2010: RESULTS INTERIM INTERIM RESULTS 2010 Forward looking - - PDF document

▶
2010
SMART_READER_LITE
LIVE PREVIEW

2010: RESULTS INTERIM INTERIM RESULTS 2010 Forward looking - - PDF document

Nov 05, 2022 269 likes •827 views

1 PAGE 2010: RESULTS INTERIM INTERIM RESULTS 2010 Forward looking statement PAGE 2 A number of statements we make in our presentation and in the accompanying slides will not be based on historical fact, but will be forward-looking

slide-1
SLIDE 1

1

PAGE

INTERIM RESULTS 2010

INTERIM RESULTS

2010:

slide-2
SLIDE 2

2

PAGE

INTERIM RESULTS 2010

Forward looking statement

A number of statements we make in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward-looking” statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward looking statements. Factors that could cause actual results to differ materially from those in the forward looking statements include, but are not limited to, global, national and regional economic conditions, levels of market interest rates, credit or other risks of lending and investment activities, competitive and regulatory factors and technology change. Irish Life & Permanent undertakes no obligation to update the forward-looking statements contained in this presentation. Forward-looking statements made in this presentation relate only to events as of the date on which they are made.

slide-3
SLIDE 3

3

PAGE

INTERIM RESULTS 2010

Index

SECTION: PAGE: Business review Review of life business 05 Review of banking business 11 Strategic agenda & Summary 20 Financial Review Group earnings 23 Funding 28 Arrears 29 Loan impairments 32 Capital 34 Outlook 36 Additional information 38

slide-4
SLIDE 4

4

PAGE

INTERIM RESULTS 2010

LIFE PERFORMANCE NORMALISING BANK MANAGING KEY ISSUES RECOVERY UNDERWAY

Business Review

Life* profits recover Bank losses stabilise Overall results -€10m Operating profit 40% Business retention improving Good progress on funding Net interest income stable Provisioning 21%

STRATEGIC OPPORTUNITIES

EBS proposal

* Life & Fund Management

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-5
SLIDE 5

5

PAGE

INTERIM RESULTS 2010

  • Profitability
  • Retention
  • Sales

Life: Normalising the Performance

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-6
SLIDE 6

6

PAGE

INTERIM RESULTS 2010

  • New business
  • Improved margins
  • Increased overall sales volumes
  • In-force
  • Strong risk profits
  • Lower persistency variance

Life: Recovery in Profitability

H1 2010 New business In-force Operating profit €m 28 90 118 ▲% +22 +48 +40

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-7
SLIDE 7

7

PAGE

INTERIM RESULTS 2010

Retail

  • Lapses peaked Q1 2009
  • Significant improvement this year to

date

  • Actions on:
  • Seller / distribution remuneration
  • Product features / flexibility
  • MIS and activity management

Corporate

  • Policy lapses peaked in H2 2009
  • Normalising towards end of 2010

Life: Retention Improving

Retail: Returning to long term lapse assumptions

* forecast

Lapses v LTA Quarter 1 Quarter 2 Quarter 3 Quarter 4 2010 136% 125% 105%* 2009 192% 159% 139% 147%

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-8
SLIDE 8

8

PAGE

INTERIM RESULTS 2010

Life: Sales Recovery

2009 2010 2011 2012

RETAIL DECLINE STABLE RECOVERY GROWTH CORPORATE DECLINE DECLINE STABLE RECOVERY ILIM GROWTH GROWTH GROWTH GROWTH Bottom of cycle

  • Retail Life
  • Sharp declines in 2008 & 2009

but stabilising in 2010

  • Driven by strong consumer

confidence and improvement in markets

  • Corporate Life
  • Declines in 2009 & 2010
  • Resumption of salary and

employment growth will drive sales

  • ILIM - track record drives continued

growth through cycle

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-9
SLIDE 9

9

PAGE

INTERIM RESULTS 2010

Life: Sales outcome

  • Overall sales 22%
  • Single premium life sales 7%
  • Investment bonds 29%
  • Pension 2%
  • Annual premium life sales 25%
  • Low salary growth and

recruitment

  • SME cash-flow weak
  • ILIM continues to outperform
  • Inflows double to €1.2bn

