Irish Life & Permanent has reported a worse than expected first-half operating loss but said it expected mortgage arrears to peak towards the end of the year.
IL&P's banking arm, Permanent TSB, has weighed down the group and its increased impairment charges and funding costs helped trigger an operating loss of €51m in the first half.
Finance Director David McCarthy said the full-year operating loss would come in between €50-€100m depending on the timing of impairment charges and funding costs.
'Given the extreme stress that we have just come through, given the extreme stress that we are seeing in the economy at the moment that is not a bad outcome,' he said.
Irish Life's loss compares with a €300m operating profit a year ago and a forecast loss of €39m, according to an average of three analysts surveyed by Reuters.
Its shares closed up nearly 9% yesterday in anticipation of good interim numbers.
The group, one of Ireland's biggest mortgage providers, raised its expected loan loss rate for 2009-2011 to 1.7-1.8% of loans from 1.6% after changing its estimate for unemployment to peak next year at 16% rather than 14%.
Ireland is expected to be the worst performing economy in the industrialised world this year and eight economists polled by Reuters have forecast unemployment will hit 15.5% by the end of 2010, according to the median estimate.
Mr McCarthy said Irish Life & Permanent expected Irish arrears to peak towards the end of this year as unemployed borrowers work through their difficulties.
