Irish Life & Permanent plc has announced a fall of 42% in its operating profits for 2008.
This, coupled with bad results in equity investments, has resulted in a loss after tax of €433m for the institution.
The figure – €341m - compares to €590m for 2007 and is made up of an operating profit of €284m in the Group’s life & pensions business (down 18% on 2007) and an operating profit of €30m in permanent tsb bank (down 86% on 2007).
The bank figure is dominated by exceptional provisions – largely arising out of losses made on debt securities placed with three Icelandic Banks and with Lehman Brothers as well as an increase in impairment provisions on the bank’s loan book. No final dividend is being paid.
Under-pressure chairman of Irish Life & Permanent plc, Gillian Bowler, defended the results as a “strong performance in a tough market”.
Bowler signalled out the performance of the life & pensions business where Irish Life and Irish Life Investment Managers both secured increased market share.
“We’ve demonstrated our ability to respond to the challenging conditions better than many of our competitors,” she said. “And while investment product sales were significantly down, sales of pension and protection products held up well.”
Bowler said the results reflected the general economic slowdown in the second half of 2008 which had impacted on both the life business and the banking business.
“The economic slowdown impacted on sales in the life business and through increasing impairments in the banking business,” sad Bowler. “However the bank remains very strong and it’s clear that because it’s a provider of personal home loans to retail customers, we’re clearly not faced with the massive impairment charges faced by many other banks.”
Speaking on the profit-after-tax figure, Bowler said that it was shaped by the economic impact of collapsing investment markets last year on the embedded value of the life & pensions business and because the bank had made a number of exceptional provisions to cover, for example, debt securities with Lehman Brothers which it still hopes to recover and with three Icelandic Banks held as part of the Bank’s normal treasury management programme.