IPM Irish Life&P.Gp

 

TIDMIPM 
 
RNS Number : 2707N 
Irish Life & Permanent PLC 
13 February 2009 
 

Statement by Irish Life & Permanent plc. 
 
 
 
 
Friday 13th February 2009.  The Board of Irish Life & Permanent plc met last 
evening to discuss transactions which took place during 2008 between companies 
in the Group and Anglo Irish Bank. 
 
 
It was noted that the Financial Regulator had communicated to the Non Executive 
Directors of the Board in person last May that it was a policy objective of both 
the Central Bank and the Financial Regulator that Irish financial institutions 
would work to support each other in the face of an unprecedented threat to the 
stability of the Irish financial system arising from the international credit 
crisis. 
 
 
However, the Board has expressed its strong disapproval of and disappointment 
with some of the specific measures used to support Anglo Irish Bank during 2008 
and the fact that the Board itself was not informed of the specific manner in 
which such support had been afforded to Anglo Irish Bank. 
 
 
The Board accepted with sadness the resignation of Group Finance Director, Peter 
Fitzpatrick, who was the longest serving Director.  The Board wishes to 
acknowledge that throughout his career with the Group, Mr. Fitzpatrick had 
always acted with the utmost integrity and professionalism. Furthermore the 
Board acknowledged that in respect of this matter, the only motivation was to 
provide support for the broader financial services sector in accordance with his 
understanding of the expressed wish of the Financial Regulator and the Central 
Bank. 
 
 
The Board also accepted with regret the resignation of the Head of Group 
Treasury, David Gantly. The Board acknowledged the extremely high level of 
integrity and professionalism shown by Mr. Gantly throughout his service with 
the company and fully accepts and recognises that he too had acted in line with 
his genuine understanding of the express wishes of the Regulatory Authorities in 
attempting to provide support for the wider financial sector in Ireland at a 
critical time in the economic life of the country and its financial system. 
 
 
The Board declined an offer of resignation by Group Chief Executive Denis Casey. 
 
 
David McCarthy, Chief Financial Officer, has been appointed by the Board as 
Group Finance Director to replace Peter Fitzpatrick - subject to regulatory 
approval. 
 
 
The Chairman of the Board, Gillian Bowler, said that while it was clear that the 
only motivation of the individuals concerned was to support the policy objective 
of the Financial Regulator and the Central Bank, the manner in which specific 
support was advanced to Anglo Irish Bank during 2008 had been wrong; "I have 
absolutely no doubt about the integrity of the individuals concerned. However in 
providing support to the broader financial infrastructure, mistakes were made - 
for which I and the Board apologise unreservedly." 
 
 
The Chairman also confirmed that the Board has initiated a full review of its 
processes and procedures to ensure that these events can not arise again. 
 
 
Additional Financial Information: 
 
 
In the interests of clarity, Irish Life & Permanent plc (IL&P) is making 
disclosure of the nature and extent of the Group's dealings with Anglo Irish 
Bank (Anglo) across each institution's reporting dates.We emphasise again that 
each of these transactions was properly accounted for in the Group's [Irish Life 
& Permanent plc] books and records and were fully disclosed in our regular 
reports and returns to the Financial Regulator. 
 
 
Deposits lodged with Anglo Irish Bank: 
 
 
On 31st March 2008, at the request of Anglo, IL&P, through its subsidiary Irish 
Life Assurance (ILA), deposited EUR750 million overnight on receipt of EUR1 billion 
cash into Permanent TSB which was offered as collateral in respect of the 
deposit. 
 
 
During September, at the request of Anglo, IL&P, through its subsidiary ILA, 
deposited a total of EUR3.45 billion with Anglo in 5 separate deposits [on dates 
from 26th September to the 29th September] accepting EUR3.45 billion of cash into 
Permanent TSB which was offered as collateral in respect of these deposits. 
 
 
These transactions matured on the 2nd and 3rd October. 
 
 
On the 29th September, IL&P was contacted by Anglo on three separate occasions 
requesting further advances which were declined as further collateral was 
unavailable from Anglo to support such deposits. 
 
 
On 30th September, following the introduction of the Government Guarantee 
Scheme, and again at the request of Anglo, IL&P, through its subsidiary ILA, 
agreed to place a total of EUR4 billion on deposit overnight with Anglo on receipt 
of EUR4 billion into Permanent TSB which was offered as collateral in respect of 
these deposits. This transaction occurred in four tranches. 
 
 
These transactions matured on the 1st October. 
 
 
IL&P plc: 
 
 
As part of IL&Ps ongoing wholesale funding programme, the bank enters into 
normal secured interbank transactions of short term duration with a number of 
participants including the ECB. In accordance with market norms, these involve 
the pledging of eligible mortgage assets in exchange for cash with the 
transactions being accounted for as interbank deposits. 
 
 
At 30th June 2008 IL&P had outstanding EUR7.73 billion of such transactions. 
Anglo's participation in these transactions amounted to EUR3.33 billion. 
 
 
These transactions were correctly accounted for as interbank deposits in the 
interim accounts of IL&P. 
 
 
There were no material collateralised transactions with Anglo at 31st December 
2008. 
 
 
 
 
 
 
 
 
Contacts: 
 
 
Barry Walsh 
Head of Investor Relations 
Ph: 01 7042678 
 
 
 
 
Ray Gordon 
MKC Communications 
Ph: 01 6788330 [office] 
Ph: 087 2417373 [mobile] 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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