A strong first-half performance from both its life and banking businesses lifted operating profits at Irish Life & Permanent by 23 per cent and left it well positioned to deliver a strong full-year performance.
"We were firing on all cylinders during the first half of the year and we increased market share in each of our key businesses," chief executive David Went said.
The company, which plans to pay an interim dividend of 20.1 cent, an increase of 13.5 per cent on 2005, expects the strong momentum seen in the first six months to continue in the second half of the year.
"All the factors are in place to underpin a further strong performance in the second half of the year," Mr Went said, noting the economy and housing market remained strong, while Ireland's demographic position was also highly favourable.
"All these factors will help drive demand for our core products and we are optimistic that the performance we've enjoyed so far this year will continue to the finishing line and beyond."
The group, which reported operating profits of €242 million compared to €196 million in the first half of 2005, said its life business turned in a 23 per cent increase in profits to €134 million, enjoying a 29 per cent share of the life assurance market.
Its new life business performed particularly well, with a 44 per cent rise in the value of sales to €65 million. On the retail side of its life business, the company said its investment business was very strong, reporting growth of 77 per cent.
Its banking operation, Permanent TSB, also enjoyed a good first half with operating profits rising by 36 per cent to €90 million as it opened 44,000 new current accounts. Despite the introduction by its rivals of their own free banking initiatives, the bank opened an average of 1,300 accounts a week, up from 1,000 last year, and remains confident it will meet its 2006 target of 60,000 new current accounts.
Mr Went said the mortgage business also bounced back after a weak first half in 2005 to command a market share of around 22 per cent. New Irish mortgage lending rose by 70 per cent, boosted by the introduction of a more competitive tracker mortgage product and the bank's focus on the "large ticket" residential investment mortgages sector.
First-time buyer mortgages of 100 per cent accounted for 13 per cent of its new Irish mortgage lending.
Despite recent increases in euro-zone interest rates, Mr Went remained positive about credit quality, noting that there had only been a slight pick-up in the loan-to-value (LTV) ratios of its mortgages over the last three years. At present, the average LTV for first-time buyers is 87 per cent, he said, while overall the average is 72 per cent.
"These are conservative figures and demonstrate our continued prudence," he said.
Elsewhere in the banking division, the consumer finance division, which involves the provision of car loans, enjoyed growth of 39 per cent in new lending.
The group's investment management business, Irish Life Investment Managers (ILIM), reported €1 billion in inflows in the first half, bringing its funds under management to €27 billion.
Although the results were ahead of forecasts, and analysts are looking at upgrading their full-year earnings estimates for the group, the share price lost 25 cent to €19.95 yesterday.
Asked if the group was interested in buying Irish Nationwide, the building society run by Michael Fingleton, Mr Went said Irish Life & Permanent would have a look.
"There are not many buses on the Irish financial services bus route," Mr Went said. "When a bus comes along, you have to take a look."
