LONDON (SHARECAST) - The travails of the banking business of Irish Life and Permanent overshadowed a decent performance by the group’s life assurance and fund management business in 2010.
Operating profit for the group, before impairment provisions, rose to €254m from €68m in 2009. The life assurance and fund management businesses moved back into the black at the operating level with a profit of €179m against a loss of €2m in 2009.
Pre-provision earnings from the banking business declined from €106m in 2009 to €56m in 2010 primarily as a consequence of the increased costs associated with the Government Guarantee Schemes for bank funding.
On an embedded value basis, the operating profit for the group, before impairment provisions, increased to €223m from €180m in 2009.
Impairment provisions for the year were €420m, up from €376m in 2009, principally reflecting the increase in provisions in the Irish residential and commercial mortgage loan books which includes the change to the assumption used for the peak-to-trough house price decline.
The bank’s Tier 1 capital ratio was 10.6% at 31 December 2010 , down from 11.3% at the end of 2010.