THE CHAIRWOMAN of Irish Life & Permanent (IL&P), Gillian Bowler, is understood to have already received the support of 98 per cent of shareholders for her re-election in advance of the company’s annual meeting today.
Votes submitted by institutional and retail shareholders show that Ms Bowler – one of only two surviving chairs at the six Irish lenders guaranteed by the Government – will easily be re-elected at the meeting at the RDS in Dublin.
However, Ms Bowler is expected to face questions from angry shareholders on why IL&P lodged short-term deposits totalling €7.5 billion into Anglo Irish Bank last September, flattering the bank’s balance sheet at the end of its 2008 financial year.
The disclosure of IL&P’s deposits into Anglo Irish led to the resignations of IL&P’s chief executive Denis Casey, finance director Peter Fitzpatrick and head of treasury David Gantly last February.
Ms Bowler offered her resignation to the IL&P board but it was declined.
The board is likely to face question on why it refused her offer.
IL&P has said that while the Financial Regulator was unaware of the deposits in advance, the company was following a so-called “green jersey agenda” where the banks were encouraged to support each other last year with funding initiatives for the banking system.
IL&P is also expected to announce plans today to create a new holding company, paving the way for the splitting of its life business, Irish Life, and banking division, Permanent TSB.
The move will create several possibilities, including the potential sale of the bank and new investment for the life business, the value of which has fallen over concerns about Permanent TSB’s funding and rising losses on loans.
The bank borrowed heavily in the wholesale money markets over recent years to increase lending as the company became the largest mortgage lender in the State.
Due to rising unemployment, the company is expected to raise its bad debts forecast for the coming years, increasing its existing stress scenario of loan losses of €650 million between 2009 and 2011 stated at its results in March.
The creation of the holding company will have to be approved by shareholders at an extraordinary general meeting, which is likely to be held in July or September.
A spokesman for IL&Pdeclined to comment in advance of the company releasing a trading update this morning before the meeting.
The company is also expected to publish the findings of a report into corporate governance at the company by London-based consultants Oliver Wyman, which was hired following the controversy over the deposits into Anglo Irish.
The consultants are expected to recommend the appointment of a risk manager at senior executive level and better communication between IL&Ps executives and board on risk management issues.
IL&P’s share price has outperformed that of Allied Irish Banks and Bank of Ireland because it has no loan exposure to property developers. However, the company has lost €5.6 billion in value as the share price has fallen 81 per cent since its peak of €22.80 in 2007.
IL&P’s share price closed down 11 per cent at €2.44 yesterday, while AIB and Bank of Ireland rose 6 per cent and 8.3 per cent respectively.
