28 Feb 2012 17:30
Irish Life & Permanent Group Holdings plc
28 February 2012
Update on Impairment Provisions
At its meeting today, the Board of Irish Life & Permanent Group Holdings plc considered the amount of loan impairment provisions to be made by its banking business, permanent tsb, in respect of 2011. The provisions are now expected to be approximately €1.4 billion (€2010: €420m) for the year, with almost all of the expected increase attributable to the Irish residential mortgage loan book, due to the following:
§ a change in the assumption for the peak to trough decline in house prices to 55%, from 43% at the end of 2010,
§ the move to provisioning for all cases over 90 days in arrears (from over 180 days) in line with revised Central Bank guidance, and
§ a significant increase in the number of permanent tsb mortgage loan accounts greater than 90 days in arrears at the end of December 2011 at 11.5% of total cases (Dec 2010: 6.8%). This compares with total industry arrears of 9.2% at December 2011.
The Tier 1 capital of permanent tsb at 31 December 2011 was 18.3%, reflecting the expected full year's results, including the increased level of provisioning as well as the gain of €1billion from the liability management exercise which was completed in the third quarter of 2011.
Full details will be available on the publication of the Group's Annual Report & Financial Statements scheduled for early April 2012.
Contact details
Barry Walsh, Head of Investor Relations
Tel: +353 1 704 2678
Orla Brannigan, Investor Relations
Tel: +353 1 704 1345
Ray Gordon, Gordon MRM
Tel: +353 1 665 0450