IPM Irish Life&P.Gp

RNS Number:4869G
Irish Life & Permanent PLC
16 December 2004



                        Irish Life & Permanent plc

                      Pre-close Trading Statement for 2004

                                                   Issued: 12.00PM Dec 16th 2004


Irish Life & Permanent plc issued the following trading statement ahead of its
closed period for the year to Dec 31st 2004.


Overview

The economic environment in which the group is operating continues to be
positive and supportive of our main businesses and the group is performing well.
New business volumes in both our life assurance and banking business are up
strongly on 2003 and the full year's earnings outcome is anticipated to be in
line with market expectations.


Sales

Banking Business

Gross new lending for the group for the year is expected to be over 30% ahead of
the prior year. New residential mortgage lending in Ireland continues to be
particularly buoyant with expected gross new lending of just under Euro5 billion
for the year. Capital Home Loans, the group's UK mortgage company, also
experienced exceptional lending growth in the year, with new lending expected to
be up in excess of 40% in local currency. Other lending, taken together, is
expected to show double digit growth.

The overall lending book will exceed Euro20 billion at the year reflecting growth
of over 20% in loan balances.


Life Business

Life sales in Ireland (excluding investment sales by ILIM) are expected to show
mid-teens growth for the year. In the Retail Life division pension sales are
expected to increase by about a third on 2003 and both savings and protection
business should show good growth. Continued weak retail investor confidence in
equity markets will result in investment bond sales being behind the prior year.
The Corporate Life division recorded good sales growth throughout the year
reflecting both strong employment and earnings growth.

ILIM, the group's fund management business, generated total institutional
inflows of over Euro1.5 billion - up circa 20% - on the strength of its excellent
investment fund performance. For 2004 the bulk of these inflows comprised
on-balance sheet sales in contrast to the prior year when the sales mix was
predominantly segregated or off-balance sheet. ILIM's on-balance sheet sales for
2004 are consequently up over 150% on the prior year.


Earnings

Banking Business

Net interest income is expected to grow by over 5% for the year with tighter net
interest margins partially offsetting the strong growth in lending assets. The
margin for the full year is expected to be in line with previous guidance, at
circa 140 basis points. This is down from 163 basis points for the full year in
2003 reflecting the full impact of the last ECB rate reduction together with the
impact of increased levels of wholesale funding to support the 20% growth in
loan balances.

Having maintained the strong focus on cost management, the total bank costs for
the year are being held below 2003 levels in line with our targets for cost
reduction.

In 2003 the bank realised a once-off gain of Euro26m on the disposal of hedge
securities. Excluding this item, the pre-tax contribution from banking and other
activities for 2004 should show mid-teens growth.

Life Business

The pre-tax contribution from life assurance activities for the year is expected
to show double-digit growth.

This includes an increased contribution from new business, growing in the high
teens, reflecting the strong overall life and investment sales numbers but lower
percentage margins. Life new business margins for the full year are expected to
be broadly in line with the first half margin of 12.8%. A combination of the
increase in the risk discount rate in 2004, higher than expected annuity
reinsurance costs and a slower retail market for investment bonds have held back
margins from the 2003 level of 13.8%.

Continuing tight cost control will ensure that operating costs in the core life
business should not exceed 2003 levels.

The contribution from the existing book of life business will see a continuing
out-performance against our embedded value assumptions.

Associated Business

Allianz (Ireland), which carries on non-life insurance and in which the group
has a 30% interest, is performing well and its contribution for 2004 is expected
to at least match the very strong result achieved in 2003.

Outlook

A strong economy and, in particular, a buoyant labour market provide a positive
backdrop for both our 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 and this will help banking net interest income growth. In our
life business, we will continue to use our scale and strong cost management to
more than offset any margin pressures.


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
preliminary results announcement will take place on Wednesday 2nd March 2005.


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 14.30 GMT on Thurs 16th Dec.

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 GMT on 16th
December. This service will be available until 23 December. The telephone number
and access code are:

Tel: +353 1 240 0041   Access code: 448715#


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

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