IL&P open to selling embattled banking arm
Published 03/03/2011 | 05:00
book, could be sold as part of that process.
That €6.5bn reduction in loans, coupled with the €800m to €900m in loan repayments IL&P generates every year, would put the lender close to the target 120pc.
"The big debate is how quickly you have to deleverage," Mr Murphy said.
"There are two extremes being discussed: the fire sale where you would have to take a capital hit; and taking the loans off balance sheet into some kind of warehouse.
"It's not clear what sort of solution is going to be proposed."
Fire sales would see IL&P forced to stump up more capital for Permanent TSB, while another round of stress tests at the end of March could also see Permanent TSB's capital needs rise.
IL&P chiefs yesterday stressed that the group had surplus capital of €417m.
"We wouldn't expect to have to take any state capital," group finance director David McCarthy told a conference call.
The losses for 2010 came as Permanent TSB's impairment charges surged to €420m and the cost of the government guarantee scheme rose by €80m, triggering a €364m loss.
The loan impairments, which were triggered by a deterioration in property prices, were €100m ahead of guidance given earlier in the year but were flagged in a statement issued last week.
Irish Life's core life insurance business enjoyed a 57pc rise in operating profits to €160m, as the number of policy lapses came in below expectation.