IRISH LIFE & Permanent (IL&P) chairwoman Gillian Bowler apologised “unreservedly” for the controversial transfer of €7.45 billion into Anglo Irish Bank last September to bolster the financial position of that bank.

She defended her position, saying she wanted to be part of the solution, not part of the problem.

Ms Bowler said she felt it was “the honourable thing” to offer her resignation last month which was declined by the board of ILP.

“I am a fighter, not a quitter. We are in the middle of a real reputational crisis and we have a business to run and we have ambitions for that business,” she said.

“I want to be part of the solution. I don’t want to be part of the problem but I intend staying on.”

Ms Bowler said the transactions with Anglo Irish were “wrong” and the company was “deeply sorry” they had happened.

She said the board had given no prior approval for the transactions and would not have permitted the deposits had it known about them.

“I apologise unreservedly for them,” she said.

She declined to answer questions about the transactions, saying that she was “legally precluded” from doing so because of the ongoing investigations.

She said the Central Bank and Financial Regulator encouraged Irish banks “to work together and support each other” but she would “not use the ‘green jersey agenda’ to defend those transactions”.

IL&P made a full-year pretax loss of €364 million for 2008, compared with a pretax profit of €460 million the previous year.

The company posted operating profits of €341 million in 2008, down 42 per cent, but fell into the red after writing off €1 billion on bad investments, higher than expected loan losses and goodwill from the purchase of TSB Bank.

IL&P said bad debts will reach at least €480 million over the next three years, but may rise to €650 million – or 1.6 per cent of its loan book, in a stress case – if unemployment reaches 14 per cent and house prices fall by 40 per cent.

However, the company said it doesn’t need Government capital and can generate surplus capital.

IL&P share price rose 27 per cent, or 19 cent, to €0.91, valuing the company at €253 million.

The company said there had been “a marked increase” in mortgages falling into arrears in the final three months of last year.

Mortgages in arrears of more than a month climbed to 7,900 of the bank’s 192,000 mortgages at the end of 2008 – an increase from 5,700 cases a year earlier – according to the company’s new finance director David McCarthy.

He said 8 per cent of mortgages, about 15,000 loans, were in negative equity where the loan is higher than the property’s value.

The company said it was making “good progress” in selecting a new chief executive.

Kevin Murphy, IL&P’s new executive director of operations, said merger talks with EBS building society were “ongoing” and the Government had signalled it will assess the “third force agenda” – the term assigned to a new, larger bank to rival the two big retail banks, AIB and Bank of Ireland – and “associated ideas with that”.

He said IL&P would “engage with” Government and EBS on this in the second half of the year.

He said the company had not taken “any principled position” on how the Irish banking industry may be restructured, including one suggested option to break up IL&P and spin off Permanent TSB in the creation of a larger bank.

It was “impossible to call” how financial services would be restructured in future.

Ms Bowler said the situation in global banking was “very fluid”.