Irish Life & Permanent has posted a slightly better-than-expected performance in the first half of this year, buoyed by good growth in its life and banking activities.
The group's profits after tax rose by 47 per cent to €164 million in the six months to the end of June and it is signalling a strong full-year performance.
Announcing the results yesterday, Irish Life & Permanent chief executive Mr David Went said the strong start, plus the continuing momentum in the business augured well for the full-year outcome. "The backdrop for our business is very positive given the strength of the Irish economy. Both our life and banking businesses are performing strongly and participating fully in the growth in their respective markets."
The strong out-turn was boosted by a 41 per cent increase in gross new mortgages and a 63 per cent increase in individual pension sales. Its life assurance business contributed €105 million in the first half of the year, up 8 per cent on the same period in 2003.
The contribution from its Permanent TSB banking business was down by 26 per cent to €56 million, compared with €75 million in the previous year.
The 2003 figures included a one-off €26 million gain on hedge securities. When this is deducted the banking operations achieved an underlying 14 per cent increase.
Its general insurance associate company raised its contribution to group profits by 56 per cent to €25 million.
Irish Life shares were weaker in Dublin yesterday, shedding 12 cent to €12.40. Shareholders will be paid an interim dividend of 16.5 cent per share, up 10 per cent on last year.
Its new life business grew by 22 per cent to €161 million and its margin improved from 12.1 per cent to 12.8 per cent. Irish Life Investment Managers recorded a 24 per cent increase in new business to €26 million.
Sales of savings products recovered, rising by 107 per cent. The demand for its pensions was solid with growth of 63 per cent and sales of investment products rose by 8 per cent.
Its banking division earned net interest income of €172 million and fees totalling €28 million. The profit margin on this business declined from 1.63 per cent to 1.44 per cent.
Its total new lending increased from €2.6 billion to €3.7 billion. Some 82 per cent of its new mortgage lending was to first-time buyers. Mr Went said 17 per cent of new lending was to investors purchasing residential property.
The group has reduced its provision for bad debt from €6.3 million to €4.1 million, saying it reflected the robust credit quality across its loan book.
Mortgage growth in the UK at its Capital Homes subsidiary increased by 76 per cent. The group's associate company, Allianz, contributed €25.4 million to its profits, more than €1 million ahead of expectations.
