THE MINISTER FOR Finance Michael Noonan has insisted that no additional funds will be required to prop up Irish Life and Permanent (IL&P) in the wake of the collapse of the sale of its life assurance arm.

The government’s proposed sale of Irish Life, the profitable life assurance arm of the IL&P group, collapsed at the last minute after potential investor Canada Life withdrew its interest, citing the growing fears over events in the Eurozone.

So far €2.7 billion has been pumped into IL&P as part of the recapitalisation process determined by the stress tests carried out earlier this year which indicated the institution needed a total of €4 billion.

The proposed sale would have averted any other funds being pumped into IL&P but with its collapse the extra €1.3 billion will come from money that has already been accounted for the Minister insisted this evening.

He told RTÉ’s Six-One News:

The asset is very valuable, it’s not like the recapitalisation of other banks where we were putting money in and the taxpayers lost. We’ve continued to run as Irish Life as a successful, ongoing insurance company.

The separation of Irish Life and Permanent TSB, the banking arm of the group, will continue, RTÉ reports, but there will be no impact on customers.

It is hoped that the eventual sale of the profitable arm of the group will partly fund the recapitalisation of Permanent TSB.

Read: Sale of Irish Life collapses at a cost of €1.3 billion to taxpayer >