of IFRS accounting from the January 1 next.
While Mr Went explained that the presentation did not represent an update on trading (the pre close trading statement will be published on December 16 next), he did say that “after a very solid first half - both on the sales and earnings front in all of our businesses - the second half has been a period of further progress throughout the group".
On the issue of IFRS accounting, the Group Finance Director, Peter Fitzpatrick and Chief Financial Officer, David McCarthy made a presentation on the likely impact on the group’s reported profits of the introduction of IFRS based accounting from the first of January next (2005).
The move to IFRS accounting will significantly change the way in which the group formally reports its financial performance.
The impact will be to increase the reported level of profits arising from the group’s banking activities.
In respect of its life assurance activities the impact will be to reduce reported profits.
To illustrate the impact which the change will have, Peter Fitzpatrick demonstrated how the use of IFRS accounting methods would have impacted on the group’s reported accounts for 2003 if it had been in force at that time.
Mr Fitzpatrick suggested that the use of IFRS at that time would have reduced the reported profits of the group by around 10-20% depending on the final interpretation of the standard.
However Mr Fitzpatrick emphasised that the change merely reflected a different way of reporting costs and income and over time the two accounting methods give the same answer.
In particular Mr Fitzpatrick emphasised that the changes will have no impact on the statutory profits of the group, its strong capital position or its underlying cash flows which support dividends and business growth.
He said that the move to IFRS would probably increase the complexity of the group’s accounts and make them less user-friendly.
Finally Mr Fitzpatrick said that while Irish Life & Permanent would start IFRS reporting at the publication of the group’s accounts for the first half of the 2005 in September next, the group will, in line with other quoted life companies, continue to produce Embedded Value accounts as these “provided greater clarity around the performance of the businesses and were of more relevance to management in running the business and to investors in valuing it".