IRISH LIFE AND PERMANENT:IRISH LIFE & Permanent (IL&P) has said that it can raise about €100 million to meet the capital requirements set under the EU-IMF plan and continue to avoid a Government bailout .
The Central Bank believes the group needs a further €98 million over and above the €145 million target set in September to bring its capital ratio up to international norms. The company has said it raised €100 million selling on some of its investments book to investors in a securitisation deal and that it will raise the remaining capital “from its own resources”.
IL&P, the country’s largest mortgage-lender during the property boom, is the only lender to avoid a State bailout as it did not lend to property developers and has relied on its well-capitalised, profitable life business.
Chief executive Kevin Murphy said the further recapitalising of the banks would “reassure international investors as to the ability of the Irish banks to withstand the impact of the current recession”.
The company is confident it can proceed with a bid to take over the State-owned Educational Building Society (EBS) though the new capital targets may delay the sale.
EBS has to find a further €438 million on top of €525 million it must raise under an earlier target.
The additional capital requirements may complicate the sale of EBS. Irish Life & Permanent is competing with a private equity consortium led by Irish firm Cardinal Capital Group, and backed by US group Carlyle and American investor Wilbur Ross.
EBS has until the end of February to raise its capital levels, while ILP has a deadline of the end of May.
Irish Life & Permanent had planned to raise €925 million, mostly by selling new shares, to recapitalise and offload its banking division, Permanent TSB, in a merger with EBS.
Given the volatility in the markets, this plan has been shelved and the company is looking at acquiring EBS directly and giving the Government a potential share in the company in return for the State recapitalising the society.
The company is trying to reduce the size of its business by selling on up to €2.5 billion in UK loans to investors in securitisations deals.
