Irish life & Permanent was downgraded by credit rating agency Standard & Poor’s (S&P) over its deteriorating earning prospects and a weak outlook for its banking unit, Permanent TSB.

The company’s long-term credit rating was lowered to BBB+ from A-, while its short-term rating fell to A-2 from A-1. Share price fell 1.9 per cent to €3.10.

S&P said that the company’s banking division “appears to have limited strategic options”. It said the company’s overall financial profile was relatively poor with pressure on margins due to reliance on wholesale funding and weakening loan quality.