H1 2010 Retail Corporate ILIM & ILI Total €m 65 70 141 276 ▲% (4) (23) +107 +22

* APE basis

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-10
SLIDE 10

10

PAGE

INTERIM RESULTS 2010

>>> >>> >>>

PROFITABILITY: RETENTION:

Revert to long term assumptions by year end

SALES:

Life: Outlook

Recovery in line with expectations Further recovery

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-11
SLIDE 11

11

PAGE

INTERIM RESULTS 2010

  • Funding
  • Impairments
  • Profitability

Banking: Managing Key Areas

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-12
SLIDE 12

12

PAGE

INTERIM RESULTS 2010

Bank: Funding Strategy

  • Focus on maximising “stable funding”
  • retail deposits and long-term funding
  • Aim to have 70% of funding

comprising retail deposits and long- term debt by 2012

  • Residential mortgage book provides

large pool of quality collateralised assets to cover any risks to short- term funding

  • H1 2010 loan to deposits ratio of

240% and stable funding ratio of 56% Retail Deposits Long Term Debt Stable funding Short Term Debt 2010 % 27 33 60 40 100 2011 % 31 34 65 35 100 2012 % 34 36 70 30 100

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-13
SLIDE 13

13

PAGE

INTERIM RESULTS 2010

Bank Deposit Funding Progress

  • Retail inflows of €0.8bn in H1 2010
  • Branch networks
  • Brokerage
  • 25,000 current accounts
  • Full year Retail target of €1.7bn
  • Corporate deposits
  • Down slightly
  • Manage transition as guarantee

changes end September Retail Deposit Growth

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-14
SLIDE 14

14

PAGE

INTERIM RESULTS 2010

Bank: Term Funding Programme

  • Refinancing requirement of €6.4bn in

total for 2010, of which €5.1bn raised YTD

  • Balance of €1.3bn refinancing to be

done by year end

  • Further issuance of up to €1.5bn

targeted to improve funding mix

  • Strategy to migrate from guaranteed

funding to normalised term issuance

  • Secured / unguaranteed

issuance of €2bn in 2011 and 2012

  • Unsecured / unguaranteed

issuance of €2bn in 2013 Year 2010 (H2) 2011 2012 2013 Main Status Guaranteed Secured Secured Unsecured Amount €1.3bn – €2.8bn €2.0bn €2.0bn €2.0bn

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-15
SLIDE 15

15

PAGE

INTERIM RESULTS 2010

Bank: Loan Arrears & Impairments

  • Continue to work with customers

experiencing difficulties with mortgage repayments

  • ROI residential arrears continuing to

rise, early arrears more slowly

  • Reductions in ROI consumer finance

and UK residential arrears

  • Impairment provisions at €150m,

21% on H1 2009

  • Impairments peaked in 2009, arrears to

peak in 2010

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

UK Mortgage Arrears Cases Irish Residential Mortgage Arrears Cases

slide-16
SLIDE 16

16

PAGE

INTERIM RESULTS 2010

Bank: Loan Book

  • Loan book 2% in H1 2010,

constant currency basis

  • Gross new lending €350m in H1 2010
  • Low level of redemptions impacting

level of new lending

  • UK book closed to new business

Total Loan Book €38.7bn (Dec 2009: €38.9bn) Loan Balances

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-17
SLIDE 17

17

PAGE

INTERIM RESULTS 2010

  • Margin stable in H1 2010
  • Higher funding costs
  • SVR increases in February and August 2010
  • New Government Guarantee add further to bank funding costs

Bank: Profitability - N.I. Margin

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-18
SLIDE 18

18

PAGE

INTERIM RESULTS 2010

  • Continuing cost reductions
  • 15% from peak in 2008
  • Voluntary redundancy programme in Q1
  • 140 FTEs staff
  • Cost €18m
  • Annualised cost saving of €9m
  • Accenture review
  • Long term cost reductions
  • Income generation opportunities
  • On hold

