IL&P set to raise €26m from sale of Euro subsidiary
IRISH Life & Permanent is set to raise €26m from the sale of its European subsidiary, Irish Life International, it emerged yesterday.
In a brief statement, the plc said it had agreed to sell Irish Life International (dubbed ILI) to Swedish life insurance company SEB Group.
ILI sells life assurance and investment products across nine European territories including Belgium, the UK, France, Italy and Sweden.
The company attracted premium income of €370m in 2010 and had assets under management of €2bn, Irish Life & Permanent (IL&P) said yesterday.
The most recent audited accounts show after-tax profits of €1.1m for 2009 -- updated figures are expected to be given at IL&P's full-year results briefing next Wednesday.
In a statement, IL&P said the sale of ILI was "consistent with" the group's "strategic focus on the Irish market". "The proceeds of ILI will be available to contribute to the regulatory capital of Irish Life & Permanent plc," the statement added.
IL&P has been given until the end of May to boost its regulatory capital by €243m, a target the plc says it can hit without-state cash.
The target may be raised higher by another round of stress tests at the end of March.
The ILI sale is subject to various regulatory approvals, including the sign off of the Central Bank of Ireland and IL&P gave no guidance on when the deal may be completed.
The plc took the sting out of the figures by pre-announcing that its Permanent TSB bank was upping bad debt provisions by "between €80m and €100m" as a result of the faltering property market.
Analysts will pay close attention to any comments IL&P makes about the level of strain in the €27bn mortgage book, which includes about €17bn of expensive trackers.
Results for the life company, which is by far the biggest of IL&P's two core businesses, will also be announced.
Many are expecting lacklustre new business figures there, since IL&P's two biggest competitors, Zurich and Bank of Ireland (Life)/New Ireland, both grew their market shares in 2010.
IL&P's funding profile and the state of its deposit book will attract much attention as well, as will any update on the group's long-running battle to buy EBS.