Capital Assessment by Central Bank
September 10 2010 - 11:00AM
UK Regulatory
TIDMIPM
RNS Number : 5223S
Irish Life & Permanent Grp HldgsPLC
10 September 2010
Statement by Irish Life & Permanent Group Holdings plc.
Murphy welcomes "positive" review of Group's Capital Requirements by Central
Bank
Friday 10th September 2010. Kevin Murphy, Group Chief Executive of Irish Life &
Permanent Group Holdings plc, has welcomed the results of Prudential Capital
Assessment Review [PCAR] at permanent tsb bank by the Central Bank and the
application of the CEBS [Committee of European Banking Supervisors] stress test
to the bank.
Murphy said that the conclusion of the PCAR and CEBS exercises confirms the
robust capital strength of the Group which has avoided any call on the
Government for Capital and which has no exposure to NAMA.
The PCAR review has identified that the bank has sufficient capital to meet its
base case scenario for the next 3 years [2009 - 2012] while it requires EUR145
million in additional capital to meet its stress case scenario for the same
period. Murphy said that the Group would meet that requirement through its own
resources by way of a planned VIF Securitisation and cash flow from other
non-banking subsidiaries.
The application of the CEBS test confirms that the bank exceeds the minimum
Tier 1 Capital Ratio requirement [of 6%] in all scenarios.
Outcome of PCAR Review:
Base Case - Sufficient Capital
The PCAR Review confirms that the bank has sufficient capital to meet the base
case outlined in the review [based on assumed losses of EUR1344 million].
Stress Case - Requirement for EUR145 million in additional Capital [to be raised
from own resources]
Under the Stress Case [based on assumed losses of EUR2215 million], the PCAR
identifies a requirement for additional capital of EUR145 million in 2011. The
Group proposes to do this via the EUR100 million VIF securitisation [already
underway] and from cash flow from other non- banking subsidiaries.
Findings of CEBS test
The Central Bank also applied to the bank the stress test as determined by the
Committee of European Banking Supervisors (CEBS) in July 2010. The results of
this exercise demonstrate the bank meets the stress requirement of a 6% Tier 1
target capital ratio.
Results of CEBS test:
+----------------+---------------+--------------+--------------------+
| Scenario | Benchmark | Adverse | Adverse + |
| | | | Sovereign Stock |
+----------------+---------------+--------------+--------------------+
| Tier 1 Ratio | 9.9% | 8.9% | 7.6% |
| permanent tsb | | | |
| bank | | | |
+----------------+---------------+--------------+--------------------+
The results of the CEBS test do not include the capital requirements of EUR145m
resulting from the PCAR. Including this additional capital will increase the
above ratios by circa 1.3%.
Separation of bank and life company:
The Group also confirmed that if the bank and the life company are separated as
has been proposed as part of its current offer for the EBS, the Group estimates
that EUR925 million of capital would be needed to recapitalise the bank [permanent
tsb] on a stand alone basis. The Group envisages that this would be funded from
internal resources, a liability buy back programme and an external capital
raising exercise.
For further information contact:
Barry Walsh, Investor Relations
Ph. +353 1 7042678
Ph. +353 876818157
Ray Gordon, Gordon MRM
Ph: +353 1 6650452
Ph: +353 872417373
This information is provided by RNS
The company news service from the London Stock Exchange
END
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