IRISH Life & Permanent chairman Alan Cook yesterday insisted embattled Permanent TSB has the capacity to become a "successful and profitable" bank that provides a "competitive alternative" to AIB and Bank of Ireland.
The upbeat comments came as Permanent TSB reported after-tax losses of €424m for 2011, in a year when a 70pc rise in mortgage arrears and plunging property prices pushed loan-loss charges to a record €1.4bn.
The Government has openly spoken of potentially merging Permanent TSB or selling it.
Mr Cook yesterday said the bank's €4bn bailout "provided it with the foundation from which to build a successful and profitable business, providing a competitive alternative to the two main pillar banks".
But he stressed that the board "deeply regrets" the fact that shareholders had lost virtually all of their investments, after the State became a 99.8pc owner of IL&P last summer.
The group's crown jewel, Irish Life Assurance, will be formally sold to the State for €1.3bn later this month as a result of a High Court order last week.
Yesterday's results announcement also revealed that Mr Cook had received a special derogation from the Central Bank to chair both the life and insurance company until the end of 2012.
Mr Cook said overseeing both companies would "facilitate a smooth transition to standalone businesses". The Central Bank declined to comment.
IL&P chief executive Kevin Murphy will become chief executive of Irish Life Assurance, while new hire Jeremy Masding will lead the old IL&P group and the new Permanent TSB.
The €1.4bn impairment hit -- which was more than three times 2010's tally but had been signalled earlier in the year -- was the standout figure from yesterday's results.
It was largely taken as the bank suffered a 71pc rise in the number of homeloans that were more than 90 days overdue. Some 12pc of the bank's total €25.4bn mortgage book is now in arrears. Almost €1.2bn of impairment charges were made on the homeloans portfolio last year.
The results also reveal that IL&P advanced just €400m of new lending last year -- down about 33pc on 2010 -- while the bank forked out €173m (up €76m year-on-year) for the government guarantee scheme.
Both the depressed new lending and the guarantee costs helped push the bank to a €65m pre-impairment loss against a €51m pre-impairment profit a year earlier. The after-tax result loss came in at €424m as the impact of the €1.4bn loan impairments was partially offset by a €1bn gain from buying back junior debt at a discount.
Irish Life, which was treated as a 'discontinued operation' in yesterday's results, suffered a 2.4pc fall in sales based on the industry benchmark of annual premium equivalent.