Irish Life & Permanent Plc, the country’s largest life assurance and pensions group, may need to raise about 120 million euros ($159 million) of additional capital to reach new regulatory targets, said a person familiar with talks between the company and central bank on the issue.
Irish Life was directed by the central bank in September to raise 145 million euros under a stress-case loan-loss scenario for its banking unit Permanent TSB. It may now need to raise a further 120 million euros to reach a 12 percent core Tier 1 capital ratio, said the person, who declined to be identified because the talks remain private.
Ireland will seek to raise the core Tier 1 capital levels of lenders to as much as 12 percent, two people with knowledge of the matter said Nov. 23, as the country races to complete a deal for an 85 billion-euro international aid package this weekend to shore up its flagging banks and public finances.
Irish Life raised 100 million euros of the capital it was told to raise in September by securitizing some of its life book, Kevin Murphy, the company’s chief executive officer, said in an analysts call on Nov. 17.
Still, Irish Life also said on Sept. 10 it would need to raise 925 million euros to recapitalize its retail banking unit if it were separated from the life group and merged with EBS Building Society. One option now being considered is for Irish Life to bid as a group for EBS, which would avoid having to recapitalize Permanent TSB on a standalone basis in preparation for a merger, the person said today.
Irish Life and a group led by Dublin-based Cardinal Asset Management are the final two bidders for government-controlled EBS, Ireland’s Finance Ministry said last month. The Cardinal group of bidders includes U.S. leveraged buyout firms Carlyle Group and WL Ross & Co.
Irish Life spokesman Ray Gordon and Finance Ministry spokesman Eoin Dorgan declined to comment. A spokesperson for the central bank was not immediately available for comment. Peadar Hayes, a spokesman for the central bank, also declined to comment.