Bank: Profitability - Cost Reduction

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-19
SLIDE 19

19

PAGE

INTERIM RESULTS 2010

Bank: 3 Year Targets

NII Impairment charge Tier 1 capital L/D ratio Stable funding rate Return on equity (ROE) H1 2010 Actual 0.81% €150m 10.7% 240% 56% Negative 2013 Target >1% Normalised >10% <170% 70% >10%

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-20
SLIDE 20

20

PAGE

INTERIM RESULTS 2010

Banking

  • EBS Building Society
  • Irish Nationwide Building Society
  • ICS Building Society

Insurance

  • New Ireland
  • Other

Fund Management

  • Bank of Ireland Asset Management
  • Allied Irish Bank Investment Managers

Strategic Opportunities

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-21
SLIDE 21

21

PAGE

INTERIM RESULTS 2010

Summary

LIFE - STRONG PROFIT GROWTH BANKING - PATH TO RECOVERY STRATEGY - MAKING PROGRESS

KEVIN MURPHY: GROUP CHIEF EXECUTIVE

slide-22
SLIDE 22

22

PAGE

INTERIM RESULTS 2010

  • Earnings
  • Funding
  • Asset quality
  • Capital
  • Outlook

Financial Review

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-23
SLIDE 23

23

PAGE

INTERIM RESULTS 2010

Small operating loss due to:

  • Strong recovery in life business
  • Bank continuing to experience

higher funding costs and significant impairment provisions Life embedded value changed by:

  • Property and equity markets flat

compared with large property falls in H1 2009

  • Negative impact from change in

reserving basis for financial

  • ptions & guarantees
  • Increase in risk discount rate to

8.1% (2009: 7.5%) as a results

  • f an increase in Irish gilt yields

Group Earnings

Operating (loss) / profit

  • Life
  • Banking
  • Associate / other

Operating (loss) Life embedded value:

  • Investment fluctuations
  • Economic assumptions
  • Consol. adjustment

(Loss) before tax

H1 09 €m

84 (132) (3) (51) (80) (89) (220)

H1 10 €m

118 (131) 3 (10) (11) (7) (4) (32)

Change %

40 1 80

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-24
SLIDE 24

24

PAGE

INTERIM RESULTS 2010

Life new business volumes 7% lower,

  • ffset by doubling of sales by ILIM

Life (excl. ILIM) new business margin:

  • APE: 13.0% (FY 09: 11.4%)

Improvement in In-force earnings

  • Strong risk experience

Life Earnings

New business Total expected return Experience variances Assumption changes In-force Operating profit Taxation Profit after tax

H1 09 €m

23 61 (21) 21 61 84 (9) 75

H1 10 €m

28 68 13 9 90 118 (12) 106

Change %

22 48 40 41

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-25
SLIDE 25

25

PAGE

INTERIM RESULTS 2010

Experience Variances Assumption Changes Persistency Risk Expenses / Other

Life Variances & Assumptions

Experience variances

  • Strong risk result in Corporate

Business

  • Improved persistency

Assumption changes

  • Expense assumption change in

each half year based on actual experience

  • Only make changes to risk and

persistency long term assumptions at year end H1 09 €m

  • 21

21

H1 10 €m

  • 9

9

H1 09 €m

(34) 6 7 (21)

H1 10 €m

(7) 19 1 13

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-26
SLIDE 26

26

PAGE

INTERIM RESULTS 2010

Net interest income Other income* Government guarantee Expenses Impairment provisions Operating (loss) Taxation (Loss) after tax

H1 09 €m

195 18 (11) 202 (145) 57 (189) (132) 15 (117)

H1 10 €m

192 21 (45) 168 (149) 19 (150) (131) 19 (112)

Net interest income broadly in-line with H1 2009 Net interest margin 81bps excluding cost

