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Dublin: 1°C Thursday 20 January 2022

Irish Life & Permanent suspends share trading

The lender has temporarily suspended its shares after prices plummeted yesterday amid speculation the institution would be taken into state control.

A general view of The Irish Life building on Lower Abbey Street in Dublin.
A general view of The Irish Life building on Lower Abbey Street in Dublin.
Image: Julien Behal/PA Wire/Press Association Images

SHARES IN IRISH Life and Permanent have been suspended this morning until Friday, following yesterday’s spectacular falls amidst speculation that it will be taken into state ownership following tomorrow’s bank stress tests.

The company issued a statement to the stock market this morning, after shares suffered a 45 per cent drop and closed at 40 cents.

IL&P is the only one of Ireland’s main lenders that has not yet gone to the state looking for a cash injection, largely because of it avoidance of commercial property and development loans, reports the Financial Times. It is also the largest pension payer in the country after the state.

There are two main areas of concern with the institution; firstly, it has been Ireland’s leading lender on tracker mortgages, on which banks are now making a loss. Secondly, its loan to deposit ratio (1:2) is well above the target level under new regulations to be introduced.

It is expected that IL&P will need between €2 billion and €3 billion to cover losses on its mortgage books, the Irish Times reports.

The Central Bank stress tests will be released at 4.30pm tomorrow, and it is widely speculated that IL&P will go into state control on Thursday or Friday morning. It is expected that the country’s banks, on a whole, may need a further €27.5 billion of capital, according to Bloomberg analysts.

This morning’s announcement will have no affect on depositors, policy holders, or those receiving pension payments from IL&P.

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