YESTERDAY’S STRONG gains in the share price of Irish Life and Permanent probably reflects the political paralysis over Nama which has stalled share trajectories of AIB and Bank of Ireland – as both of these have much greater exposure to the so-called toxic loans on commercial property.
Irish Life’s management board must be thanking their lucky stars that they steered clear of that area of lending – or were beaten in the boom years by more favourable lending terms offered by the other two Irish banks.
Whatever the reason for their current lucky position, it comes as cold comfort to their senior staff who have bowed to the inevitable “frozen bonus” – an earning condition akin to a tennis player’s frozen elbow.
Other Irish Life and Permanent staff are deprived of profit sharing and subject to a root-and-branch review of their roles and performances, in common with other banks.
Their UK buy-to-let is closed for new business.
But for all that, prudence has brought its own rewards with projected increases in new Irish mortgages for the rest of the year. Yesterday’s approval of the market – which we all know is the ultimate arbiter – puts their share price around 10 times what it was a year ago.