  • f ELG scheme

Government guarantee reflects higher cost of new guarantee

  • ELG €33m
  • CIFS €12m

Underlying costs down yoy Lower loan impairment provisions due to improvement in consumer finance and UK portfolios

Bank Earnings

* incl. trading income & investment return

Change %

(2) (17) 1

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-27
SLIDE 27

27

PAGE

INTERIM RESULTS 2010

Net Interest Margin

  • Higher cost of wholesale funding and competitive nature
  • f deposit market impact on margin
  • Mortgage re-pricing includes effect of SVR rate changes

(Sep 09 & Feb 10) and impact of mortgage switches

  • Book yield of c. 2.4% versus average cost of funds of
  • c. 1.6% giving net margin currently of c. 80bps (indicative)

Cost of Funds Customer accounts Long-term ECB Short term Cost % 2.1 1.8 1.0 0.7 1.6 Book % 34 33 17 16 100 Asset Yields ROI mortgages UK mortgages Commercial mortgages Consumer finance Treasury Yield % 2.6 1.5 2.8 7.1 1.9 2.4 Book % 57 17 5 3 18 100

Net Interest Margin – Run-rate Margin Movement FY 2009 Retail deposit funding Wholesale funding Asset re-pricing Other Balance Sheet H1 2010 BPS 83 (12) (6) 14 4 83 (2) 81

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-28
SLIDE 28

28

PAGE

INTERIM RESULTS 2010

Funding

June 2010 - Total €47bn

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

Raised €5.1bn term debt to date

  • 80% refinancing completed
  • Recent €270m private placement
  • Plan to raise €1.3bn - €2.8bn

Retail deposits continue to grow strongly Reliance on ECB reducing, significant collateral available Very difficult funding conditions since April 2010 Extension of Government Gtee to Dec 2010 for some liabilities Guaranteed and Non Guaranteed

  • pportunities arising
slide-29
SLIDE 29

29

PAGE

INTERIM RESULTS 2010

  • BTL accounts for 94% of Capital Home

Loans (CHL) portfolio

  • Closed for new business since early

2008

  • CHL BTL arrears down 38% to 998 in

June 2010 against peak in Q1 2009

  • CHL 3+ month arrears - 2.1% at June

2010

  • Industry average 3+ month arrears* -

2.8% at June 2010

  • Average indexed LTV of 83%
  • Negative equity 22% of loan book

* Source: Council of Mortgage Lenders >3 months, includes repossessions & receivers of rent cases

CHL Mortgage Arrears Cases

Arrears - UK Mortgages

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-30
SLIDE 30

30

PAGE

INTERIM RESULTS 2010

  • 28% increase in total arrears cases in

H1 2010

  • > 90 days monthly arrears increase of

33% in H1 2010

  • Irish mortgage cases > 90 days in

arrears 9,167 at June 2010 out of total portfolio of c. 181,000 cases

  • Average home loan indexed LTV of

66% at June 2010

  • Negative equity 25% of total cases at

June 2010 PTSB ROI Residential Mortgage Arrears Cases

Arrears - ROI Residential Mortgages

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-31
SLIDE 31

31

PAGE

INTERIM RESULTS 2010

Car Finance Arrears Cases

Arrears - Car Finance

  • Significant arrears and losses in 2009
  • Arrears levels stabilising
  • Short duration book, average 3 years
  • Increase in 2nd hand car prices has

significantly reduced provisions

  • Overall provision down

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-32
SLIDE 32

32

PAGE

INTERIM RESULTS 2010

ROI mortgages UK mortgages ROI commercial Consumer finance Specific €m 82 12 32

  • 126

Collective €m 4 1

  • 19

24 Total €m 86 13 32 19 150 H1 2010

Collective provisions: are determined on a portfolio basis generally using a statistical roll-rate model, and are used where individual loans are small and / or to recognise losses which has been incurred but not yet reported.

