Irish Life & Permanent has signalled that it is on course to deliver double-digit earnings growth this year on foot of a strong performance at its life and banking businesses.

In a trading statement issued yesterday, the group said new bank lending continues to be robust with margins expected to be within its target range. New business at the group's life assurance operation has shown good growth with margins running significantly ahead of the previous year, according to the statement.

The group is expected to deliver earnings per share of between €1.14 and €1.21 on pre-tax profits of up to €402 million. The upbeat statement was well received and Irish Life & Permanent shares gained 34 cent to close at €14.44 in Dublin.

It pointed to a strong economy and in particular a buoyant labour market as providing a positive backdrop for its banking and life businesses supporting good demand and volume targets. "We are very satisfied with the progress made year to date and are on course to meet our targets for the full year" it stated.

Gross new lending in the first half of 2005 is expected to show low double-digit growth with the total loan book growth exceeding 20 per cent year on year which is slightly behind expectations.

New residential mortgages are driving this growth with gross new lending at about €2.5 billion in the six months to the end of June. Merrion Stockbrokers had expected it would achieve gross new residential lending of €3.2 billion but said the better than expected performance of its UK mortgage company Capital Home Loan provided some compensation.

It is enjoying good loan growth and is expected to post a 10 per cent rise in new lending. Its bank, Permanent TSB, expects to have opened about 34,000 new current accounts in the first six months and expects to record a high teens growth year on year.

Life sales will show low-teens growth with its retail division said to be performing particularly strongly over the half year period. Growth in pensions and savings products have been excellent. The corporate life division will record modest sales growth but has a strong new business pipeline in the second half, it said.

Irish Life Investment Managers is on course to show a €700 million inflow of institutional funds to the end of June.