Irish Life & Permanent (IL&P)expects its loan book to grow by double digits this year despite the slowdown in the mortgage market, shareholders were told at the group's annual general meeting yesterday.
Chairwoman Gillian Bowler said the loan book was expected to grow by mid to high-teens in percentage terms in 2007, but that the growth would depend on a fast resolution to the "complete uncertainty" about stamp duty.
"In our view, a speedy end to the uncertainty over stamp duty, which we will probably get after next week's election, will see a recovery in new mortgage lending. The underlying demand is there."
Mortgage credit quality remains "absolutely excellent" with no evidence of any increase in arrears, she added. "The quality of the loan book on mortgages has improved, which is surprising given interest rates are rising," she said
Ms Bowler's comments were reiterated by David Went, who yesterday stepped down as IL&P chief executive after 10 years.
Mr Went, who is chairman of The Irish Times Ltd, said the slowdown in the housing market should not be overplayed. "We've been driving along at 100 miles per hour and now we're doing 80. The brakes are on, but we're still doing 80."
Ms Bowler paid tribute to Mr Went, saying he had brought enormous confidence and character to the business, critical leadership and a strong focus on customer service.
He will be succeeded as group chief executive by Denis Casey, who officially takes on the role on Monday.
The company is anticipating low to mid-teen growth in overall pre-tax operating profit for its core businesses in 2007.
Following the agm, IL&P's share price rose more than 3 per cent on the Irish Stock Exchange yesterday, closing up 63 cent at €20.05.
Ms Bowler told shareholders that Irish Life would "of course" look at buying the Irish Nationwide Building Society, which is looking for buyers, but she said making a bid was a question of if rather than when.
"There are some parts of their business that don't fit with our own," Ms Bowler said. "Part of the frustration is that we need Irish Nationwide to push a button that says 'go' before we can look at the books."
She said there were no bids on the table or expressions of interest for Irish Life, adding that it was a mistake for firms to be distracted by M&A speculation.