Impairment Charge

Total €m 98 17 30 44 189 H1 2009

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-33
SLIDE 33

33

PAGE

INTERIM RESULTS 2010

  • Indicative expected provisions €800m to €900m from 2009 to 2011 inclusive
  • Assumes peak to trough fall of 40% in house prices
  • Sensitivity to house price change
  • 2009 peak of bank provisioning
  • ROI residential mortgage arrears to peak towards end of 2010

Impairment Model

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-34
SLIDE 34

34

PAGE

INTERIM RESULTS 2010

Basel II Tier 1 capital Total required capital Total RWAs Core Tier 1 ratio Dec 09 €m 1,858 1,313 16,411 % 11.3 Jun 10 €m 1,769 1,328 16,603 % 10.7

  • Robust group capital position to absorb

expected defaults

  • Core Tier 1 ratio of 10.7% (Dec 09:

11.3%)

  • Basel II minimum total capital

requirement of 8%

  • Surplus capital of €441m
  • Prudential Capital Assessment Review

(PCAR) in progress with Financial Regulator

Capital - Bank

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-35
SLIDE 35

35

PAGE

INTERIM RESULTS 2010

Regulatory Capital Movement Jan 2010 Capital from existing business New business strain Net capital release Investment fluctuations / other Jun 2010 €m 685 104 (35) 69 4 758

Capital - Life

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

  • Minimum solvency requirement

for Irish Life Assurance of €424m (Dec 09: €416m) covered 1.7 times (Dec 09: 1.6 times)

  • Strong cash-flow generation
  • Expense reserve release of €50m

at year end

  • Loan secured on VIF
slide-36
SLIDE 36

36

PAGE

INTERIM RESULTS 2010

  • Banking
  • In-line with first half
  • Funding costs main risk
  • Life
  • Lower level of positive variances
  • Risk to persistency assumptions

Earnings Outlook

DAVID MCCARTHY: GROUP FINANCE DIRECTOR

slide-37
SLIDE 37

37

PAGE

INTERIM RESULTS 2010 Page 38. Group total (loss) after tax - EV basis 39. Group operating (loss) after tax - EV basis 40. Group operating EPS - EV basis 41. Group IFRS (loss) after tax 42. Group IFRS and EV basis results reconciliation 43. Bank non-interest income 44. Bank asset portfolio 45. Bank impaired loans 46. Bank non-performing loans 47. Bank regulatory capital 48. Life embedded value movement 49. Life asset quality 50. Life new business margin 51. Life operating costs 52. Life & investment sales 53. Life sales - Retail & Corporate 54. Other activities operating (loss) / profit

Additional Information

slide-38
SLIDE 38

38

PAGE

INTERIM RESULTS 2010

Operating (loss) Investment fluctuations Economic assumptions Other changes Total (loss) Pre-tax €m (10) (11) (7) (4) (32) H1 10 Tax €m 7 (1) 6 12 H1 09 Post-tax €m (44) (69) (78)

  • (191)

Post-tax €m (3) (12) (1) (4) (20)

Group Total (Loss) After Tax - EV Basis

slide-39
SLIDE 39

39

PAGE

INTERIM RESULTS 2010

Life assurance Banking Associate Other Operating (loss) / profit Pre-tax €m 118 (131) 2 1 (10) H1 10 Tax €m (12) 19

  • 7

H1 09 Post-tax €m 75 (117) 4 (6) (44) Post-tax €m 106 (112) 2 1 (3)

Group Operating (Loss) After Tax - EV Basis

slide-40
SLIDE 40

40

PAGE

INTERIM RESULTS 2010 Note: “own shares” included for EPS calculation

Operating (loss) / profit Taxation (Loss) / profit after tax Average no. of shares EPS H1 09 €m (51) 7 (44) 276m (16)c H1 10 €m (10) 7 (3) 276m (1)c

Group Operating EPS - EV Basis

slide-41
SLIDE 41

41

PAGE

INTERIM RESULTS 2010

Life assurance & investment Banking General Insurance Other Investment fluctuations Economic variance Other / Goodwill impairment Taxation (Loss) / profit after Tax H1 09 €m 65 (132) 4 (7) (70) (53) (61) (24) (7) (215) H1 10 €m 90 (131) 2 1 (38) 7 (5) 2 8 (26) 90 IFRS Life Earnings Movement H1 2010 €m New business effect (1) Interest on insurance VIF 32 Expected profit on Inv. contracts 37 Exp var. & assumption changes 15 Expected Investment Return 7

