IL&P exposure to property market low

IRISH Life & Permanent (IL&P) stands out from the rest of the Irish banks under government guarantee.

Its exposure the property market is small compared to other banks now about to transfer assets to NAMA.

In his statement yesterday the Finance Minister did not include any of the mortgage and life and pension group’s loans in his NAMA plans.

The bulk of the group’s lending is for residential and commercial mortgages and its subsidiary, Permanent TSB, is the biggest mortgage lender in the Irish market.

Compared to the other lenders the group has total impaired loans of €442m with lending for residential mortgages in the Republic accounting for €227m of the total figure.

Bad debts from lending to the commercial sector currently stands at just €67m, which indicates how little exposure the group has to property and construction.

Chief executive Kevin Murphy said at the recent publication of the group’s interim results that it could raise €200m later this year through the securitisation of its life book which would ease any concerns about its funding capacity going forward.

It has been suggested too that IL&P’s mortgage business could in fact be absorbed into a “super mutual bank” led perhaps by EBS Building Society and also incorporating Irish Nationwide.

Such moves will be on the back burner however until such time as NAMA is passed into law.

The group is also due to hold and EGM later this year to change the structure of the company.

Some suggest this is in preparation for the sale of its mortgage book which could then be mopped up by EBS.

EBS which published interim figures last week stressed the importance of a “super mutual” as a counter to AIB and Bank of Ireland in the Irish market.