IRISH LIFE & PERMANENT has announced a ‘significant improvement’ in its financial performance for the first half of 2010, cutting its operating losses back to €10m after its life and pensions business recovered from a sluggish 2009.

The group’s Irish Life Assurance arm saw its operating profits reach €118m for the six months to June 30, up a massive 40% on the €84m from the same period in 2009.

The retail banking operation, Permanent TSB, also performed strongly, seeing its operating profits fall 1% to €131m, but being able to cut its provision for bad loans by 21% (€39m) – though the benefit of this was largely announted for by the increased cost of the government guarantee.

Nonetheless, the bank’s loan portfolios performed stronger than expected in the car finance and personal loan sectors in Ireland, and in the UK mortgage field. Irish mortgage arrears increased by 28%.

CEO Kevin Murphy warned that the bank would report further losses for the remainder of the year but said the life assurance business would continue to drive the group’s path to recovery.

The group also confirmed that it was one of the parties who had submitted bids to take over the EBS Building Society.

Shares in IL&P were at €1.50 each, up 11c, in early trading in Dublin.