IRISH LIFE & Permanent's disclosure to the stock market that it invested €95.6 million in three Icelandic banks that have been seized by the Nordic state failed to ease investor concerns as its share price fell 3 per cent adding to three days of dramatic declines.

IL&P had said last Thursday that it would not outline the full scale of its exposure to debt issued by the three Icelandic banks until it released a trading statement to the stock market on November 12th.

However, IL&P decided to issue a statement disclosing the full extent of the exposure after the company's share price fell almost 30 per cent on Monday, adding to a similar fall last Friday and a 12.6 per cent drop on Thursday.

The company said that the carrying value of its investments with the three Icelandic banks - Landsbanki, Kaupthing and Glitnir - was €74 million and that it had already written down €16.7 million on the value of the investments last June.

"The recovery, if any, of these debts due will be dependent upon action taken by the Icelandic government," said the company.

IL&P said that in the absence of any such action, it anticipated that it would "create impairment provisions to cover substantially all the outstanding debt".

Sebastian Orsi, analyst at stockbroking firm Merrion Capital, said that the exposure was "surprising" given the size of IL&P's capital base and that it would affect the company's earnings and value.

The company's share price climbed as high as 44 per cent after the statement was issued before falling back later in trading.

The company's share price has fallen 60 per cent on its opening price last Thursday, the day it first revealed its exposure to the Icelandic banks in response to a media query.

IL&P's closing share price of €1.47 yesterday values the company at €406 million.

A spokesman for the company said it had decided to reveal the extent of its Icelandic debt exposure earlier than intended to "put the issue to bed" as the market had been "distracted" by the issue.

However, he said other concerns were affecting banking stocks generally.

He said share sales by holders who needed to liquidate stocks and the absence of buyers in financial stocks had also driven bank share prices lower.

The company said it had "a strong and flexible capital position" and "can absorb any impairment which may arise as a result of its exposure to these Icelandic banks without placing the group under any capital strain".

The spokesman said the company had originally invested €92 million in Icelandic bank debt, which has since risen to €95.6 million due to currency movements.

The company said these investments were written down by €16.7 million on June 30th in a "negative mark-to-market adjustment".

In a separate development, debt rating agency Moody's changed its long-term deposit rating on Bank of Ireland subsidiary ICS Building Society to "negative" in line with the agency's recently downgraded outlook for the bank.

Leeds Building Society, the last non-Irish lender to offer tracker mortgage products in the Republic, withdrew them last Friday due to the high cost of bank funding in the turbulent wholesale money markets.