IRISH Life & Permanent (IL&P) has said sales of investment products fell in the first three months of the year and new mortgage lending was also lower.
In a trading update yesterday, IL&P said it had faced a much more challenging environment with volatile investment markets and tightening credit conditions.
IL&P said new business levels at its life and pensions division have been hit by the weakness in investment and property markets, with sales down 10% in the first quarter.
“This reflected an increase in pension sales, offset by a sharp fall in the sales of single premium investment bonds,” the trading statement said.
However, it said Irish Life Investment Managers, its asset management division, “continued to see strong institutional inflows in the first quarter”.
At its banking arm, Permanent TSB, new lending was down 15% in the first three months of the year, compared with 2007 as a result of the slump in the property market.
Despite the difficulties facing homeowners from higher mortgage costs, IL&P said its loan book remained in excellent condition with just 0.14% of loans in arrears.
IL&P said it has increased interest rates on a range of mortgage products to offset higher funding costs, and it is confident that it will be able to replace long-term debt maturing in the third quarter of the year.
The trading statement added: “The strength of our life and pensions business, together with the actions we have taken in our banking business to mitigate the impact of the credit crunch, should — outside of significant changes in conditions — leave group operating earnings broadly in line with current mean consensus estimates.”
The consensus estimate for the full year is for operating profits of €563 million (down from €590m in 2007) and earning per share of 182 cent (from 195c in 2007).
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