Irish Life and Permanent has warned that its bad debt charges for 2010 are expected to increase by between €80-100m compared to its previous estimates due to the further deterioration in the economy.
In a trading update, the lender said that consensus expectations are now for a delayed recovery in Ireland with modest economic growth in 2011.
The news sent IL&P shares down 4.2% to close at 90 cent in Dublin.
It said the lower economic predictions, the external financial support from the EU/IMF and the December Budget were reflected in reductions in end-of-year property valuations.
'We have accordingly reviewed our provisioning assumptions for the peak to trough fall in residential property prices and for commercial property valuations,' today's statement said.
The group also confirmed its intention to proceed with its results announcement on March 2 ahead of the completion of the Central Bank's financial requirements reviews. These reviews are not due to be completed until the end of March.
