IPM Irish Life&P.Gp

RNS Number:7659Y
Irish Life & Permanent PLC
21 June 2007



                              Irish Life & Permanent plc
                         Pre-close period Trading Statement

                                                           12.00pm Jun 21st 2007


Irish Life & Permanent plc issued the following trading statement ahead of its
closed period for the six months to June 30th 2007.


Overview


The Irish economy continues to perform strongly with robust consumer demand,
rising incomes and continued employment growth. This is a very supportive
backdrop for the group's businesses. Expectations for the year are for consumer
expenditure growth of over 7% which, coupled with employment growth of 3-4%, is
expected to translate into annual GDP growth of circa 5%.


The group's life and pensions business is enjoying extremely buoyant trading
conditions - in part boosted by SSIA maturities - and volumes are expected to be
very strongly ahead in the six months to end June. Irish Life Investment
Managers expects to receive, once again, record inflows in the period.


The group's banking business, while seeing lower levels of new Irish residential
lending as the property market slows from its record high, will see overall
gross new lending on par with the previous half-year and will deliver strong
growth in its loan book. The bank continues to acquire record numbers of new
current account customers.



Sales


Banking Business

Loan book growth for the first six months of the year will exceed 20% year on
year with all lending activities contributing to this growth.


The Irish residential mortgage book is expected to see growth of about 20% on
foot of new lending of circa Euro3.4bn (2006: Euro4.2bn).


Capital Home Loans, the group's UK mortgage company, is experiencing very strong
new lending growth and the loan book at end June is expected to show growth of
about 30% year on year.


Both consumer finance and commercial lending are performing well and we should
see those loan balances grow in line with, or ahead of, overall loan book
growth.


A major strategic focus of the bank has been the acquisition of new customers
through our competitive current / checking account offering. We expect to have
opened over 34,000 new current accounts in the first six months of the year and
are on target to open in excess of 60,000 accounts for the full year. Current
account balances are expected to show low teens percent growth year on year.


Life Business

Life sales* in Ireland (excluding investment sales by ILIM) are expected to grow
in excess of 35% for the half year. As well as strong sales of investment bonds
the Retail Life division is enjoying tremendous growth in pension sales.
Protection sales are expected to grow more modestly than in the previous period
reflecting slower mortgage activity in the half year. Sales in the Corporate
Life division continue to benefit from employment and income growth with defined
contribution sales - new schemes and increments - well ahead.


Institutional inflows into ILIM, the group's fund management business, for the
first six months of 2007 will be over Euro2 billion, exceeding the Euro1.9bn of
inflows for the full year in 2006.


*APE basis


Earnings


Banking Business

Bank revenues for the first half are expected to show mid-teens percent growth
on the back of strong growth in net interest income. This reflects, firstly, the
growth in the loan book and, secondly, margin development in the first six
months which is expected to be in line with guidance.


Low teens cost growth in the first half reflects expenditure associated with
investment in additional capacity in CHL and in our retail network to cope with
the SSIA workload. We would expect this to moderate over the full year. Credit
quality remains excellent and the increase in the impairment provisions for the
half year will be well behind the growth in the loan book.


Pre-tax banking operating profit growth for the first half is expected to be in
the high teens percent.


Life Business

We expect to see growth in new business earnings of almost 25% for the first six
months on foot of the strong sales performance. The sales out-performance is
principally in investments and pensions and as a result the new business margin
on life sales (ex-ILIM) is expected to be marginally below our guidance of 20%.
The exceptional level of inflows into ILIM in the first half includes a number
of very large ticket mandates which produce a lower overall margin mix for that
business in the period.


The existing book of in-force life business is expected to deliver strong
earnings growth in the first half. This reflects both the unwind of the value of
in-force - a higher opening value at a higher risk discount rate - and
assumption changes reflecting positive operational experience.


Pre-tax life operating profit* growth for the first half is expected to be in
the region of 35%.


With investment returns year to date exceeding embedded value assumptions the
investment impact ("short term investment fluctuations") was, as of mid-June,
running at circa Euro40m positive. Medium term interest rates are currently ahead
of the start of the year and this will feed into a higher risk discount rate at
the half year. The resultant economic assumptions impact is currently estimated
to be circa Euro30m negative but is sensitive to movements in the yield curve.


* Embedded value basis



Associated Business


Allianz (Ireland), which carries on non-life insurance and in which the group
has a 30% interest, is expected to deliver first half earnings broadly in line
with the prior year, reflecting a lower underwriting result compensated by the
investment gain arising on the disposal of its head office premises.


Outlook


With a very strong first six months, 2007 promises to be an excellent year for
the group. We expect the momentum in our life business to carry into the second
half, albeit without the benefit of SSIA maturities, and for our banking
business to continue to make good progress with overall loan book growth in the
mid to high teens.


Our expectation is for high teens growth for the year in pre-tax operating
profit from our core life and banking business, up from previous guidance of low
to mid-teens growth.


The 2007 interim results announcement will take place on Wednesday 29th August
2007.


Analyst Conference Call


Denis Casey, Group Chief Executive and Peter Fitzpatrick, Group Finance
Director, will host a conference call for analysts at 14.30 BST on Thursday 21
June.


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 0485
               UK participant number           (0) 20 7138 0832
               US participant number           718 354 1153
               Other participants              +353 1 655 0485


Replay Facility

An instant replay of the conference call will be available two hours after the
call. This service will be available until 29 June. 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        2524133#



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 6788330



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

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