Accountancy firm KPMG has won the lucrative contract to act as auditor to the merged Irish Life and Permanent group with estimated fees of up to £750,000 (€952,000) per annum. Ernst & Young, which had been retained as auditors by Irish Life since its flotation, lost out to the bigger firm which currently acts for Irish Permanent.

Irish Permanent shareholders will be asked to approve the appointment of KPMG as auditors to the new company at its annual general meeting later this month.

The Irish Life contract was worth in excess of £700,000 to Ernst & Young in 1997. The firm was paid £600,000 for its audit services that year and earned an additional £123,000 for other accountancy services to the life assurance group. Its fees in 1998 would have been substantially higher given the increased workload caused by the merger with Irish Life.

KPMG's fees from Irish Permanent were substantially smaller in 1997 at £208,000 rising to £221,000 in 1998, according to the latest annual report.

The merger has triggered a number of new professional arrangements. Both companies retain separate stockbrokers, with Davy representing Irish Life and ABN AMRO acting as brokers to Irish Permanent. No decision in regard to any change in these arrangements has been made yet.

TSB also offers current account facilities for Irish Life customers whose investments are maturing but this is expected to be eventually switched to Irish Permanent.