Irish Life & Permanent puts sale of UK loan book on hold
IRISH LIFE & Permanent has suspended the sale of its £6.8 billion (€8.1 billion) UK loan book, a source close to the company said, as the Government announced it would finalise a restructuring plan for the bancassurer this month.
IL&P, which has pledged to shed almost €16 billion in assets via disposal and run-off by the end of 2013 as part of the EU-International Monetary Fund bailout, has also scrapped the sale of its €500 million subprime mortgage book, the source said.
The Government, which took over IL&P last year, plans to split its struggling banking arm, Permanent TSB, from its life insurance arm but had to shelve the sale of the insurance business late last year after market turmoil put off prospective buyers.
Minister for Finance Michael Noonan said last month a decision on Permanent TSB’s future would be made by the end of April, and the Government said yesterday that a preliminary proposal for the “financial and operational restructuring” of IL&P would be prepared by the end of February.
Mr Noonan indicated last month that winding down Permanent TSB was not on the cards, with its sale or merger with a larger bank a more likely option. The proposal will build on an analysis of restructuring options recently completed by the bank and benefit from third-party reviews of that analysis, the government said in an updated version of the memorandum of understanding with the EU-IMF published yesterday. ILP looked at different solutions in its analysis including a possible warehousing of loans, a source said.
Loss-making tracker mortgages make up about 60 per cent of Permanent TSB’s €26 billion Irish mortgage book.
Reports last month suggested that the bank was in advanced talks with officials about putting them in an off-balance sheet vehicle or the former Anglo Irish Bank. A spokesman for Irish Life declined to comment on the planned sale of the UK and subprime mortgage loan books.
– (Reuters)
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