Trading Statement
June 23 2004 - 8:00AM
UK Regulatory
RNS Number:0491A
Irish Life & Permanent PLC
23 June 2004
Irish Life & Permanent plc
Pre-close Trading Statement - Interim 2004
Issued: 12.00 June 23rd 2004
Irish Life & Permanent plc issued the following trading statement ahead of its
closed period for the half-year to June 30th 2004.
Overview
The key economic drivers of the business continue to be positive and the first
six months of 2004 is expected to show a combination of strong volume growth,
tighter margins and effective cost management which taken together should
deliver earnings growth in line with market expectations.
Sales
Banking Business
Gross new lending for the group for the first six months is expected to be
strongly ahead - up over 40% - on the first half of 2003. New residential
mortgage lending in Ireland continues to be particularly buoyant with expected
gross new lending in Ireland of circa Eur2.2bn. Capital Home Loans, the group's
UK mortgage lending operation, also experienced exceptional new residential
mortgage lending growth in the period. Consumer finance lending is expected to
show double digit growth.
Overall the loan book is expected to grow by over 20% on an annualised basis to
circa Eur19bn at the half-year.
Life Business
Life sales in Ireland (excluding investment sales by ILIM) for the first six
months are expected to increase by between 18 to 20% with a strong pipeline
going into the second half. Retail Life division sales are up strongly - high
twenties percent - on the first half of 2003 when trading conditions were
particularly difficult. The pick-up in pension and single premium investment
sales seen in the second half of 2003 has continued into 2004. Corporate Life
division sales are expected to increase by circa 8% in the period.
ILIM, the group's fund management business, is enjoying strong inflows on the
strength of its excellent fund performance and (on balance sheet) sales growth
of over 60% is expected for the first six months of 2004.
Earnings
Banking Business
Net interest income is expected to grow by circa 5% in the first six months with
tighter net interest margins partially offsetting the strong growth in lending
assets. The margin for the first half is expected to be circa 142/143 basis
points - down from 163 for the full year in 2003 - reflecting the impact of the
last ECB rate reduction, the rapid growth in residential mortgages and the
increased wholesale funding requirement.
Maintaining the strong focus on cost management the total bank costs are being
held below 2003 levels in line with our targets for cost reduction.
In 2003 the bank realised a once-off gain of Eur26m on the disposal of hedge
securities. Excluding this item the pre-tax contribution from banking and other
activities in the first half of 2004 is satisfactory.
Life Business
Strong new business volumes in the life business have been achieved in a
competitive market environment that has seen sharp reductions in the rates for
protection business as well as the anticipated tightening of margins on pension
business.
The total group new business contribution for the period is expected to increase
by circa 24% on the first half of 2003. The contribution from new life business
in Ireland is expected to be circa 20% ahead. As a consequence of the reduction
in protection rates the expected new life business margin outcome for the first
half, while ahead of the first six months of 2003, will be slightly behind the
target margin. An improvement in the margin is anticipated in the second half
with a continued pick-up in Retail sales volumes.
As with the banking business tight cost control will deliver operating costs
across the life business below 2003 levels.
The contribution from the existing book of life business is in line with
expectations.
Associated Business
Allianz -Irish Life, which carries on non-life insurance and in which the group
has a 30% interest, is expected to have a strong performance in the first six
months.
Outlook
A strong economy and, in particular, a buoyant labour market provide a positive
backdrop for both banking and life businesses, supporting good demand and volume
growth. The worst of the margin compression in the banking business would appear
to be over as euro interest rates are now more likely to rise than fall. On the
life side, we are confident that, going forward, scale and strong cost
management will offset any margin pressures.
We are satisfied with the progress being made in 2004 and, on the basis of the
first six months, are on course to meet targeted earnings for the 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 2004 interim
results announcement will take place on Wednesday 1st September 2004.
Pre-close Trading Statement - 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 Wednesday 23 June.
To join the conference call, please dial in to the number below 5 minutes before
and ask for the Irish Life & Permanent Call
+353 1 439 0433
The conference call will also be available via the LIVE service on
Bloomberg.
Replay Facility
A recording of this conference call will be available from 17.00 BST on 23 June.
This service will be available until 30 June. The telephone number and access
code are:
Tel: +353 1 240 0041 Access code: 372596#
Contact details:
David McCarthy, Group Chief Financial Officer
Tel: +353 1 856 3050
Barry Walsh, Head of Investor Relations
Tel: +353 1 704 2678
Orla Brannigan, Investor Relations
Tel: +353 1 704 1345
Ray Gordon, MRPA Consultants
Tel: +353 1 6788099
This information is provided by RNS
The company news service from the London Stock Exchange
EN
TSTFGGZVGFZGDZM
Irish Life&P.Gp (LSE:IPM)
Historical Stock Chart
From May 2024 to Jun 2024
Irish Life&P.Gp (LSE:IPM)
Historical Stock Chart
From Jun 2023 to Jun 2024
