Irish Permanent has marked the end of an era with another set of good results. Within two months it will merge with Irish Life to become part of a major player in the Irish financial services sector. Shareholders will be hoping the new union will be good for them. Since the former building society converted to a public company in 1994, they have done extremely well.

So far the market is signalling that the future can only be brighter.

Irish Life & Permanent will be a formidable player in the Irish market. One of its first tasks will be to set about adding the State-owned ICC Bank to its fold, according to chief executive, Mr Roy Douglas.

It will face stiff competition in this regard with other contenders such as Bank of Ireland also in the running. ICC Bank would bring the crucial small to medium-sized business clientele to the group. Irish Life & Permanent will focus also on expanding its banking operations.

Both companies will continue to trade separately under their respective brands with Irish Permanent optimistic about its own growth prospects. The phenomenal growth in the demand for mortgage finance has driven huge profit growth - particularly in the past three years. At each juncture over the past 18 months when the company has announced record profits, it has expressed concern about the rise in house prices. In line with a growing chorus, it recognises that owning a home is becoming a luxury increasingly few young people can afford.

The big trend in terms of what the Irish Permanent is seeing is that parents are increasingly being asked to subsidise the purchase of their children's homes. Mr Douglas states that the average mortgage taken out by a first-time buyer in Dublin was £72,000 last year, with the national average at £55,000. The figures for a Dublin home-owner fall a long way short of the average cost of a house or apartment (around £120,000) anywhere in the city. The shortfall of up to £50,000 is being financed, it seems, by family members.

The Irish Permanent says it is not seeing a growing demand from existing customers seeking a second mortgage for these purposes, although its savings base is being hit.