June 11 (Bloomberg) -- Irish Life & Permanent Plc today had its outlook reduced to “negative” from “stable” by Standard & Poor’s, which said the lender’s financial profile will remain “weak” after its earnings performance declined.
Uncertainty over the future role of Dublin-based Irish Life’s banking operations “may linger,” S&P said in a statement. S&P may lower its rating if it considers the bank won’t return to profitability in 2012 o r should the insurance unit’s performance “significantly” weaken, it said.
Mortgage arrears at Irish Life increased after the economy shrank and real-estate prices fell by half from their peak in early 2007. The lender this year created a new holding company that would allow it to split its banking and life insurance units.
“We believe that the financial profile of Irish Life & Permanent Plc remains weak and, despite demonstrating deposit growth, we expect it will continue to be reliant on government funding support for the foreseeable future,” S&P credit analyst Nigel Greenwood said in the statement.
The stock pared gains after the announcement, and was down 0.7 percent at 1.63 euros at 2:36 p.m., after earlier rising as much as 5.6 percent to 1.73 euros.
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