IPM Irish Life&P.Gp

RNS Number:8906N
Irish Life & Permanent PLC
22 June 2005


                           Irish Life & Permanent plc
                     Pre-close Trading Statement June 2005
                                                   Issued: 12.00PM Jun 22nd 2005

Irish Life & Permanent plc issued the following trading statement ahead of its
closed period for the 6 months to Jun 30th 2005. This guidance on trends in the
business for the half-year is provided on the group's existing reporting basis -
Irish GAAP.

Overview
--------
The environment in which the group is operating continues to be positive as the
Irish economy is performing exceptionally well with rapid employment growth and
strong domestic demand.
Bank new lending growth is robust with the margin outcome expected to be within
the target range. In our life assurance business we are enjoying good growth in
new business volumes with margins significantly ahead of the prior year.

Sales
-----
Banking Business

Gross new lending for the group in the first half of the year is expected to
show low double-digit growth with the total loan book growth exceeding 20% year
on year. The main driver of this growth is new residential mortgage lending in
Ireland which continues to be buoyant with expected gross new lending of
approximately Euro2.5 billion for the first six months (2004: Euro2.2 billion).
Capital Home Loans, the group's UK mortgage company, is also continuing to enjoy
good loan growth and new lending is expected to increase by over 10% on the
prior year.
A major focus of the bank in the first half has been the acquisition of new
customers through our competitive current / checking account offering. We expect
to have opened about 34,000 of our new current accounts in the first six months
and current account balances are expected to show high teens growth year on
year.

Life Business

Life sales in Ireland (excluding investment sales by ILIM) are expected to show
low-teens growth at the half year. The Retail Life division sales are strongly
ahead showing high teens growth over the first half of 2004. Pensions and
savings in particular are showing excellent growth. The Corporate Life division
is expected to record modest sales growth in the first half but with a strong
new business pipeline going into the second half.
Institutional inflows into ILIM, the group's fund management business, are
expected to be circa Euro700m for the first six months. The vast majority of these
inflows are comprised of on-balance sheet sales into unit-linked funds.

Earnings
--------
Banking Business

Net interest income is expected to grow by 9 to 10% for the half year with the
strong growth in lending assets offsetting a reduced net interest margin. The
margin for the first six months is expected to be between 130 and 133 basis
points versus 140 for the full year 2004. The margin reduction reflects the
impact of increased levels of wholesale funding to support the 20% growth in
loan balances and the increasing proportion of residential mortgages in the
lending mix.

Other income is running behind target due to a less favourable treasury result
in the period. This reflects the greater volatility in treasury earnings
resulting from the adoption of new operating practices and procedures in order
to comply with the requirements of IAS 39 from the start of the year.

We continue to maintain the strong focus on cost management and the total bank
costs for the half-year are expected to show a modest increase well short of
wage inflation rates. Exceptional costs in relation to the bank's change
programme will be provided for in the second half.

Life Business

We expect to report very strong growth in our new business earnings for the
first half with margins exceeding our full year target of 15%. The main
drivers behind this performance are the increase in sales together with a more
favourable product mix and an improved margin on new protection / risk business.

The contribution from the existing book of life business is expected to be in
line with previous guidance. The improvement in investment markets in the first
half of the year will, if maintained, exceed the embedded value investment
assumptions and, as of mid-June, the resultant short term investment
fluctuations were running at circa Euro30m positive.

Operating costs in the core life business are expected to increase by 7 / 8 %
reflecting increased sales activity as well as higher pension funding costs
being charged for the first time in 2005.

The sale of City of Westminster Assurance (CWA), our UK closed book of life
business, was completed on June 2nd and a loss of Euro22m arose on the disposal
reflecting a discount to the embedded value at end 2004. Accordingly life
earnings for the half-year will not include any contribution from CWA.

Associated Business

Allianz (Ireland), which carries on non-life insurance and in which the group
has a 30% interest, is performing well and the first half outcome is expected to
be within the range previously guided.

Outlook
-------
A strong economy and, in particular, a buoyant labour market provide a positive
backdrop for both our banking and life businesses, supporting good demand and
volume growth. We are very satisfied with the progress made year to date and are
on course to meet our targets for the full year.

Details of today's analyst conference call on this pre-close trading statement
are set out below together with company contact details. The actual 2005 interim
results announcement will take place on Wednesday 7th September 2005.

Analyst Conference Call

David Went, Group Chief Executive and Peter Fitzpatrick, Group Finance Director
will host a conference call for analysts at 15.00 BST on Wed 22nd June 2005.

To join the conference call, please dial in to the relevant number below 5
minutes before and ask for the Irish Life & Permanent call.

 Irish participant number   (01) 659 2811
 UK participant number      (0) 207 784 1020
 US participant number      718 354 1157
 Other participants         +353 1 659 2811

The conference call will also be available via the LIVE service on
Bloomberg.

Replay Facility

A replay of the conference call will be available two hours after the call. This
service will be available until 5.00pm on 1 July. The telephone numbers and
access code are:

 Irish participant number (01) 659 8321
 UK participant number    (0) 207 784 1024
 US participant number    718 354 1112
 Other participants       +353 1 659 8321
 Pass code for the replay 5837415#

Contact details

David McCarthy, Group Chief Financial Officer
Tel: +353 1 856 3050

Barry Walsh, Head of Investor Relations
Tel: +353 1 704 2678

Ray Gordon, MRPA KINMAN Consultants
Tel: +353 1 6788099



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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