Irish Life & Permanent Plc said loan losses at its banking unit more than doubled in the first half as mortgage arrears increased and house prices plunged.
Irish Life’s cases of Irish mortgage customers at least 90 days behind in payments increased to 8.8 percent at the end of June from 6.8 percent from six months earlier, the Dublin-based company said in a statement today. The loan loss at the company’s banking unit rose to 333 million euros ($481 million) from 150 million in the year earlier period.
Irish Life last month became the fifth government-guaranteed financial group to succumb to state control after Finance Minister Michael Noonan injected 2.7 billion euros into it to shore up the unprofitable banking division, Permanent TSB. Noonan is selling the life assurance and fund management division to limit costs to the state of rescuing the group.
“We are progressing discussions with a number of interested parties and are encouraged by the progress so far,” said Kevin Murphy, chief executive officer, in the statement.
JC Flowers & Co. has teamed up with Apollo Global Management LLC, both private equity firms, to make a joint bid for the unit, said three people familiar with the discussions on Aug. 19. London-based CVC Capital Partners Ltd., Great-West Lifeco Inc.’s Canada Life Ireland as well as U.S. insurers Unum Group and Delphi Financial Group Inc. are among the other bidders, the people said. Final offers are due in October, they said.
Operating profit in the life assurance unit fell to 64 million euros for the first six months from 118 million euros for the same period last year. The company still expects the division’s full-year performance to be “broadly in line” with 2010, it said.
The company posted a 414 million-euro pretax profit for the six months, compared with a 34 million-euro loss for the year-ago period, boosted by a 763 million-euro gain from buying back subordinated debt at a discount.