Strong growth in pensions and life assurance sales has boosted profits at Irish Life & Permanent by 13 per cent to €286.6 million (£255.7 million) in the 12 months to the end of December 2000.

The banking and assurance group, which recently purchased TSB Bank from the Government, is upbeat about its prospects in 2001 and is confident that its newest acquisition will make a strong contribution to the group. Its life assurance business in the US, though, had another disappointing year and is likely to be sold.

Chief executive, Mr David Went, said the group was now ahead of its target to double sales within three years following the merger of Irish Life and Irish Permanent in 1999.

The outturn, which was broadly in line with expectations, was well received in the Irish Stock Market with the shares gaining 21 cents to €13.40. On the back of this performance, shareholders will be paid a final dividend of 27.9 cents per share bringing the total dividend for 2000 to 39 cents a share, an increase of 11 per cent.

Life assurance contributed 76 per cent or €216.7 million of group profits last year, an increase of 22 per cent on 1999. This was due to a 38 per cent rise in the sale of life and pensions products across the Irish Life & Permanent group. Banking profits from Irish Permanent were up by 9 per cent to €67.5 million with the bank continuing to be affected by tighter profit margins on mortgages and deposit accounts.

The group has benefited from continuing strong growth in the Irish economy with 90 per cent of its profits generated here. Profits from the US life assurance operations were down from €23.4 million to just €2 million last year with the group struggling to retain policyholders in a very difficult market. In the UK life assurance operation, profits were also lower, down from €17.4 million to €16.6 million.

At Irish Permanent, there was further growth in residential mortgages. In 2000, the total amount lent to house buyers was €1.9 billion, underpinned by continuing strong demand for mortgages from first time buyers.

Commercial lending rose by 12 per cent to €346 million with consumer finance, principally its car finance operations, achieving 35 per cent growth to €479 million last year.

Lending in the UK market was reduced though, down 18 per cent to €475 million.

Provisions for bad debts increased by 25 per cent to €40.9 million.