IPM Irish Life&P.Gp

RNS Number:8882N
Irish Life & Permanent PLC
14 December 2006


                            Irish Life & Permanent plc
                       Pre-close period Trading Statement

                                                           12.00pm Dec 14th 2006

Irish Life & Permanent plc issued the following trading statement ahead of its
closed period for the year to 31 December 2006.

Overview

The economic context in which the group is operating is very positive and
supportive of the business. The Irish economy continues to outperform with
forecast 2006 GDP growth of circa 6% and annual employment growth for 2006 of
almost 5%.

Our banking business is enjoying record volume growth in a buoyant market where
it is winning customers and market share. This performance together with a
strong treasury result is expected to deliver significant operating profit
growth - well ahead of previous guidance - in the bank for the year.

The group's life and pensions' business is also performing exceptionally well
with the strong first half performance continuing into the second half, with
some additional boost to Retail Life sales from maturing SSIAs. Operating profit
for the year is expected comfortably to exceed previous guidance.

Overall group pre- tax operating profit* growth for the year is expected to
exceed 20%.

Sales


Banking Business

Gross new lending for the group for the year is expected to grow by
approximately 30% for the year translating into growth in the loan book in the
high twenties percent. The main driver is new residential mortgage lending in
Ireland with an expected record level of gross new lending, between 35 - 40% up
on the 2005 new lending of Euro6.3 billion.

Capital Home Loans, the group's UK mortgage company, is expected to see its loan
book grow by around 20% for the year with second half new lending growth picking
up after a slow start to the year.

A major strategic focus of the bank in the year has been the acquisition of new
customers through our competitive current / checking account offering. We expect
to have opened over 80,000 of our new current accounts in 2006 (2005: 67,000) of
which approximately 80% are new current account customers and 20% upgrades from
existing accounts. Current account balances are expected to increase by high
teens percent for the year.

Life Business
Life sales in Ireland (excluding investment sales by ILIM) are expected to grow
by close to 30% for the full year. The Retail Life division has seen strong
investment bond and protection sales and the Corporate Life division continued
its excellent first half performance into the second half.

Institutional inflows into ILIM, the group's fund management business, are
expected to be circa Euro1.9 billion for the year (2005: Euro1.3 billion). ILIM
continued to win a broad mix of business in 2006 on the back of its excellent
fund performance.

Earnings


Banking Business

Net interest income is expected to grow in the low teens percent for the year
with the strong growth in lending assets offsetting the reduction in the net
interest margin. The margin for the full year is expected to be slightly ahead
of the previous guidance of 115 basis points mainly reflecting the benefit from
the greater than expected increase in current account balances off-setting
continued basis risk cost. As in the first half the basis risk cost was
compensated for in our treasury operations and trading profits for the year will
be significantly ahead of expectations. Overall therefore we expect mid-teens
percent growth in banking income.

Cost growth for the year is expected to be broadly in line with wage inflation.
Credit quality remains excellent and the increase in the impairment provisions
for the year will be well behind the growth in the loan book.

Bank operating profit growth is expected to exceed 30%.

Life Business

Life new business earnings for 2006 are expected to show growth in the order of
30%, and ahead of previous estimates. This reflects the expected sales growth
for the year and a life new business margin (ex-ILIM) of circa 20%, as
previously guided (2005: 20.4%).

The existing book of in-force life business is expected to generate low teens
percent growth in earnings for the year benefiting in particular from continuing
positive risk experience.

Anticipated life operating profit* growth is around 20%.

With investment returns year to date exceeding embedded value assumptions the
pre-tax investment impact ("short term investment fluctuations") was, as of the
start of December, running at circa Euro60m positive. Medium term interest rates
are currently ahead of the start of the year but have come back slightly from
their half year level. The resultant economic assumptions impact for the full
year 2006 is therefore expected to be less than half the Euro29m charge recorded at
the interim stage.

Associated Business

Allianz (Ireland), which carries on non-life insurance and in which the group
has a 30% interest, is performing well and our share of the full year outcome is
now expected to exceed Euro50m after tax.

Outlook

2006 will have seen the group strongly improve its market position and its
profitability. This gives us great confidence going into 2007 when we expect the
economy and the markets in which we operate to continue to offer tremendous
opportunities.

* Embedded value basis

Details of today's analyst conference call on this pre-close trading statement
are set out below together with company contact details.

Analyst Conference Call

David Went, Group Chief Executive and Peter Fitzpatrick, Group Finance Director,
will host a conference call for analysts at 14.30 GMT on Thurs 14th Dec 2006.

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) 655 8885
UK participant number                         (0) 20 7806 1955
US participant number                         718 354 1388
Other participants                            +353 1 655 8885

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 18.00 on 20 December. The telephone numbers and
access code are:

Irish participant number                       (01) 659 8321
UK participant number                          (0) 20 7806 1970
US participant number                          718 354 1112
Other participants                             +353 1 659 8321

Pass code for the replay 2514636#

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

The 2006 preliminary results announcement will take place on Wednesday 28th
February 2007.


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

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