Group Total (Loss) After Tax - IFRS Basis

slide-42
SLIDE 42

42

PAGE

INTERIM RESULTS 2010

Embedded Value basis Investment business

  • Value of in-force
  • Deferred costs & fees
  • Restatement of liabilities

Own shares adjustment Other IFRS (Statutory) basis S’Holders Equity €m 2,453 (690) 145 70

  • (25)

1,953 Total (Loss) / Profit after Tax €m (20) (27) 2 (2) 11 10 (26) H1 2010

IFRS / EV Reconciliation

slide-43
SLIDE 43

43

PAGE

INTERIM RESULTS 2010 Note: Bancassurance Embedded Value operating profit €6m [H1 09: €6m] included in life assurance

Fees & Comms (rec’d) Fees & Comms (payable) Trading income Investment return H1 09 €m 27 (3) 24 (6) 18 H1 10 €m 26 (4) 22 (4) 3 21

Bank Non-Interest Income

slide-44
SLIDE 44

44

PAGE

INTERIM RESULTS 2010

Category Sovereign Bonds AAA AA A Bank FRNs / Corporate Bonds AA A BAA/BAA/B & lower RMBS AAA AA / A

  • Total bank asset portfolio of €8.1bn
  • The portfolio is made up of €3.4bn

Sovereign Bonds (42%), €4.1bn Bank FRNs (50%) and €0.6bn Prime RMBS (8%)

  • 93% of the Prime RMBS is EURO

denominated and there is zero US exposure in balance

€bn 1.7 1.6 0.1 3.3 0.6 0.2 0.6 0.02

Asset Portfolio June 2010

% 50 47 3 80 15 5 97 3

Bank Asset Portfolio

slide-45
SLIDE 45

45

PAGE

INTERIM RESULTS 2010

Residential mortgages

  • ROI
  • UK

Commercial mortgages Consumer finance Balances €m 736 105 217 160 1,218 Total Loans % 2.7 1.3 9.1 10.5 3.2 June 2010 Balances €m 415 75 171 167 828 Total Loans % 1.5 1.0 7.2 9.5 2.1 December 2009

Impaired Loans

Impaired loans: are loans where there is objective evidence that an impairment loss had occurred, including cash-flow difficulties,

  • verdue contractual payments and breach of loan covenants
slide-46
SLIDE 46

46

PAGE

INTERIM RESULTS 2010

Residential mortgages

  • ROI
  • UK

Commercial mortgages Consumer finance Balances €m 1,858 265 378 195 2,696 Total Loans % 6.9 3.3 16.2 12.8 7.0 June 2010 Balances €m 1,165 297 216 124 1,802 Total Loans % 4.2 3.8 8.9 6.0 4.5 June 2009 Balances €m 1,342 258 307 206 2,113 Total Loans % 4.9 3.4 12.9 11.8 5.4 December 2009

Non-Performing Loans

Non-performing loans: are impaired loans and loans where repayments are over 90 days in arrears

slide-47
SLIDE 47

47

PAGE

INTERIM RESULTS 2010

Basel II Capital Available capital Tier 1 Tier 2 Total capital Deductions* Total available capital (Tier 1) Required capital Excess own funds Total RWAs RAR (all Core Tier 1) Dec 09 €bn 3.9 1.2 5.1 (3.3) 1.8 1.3 0.5 16.4 % 11.3 Jun 10 €bn 3.9 1.2 5.1 (3.4) 1.7 1.3 0.4 16.6 % 10.7

