BANKING AND pensions group Irish Life & Permanent (IL&P) could bid for ICS Building Society when Bank of Ireland puts it up for sale later this year.

ICS, which has a €7 billion mortgage book, is one of a number of businesses that the EU has ordered Bank of Ireland to sell so it can qualify for the Government’s bailout of Irish banks without breaking State aid rules.

The list also includes Bank of Ireland Asset Management and life and pensions business New Ireland, for which IL&P also wants to bid.

Speaking after IL&P’s agm in Dublin yesterday, chief executive Kevin Murphy, said it would also be interested in bidding for the ICS business.

The building society has to sell at least €2 billion of its €7 billion mortgage book. Mr Murphy confirmed that Irish Life would take the minimum figure. While IL&P has already confirmed it is interested in bidding for New Ireland, it has not said it is also considering a bid for the ICS business, or whatever portion of it is sold.

Given the weakness of the Irish mortgage market, most analysts believed ICS was the least attractive of the Bank of Ireland assets likely to be sold. However, the society also has €4 billion in deposits.

Mr Murphy predicted that there were unlikely to be any developments on the sale of New Ireland or ICS until the autumn, as the EU is working through restructuring plans presented by the five institutions which the State is bailing out through its asset management agency.

IL&P is not part of that process as it was not involved in commercial property lending, which is the focus of the bailout process. In a statement issued before its agm, the company said the various restructuring proposals could present it with opportunities. The group is also considering the future of its banking arm, Permanent TSB, the Republic’s biggest mortgage lender.

Permanent TSB is likely to form part of a proposed “third force” in the banking market, along with EBS and Irish Nationwide, both of which are being bailed out by the State at a total cost of €3.7 billion.

IL&P would remain as a majority shareholder in the new entity. Mr Murphy said plans are ongoing in relation to this.

During the meeting, the group’s chairwoman, Gillian Bowler, rejected suggestions from shareholders that the group is seeking to offload the bank altogether as its losses are acting as a drag on the otherwise profitable life and pensions business.

The group said there are signs that the number of people who are falling behind with their mortgage payments may have peaked.

Its statement said that the number of customers with arrears of more than 90 days continued to grow this year, but more recently, the number of those with arrears of less than 90 days have levelled off, indicating it had reached its peak.

IL&P also said that based on early talks with the Financial Regulator, its capital resources should be enough to meet new rules the industry watchdog set earlier this year.

Mr Murphy indicated that it may decided to raise money should the group split its banking and life businesses.