Irish Life & Permanent has reported a pre-tax loss of €349m for the first half of this year, mainly due to loan losses at its Permanent TSB banking business.
IL&P has effectively been nationalised after the State injected capital to enable it to reach financial targets set by the Central Bank. It is in the process of preparing a sale of its Irish Life business to raise more capital.
Chief executive Kevin Murphy said that the group's businesses were hit by continuing difficulties in the broader economy including rising unemployment levels, reduced disposable income and weak consumer confidence.
Permanent TSB set aside €333m to cope with potential loan losses in the period, more than double the same period last year. This came as the percentage of its Irish mortgages in arrears for more than 90 days climbed from 6.8% to 8.8%.
Apart from loan loss charges, PTSB also made a €54m loss, blamed on the higher cost of the Government guarantee scheme, while IL&P's life assurance and fund management operations recorded a €4m loss, compared with a €92m profit a year earlier.
The pre-tax loss figure do not include a once-off gain of €763m from a buy-back of subordinated debt.
IL&P said sales at its life and fund management business rose 4% to €286m in the period, but the impact of the pension levy and tough conditions in the financial markets and economy led to the €4m loss. IL&P has paid €100m linked to the levy to Revenue.
PTSB is reliant on the ECB and Central Bank for funding, and had received €14.7 billion from the central banks by the end of June.
IL&P said new lending activity in PTSB was 'very subdued', with outstanding loans falling by 4% from a year earlier.
IL&P shares closed down 3.2% (€0.001) at 3 cents a share in trading today.
