IPM Irish Life&P.Gp

 

TIDMIPM 
 
RNS Number : 5223S 
Irish Life & Permanent Grp HldgsPLC 
10 September 2010 
 

 
Statement by Irish Life & Permanent Group Holdings plc. 
 
Murphy welcomes "positive" review of Group's Capital Requirements by Central 
Bank 
 
Friday 10th September 2010.  Kevin Murphy, Group Chief Executive of Irish Life & 
Permanent Group Holdings plc, has welcomed the results of Prudential Capital 
Assessment Review [PCAR] at permanent tsb bank by the Central Bank and the 
application of the CEBS [Committee of European Banking Supervisors] stress test 
to the bank. 
 Murphy said that the conclusion of the PCAR and CEBS exercises confirms the 
robust capital strength of the Group which has avoided any call on the 
Government for Capital and which has no exposure to NAMA. 
 The PCAR review has identified that the bank has sufficient capital to meet its 
base case scenario for the next 3 years [2009 - 2012] while it requires  EUR145 
million in additional capital to meet its stress  case scenario for the same 
period.  Murphy said that the Group would meet that requirement through its own 
resources by way of a planned VIF Securitisation and cash flow from other 
non-banking subsidiaries. 
 The application of the CEBS test confirms that the bank exceeds the minimum 
Tier 1 Capital Ratio requirement [of 6%] in all scenarios. 
 
 
 
Outcome of PCAR Review: 
Base Case - Sufficient Capital 
The PCAR Review confirms that the bank has sufficient capital to meet the base 
case outlined in the review [based on assumed losses of EUR1344 million]. 
 
Stress Case - Requirement for EUR145 million in additional Capital [to be raised 
from own resources] 
Under the  Stress Case [based on assumed losses of EUR2215 million], the PCAR 
identifies a requirement for additional capital of EUR145 million in 2011.   The 
Group proposes to do this via the EUR100 million VIF securitisation [already 
underway] and from cash flow from other non- banking subsidiaries. 
 
Findings of CEBS test 
The Central Bank also applied to the bank the stress test as determined by the 
Committee of European Banking Supervisors (CEBS) in July 2010.  The results of 
this exercise demonstrate the bank meets the stress requirement of a 6% Tier 1 
target capital ratio. 
Results of CEBS test: 
+----------------+---------------+--------------+--------------------+ 
|    Scenario    |  Benchmark    |   Adverse    |     Adverse +      | 
|                |               |              |  Sovereign Stock   | 
+----------------+---------------+--------------+--------------------+ 
|  Tier 1 Ratio  |     9.9%      |    8.9%      |        7.6%        | 
| permanent tsb  |               |              |                    | 
|      bank      |               |              |                    | 
+----------------+---------------+--------------+--------------------+ 
 
The results of the CEBS test do not include the capital requirements of EUR145m 
resulting from the PCAR.  Including this additional capital will increase the 
above ratios by circa 1.3%. 
 
Separation of bank and life company: 
The Group also confirmed that if the bank and the life company are separated as 
has been proposed as part of its current offer for the EBS, the Group estimates 
that EUR925 million of capital would be needed to recapitalise the bank [permanent 
tsb] on a stand alone basis.  The Group envisages that this would be funded from 
internal resources, a liability buy back programme and an external capital 
raising exercise. 
 
 
 
For further information contact: 
Barry Walsh, Investor Relations 
Ph. +353 1 7042678 
Ph. +353 876818157 
 
Ray Gordon, Gordon MRM 
Ph: +353 1 6650452 
Ph: +353 872417373 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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