The IFG Group, an Irish-based financial services company, announced at its a.g.m. this afternoon that it will cease its investment and related trading activities.
In a statement issued following the meeting, the company said weakness in global equity markets had led to increased volatility in the market and that the board considered it prudent to exit this activity.
The move involves the cessation of trading on IFG’s own account in Sterling endowment policies.
The portfolio of policies held at December 31st, 2001 will be unwound and the related debt of €46.9 million at December 31st, 2001 will be paid off.
In doing so, the company will reduce the earnings base of the group, de-gear the group’s balance sheet by €46.9m and release cash, which will be re-invested in the remaining fee based activities of the group.
The board said it believed the decision to focus primarily on fee based activities would give greater certainty of earnings and predictability of earnings growth.
The discontinuation of investment activities while initially re-basing earnings to a lower level will, according to the board, greatly reduce gearing, simplify the group’s balance sheet and will release cash for reinvestment in the core business.
"Our business now has a meaningful position in the markets in which we operate," said Mr Richard Hayes, chief executive of IFG.
"We also have the management structures and business model in place to deliver sustained organic growth. That is what we intend to do."