Saturday 25 November 2017

Irish Life & Permanent suspends shares

Irish Life and Permanent, Ireland's largest pensions and mortgage provider, has temporarily suspended its shares on the Dublin and London stock exchanges.

The firm requested the move after share prices plummeted amid concerns that the Government will have to take a stake in the institution.

The result of a stress test on banks by the Central Bank is expected on Thursday afternoon.

In a statement to the Stock Exchange, the board of IL&P said the stress tests were not yet completed and the amount of capital that may be required by the group, and the source of that capital, has not been finalised.

"In the light of the significant movements in the share price yesterday (Tuesday), the board has requested the temporary suspension, until Friday April 1, of the company's shares on the Irish and London Stock Exchanges pending the outcome of those exercises," it said.

"The Central Bank expects to announce the results for all the banks involved on Thursday evening, March 31, and a full statement will be issued by the group on foot of that announcement."

Account and policy-holders will not be affected.

The bank has been the only government-guaranteed lender to avoid a bailout so far due to its lack of exposure to commercial property and its life insurance arm.

However it shed 45pc of its share price yesterday after reports the stress test results would push it into Government ownership.

It is rumoured the company will need more than €2bn in capital to cover high mortgage losses at its bank, Permanent TSB.

A spokesman for the Department of Finance would not comment on speculation over IL&P's capital requirements.

However he stressed the firm's Life Insurance businesses were performing well and were profitable.

"Policyholders are entirely unaffected by the decision to temporarily suspend trading in shares," he added.

The Department of Finance said the capital requirements for banks are being set to ensure that they are sustainable, thus safeguarding deposits.

"The actions of the Central Bank and the Government are to ensure the banking system is functioning - meeting the needs of the real economy and ensuring that viable businesses can access credit," he continued.

"The ECB has and continues to provide invaluable support to the Irish banks that safeguards all deposits.

"Deposits covered by the Eligible Liabilities Guarantee continue to be covered."

Meanwhile David Guinane, chief executive of Permanent TSB, said there had been no change to the position of either deposit holders or mortgage account customers as a result of the suspension of shares.

He stressed the position of deposit holders was guaranteed regardless of the result of the Prudential Capital Assessment Review (PCAR) and Prudential Liquidity Assessment Review (PLAR) exercised over the coming days.

"Clearly these are difficult days for the entire banking industry in Ireland but I can absolutely reassure customers, including those customers who have recently joined us from Irish Nationwide, that nothing that may occur over the coming days will in any way change the deposit guarantee that they have enjoyed in recent months or that they would enjoy in any other bank in Ireland," said Mr Guinane.

The bank chief said the objective of the stress test was to ensure Irish banks were strong enough to withstand any conceivable problems in the years ahead.

"It doesn't mean that those circumstances are expected but it does mean that even were they to emerge, the banks will have the strength to get through them," he added.

Press Association

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