Irish Life and Permanent today announced its residential mortgage arrears continue to increase while demand for new mortgages "has been very subdued" so far this year.
The company had €13.1 billion of drawings from the European Central Bank at the end of April, down from €13.8 billion at end-December.
In a statement, IL&P said although it believed the worst of the recession "appears to be over" in Ireland, the recovery in 2011 is expected to be modest "with continued weakness in domestic demand and consumer sentiment being partially offset by a strong export sector performance".
It said residential property prices continue to decline and while the unemployment rate is showing signs of stabilising, employment is expected to continue to fall in 2011.
Irish residential mortgage arrears cases (over 90 days) rose by 17 per cent to 13,500 at the end of April, while early arrears (under 90 days) cases have gone from 4,800 cases at December 2010 to just over 5,000 cases at the end of April 2011.
The company said its life and investment management businesses were performing broadly in line with expectations "although the impact of budgetary changes on customers' disposable incomes has contributed to weaker persistency experience in the Retail Life business".
IL&P added that although the acquisition of the INBS deposit balances in February had been positive for the group's banking business, funding conditions continue to be "challenging".
Bloomberg