IRISH LIFE AND PERMANENT FY BROADLY IN LINE
* Profit After Tax (PAT) of -€279m better then our forecasted -€308.
* Divisionally, PAT for banking business -€270m better then our forecasted -€302m and Life APE sales (ex ILIM) also ahead at +€348m vs our forecasted +€318m.
* loan loss provisions better at €376m vs our forecasted €400m
* Life capital stable
* Alliance disappointing-no surprises given recent results
* Tier 1 at 9.2% better then our forecasted 8.9%
OUTLOOK: 2010 to be broadly similar to 2009. At first glance
we are likely to leave our forecasts unchanged.
FY Operating loss -€196m vs -€223m NCBe
FY Impairments €376m vs €433m NCBe
Impairment guidance unchanged at €800-900m to 2011 (NCBe €1.1bn)
Net interest margin 0.83% vs 0.85% NCBe
Loan to deposit ratio 246% vs 271% in 2008
Outlook – Banking business to be broadly similar to 2009 with significant
improvement in life business profitability.
Analyst comment to follow
ACTUAL DAVY CONS
PBT (€m) -319.0 -389.0 -194.8
EPS (c ) -66 -69.4 -47.0
*Operating profits are better than expected due to lower impairment losses in the bank but this may be a timing issue; still guiding €800m to €900m losses through the cycle
*APE decline of 32% is better than our 38% forecast; a bit behind market decline of 38% due to distribution; brokers fared relatively better than bancassurance/sales forces
*Bank Net Interest Margin in line at 83bps but life margin of 11.4% better
*On outlook expect bank result in 2010 to be similar to 2009 but ‘significant’ improvement in life
*No news on Third Force; blaming NAMA delay for lack of progress