Bank Capital - Basel II

* Life company investment and other regulatory adjustments

  • Basel II minimum total capital

requirement of 8%

  • Surplus capital of €441m
  • Strong capital position to absorb

expected defaults

slide-48
SLIDE 48

48

PAGE

INTERIM RESULTS 2010

Opening 1 Jan 2010 Operating profit Investment fluctuations Economic assumptions Capital & other movements Closing 30 Jun 2010 Net Worth €m 566 69 8 1 (5) 639 VIF €m 1,076 37 (20) (2)

  • 1,091

Required Capital €m 634 645 Total €m 1,642 106 (12) (1) (5) 1,730

Life Embedded Value Movement

* All movements net of tax

slide-49
SLIDE 49

49

PAGE

INTERIM RESULTS 2010

Rating AAA AA A €m 1,520 371 24 1,915 % 79 20 1 100 Non-linked Debt Securities

  • Non-linked liabilities matched with debt

securities of appropriate duration

  • Majority high quality sovereign bonds

Insurance & investment assets Deposits Property Equity Debt securities / other Subordinated debt* €m 550 104 29 177 860 (221) 639 % 64 12 3 21 100 Shareholders’ Net Worth

  • Property - predominantly owner occupied

plus seed capital for property funds

  • Property exposure reduced
  • Subordinated debt - €200m capital raised

in 2007

* €200m net of mark-to-market adjustments

Life Asset Quality

slide-50
SLIDE 50

50

PAGE

INTERIM RESULTS 2010

New Business Contribution Life ILIM Margin - APE Life ILIM Margin – PVNBP* Life ILIM H1 09 €m 18 5

%

10.5 8.8 % 1.6 0.9 H1 10 €m 20 8

%

13.0 6.3 % 1.8 0.6 APE Sales H1 10 H1 09 €m €m Life 156 167 ILIM 120 60 PVNBP* Sales H1 10 H1 09 €m €m Life 1,095 1,090 ILIM 1,199 605

* Present value of new business premiums

Life New Business Margin

slide-51
SLIDE 51

51

PAGE

INTERIM RESULTS 2010

Retail & Corporate ILIM Other IFRS adjustment H1 10 €m 77 6 6 89 (7) 82 H1 09 €m 80 5 4 89 4 93

Life Operating Costs

slide-52
SLIDE 52

52

PAGE

INTERIM RESULTS 2010

Recurring Premium Single Premium H1 09 €m 257 219 605 79 1,160 116 1,160 H1 10 €m 267 244 1,199 208 1,918 192 1,918 Retail Corporate ILIM ILI Total APE Basis PVNBP Basis H1 09 €m 42 69

  • 111

111 535 H1 10 €m 38 46

  • 84

84 376

Life & Investment Sales

slide-53
SLIDE 53

53

PAGE

INTERIM RESULTS 2010

Products Pension Protection / Risk Investments Savings Distribution Bancassurance Direct Sales force Brokers / IFAs Institutions H1 09 €m 32 22 10 4 68 12 20 28 8 H1 10 €m 28 20 13 4 65 11 19 25 10 Change % (13) (9) 30

  • (4)

(8) (5) (11) 25 68 65 (4) Products DC pension Protection / Risk Annuities PRB / DB Distribution Consultant Brokers Direct / Cornmarket H1 09 €m 55 17 9 10 91 35 25 31 91 H1 10 €m 39 10 12 9 70 31 21 18 70 Change % (29) (41) 33 (10) (23) (11) (16) (42) (23) Retail APE Sales Corporate APE Sales

Retail & Corporate Life Sales

slide-54
SLIDE 54

54

PAGE

INTERIM RESULTS 2010

Cornmarket / IPSI Corporate costs Associate H1 09 €m 3 (10) (7) 4 (3) H1 10 €m 7 (6) 1 2 3

Other Operating Activities

slide-55
SLIDE 55

55

PAGE

INTERIM RESULTS 2010

Please contact our Investor Relations Department for any further information or visit our group website at www.irishlifepermanent.ie Contact details: Barry Walsh barry.walsh@irishlife.ie +353 1 704 2678 Orla Brannigan

  • rla.brannigan@irishlife.ie

+353 1 704 1345

Contact Information