Irish Life & Permanent plc Investor Information Group Overview - September 2007
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Irish Life & Permanent plc
Investor Information
Group Overview
1 Group Overview
September 2007Group Profile
z Formed in 1999 from merger of Irish Life plc and Irish Permanent plc
z Irish Life, the largest life company, and Irish Permanent, the largest residential
mortgage lender, in Ireland
z Acquired TSB Bank in 2001 and merged with Irish Permanent to create
permanent tsb, the group’s retail banking division
z Strategic focus on Irish personal financial services market
z Dual primary listings on Dublin and London Stock Exchanges
2 Group OverviewGroup Strategy
z “Ireland first” strategy - focused on personal financial services in Ireland
z Targeting double digit earnings [organic] & dividend growth
z Opportunistic approach to acquisitions
z Distribution reach and product strength underpin business model
z Strong track record and low risk operating model
z Strongly capitalised [rated A+/Aa3] with significant financial flexibility
3 Group OverviewGroup Structure
Irish Life & Permanent Group
100% 100% 30%
Irish Life permanent tsb Allianz
PTSB
Retail Corporate ILIM(1) PTSB CHL(2) Allianz-Irish Life
Finance
Individual Group life & Fund Mortgages, Auto & Niche General
life, pensions, pensions via management. car finance, Consumer mortgage insurance
investments & employers Active & savings, lender (Associate)
Finance
savings and affinity passive current a/c,
groups products credit cards
Notes: (1) Irish Life Investment Managers.
(2) Capital Home Loans (UK).
4 Group OverviewGroup Earnings Mix
Mix
%
Banking 37
Life Assurance 41
Bancassurance* 11
General Insurance 11
[Associate]
Operating Profit 2006: €529m
* Bancassurance included in reported life earnings
5 Group OverviewIreland – 2007 & 2008 Economic Forecasts
CBI ESRI Davy NCB Average
S% S% S% S% S%
2007
y Consumption 7.00 7.5 5.7 7.0 6.8
y Employment 3.00 2.5 2.4 3.7 2.9
y GDP 4.75 4.7 4.6 6.5 5.1
2008
y Consumption 3.75 4.0 3.0 4.0 3.7
y Employment 1.50 0.6 0.7 3.5 1.6
y GDP 3.50 2.7 3.2 4.5 3.5
Sources: Central Bank of Ireland, Economic & Social Research Institute, Davy & NCB
Sept 07
6 Group OverviewIreland - Growing [Active] Population
million million
320 4.0
Ireland [rhs]
300
3.6
280
3.2
EU-25 [lhs]
260
2.8
240
2.4
220
200 2.0
2005 2010 2015 2020 2025 2030
Source: NCB
7 Group OverviewIreland – Housing Demand & Supply
90 90
Over 25 Completions (rhs)
80 80
70 70
60 60
50 50
000s
000s
40 40
30 30
20 20
10 10
0 0
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Source: NCB
8 Group Overview9
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Group Overview
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Forecast growth is 20% p.a.
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Income elasticity of demand estimated at 2.9
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Ireland – Pensions Savings Growth
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Source: NCBIrish Life Retail
Market position
Market leader with share of new business c.25%
Business model
Multi-channel distribution strategy
Market leader in product innovation and performance
New technology platform delivering efficiency and service gains
Brand
Customer focused and leveraging ILIM investment competence
10 Group OverviewRetail Life Sales
€m
350
317
300
238 Pension
250 227
197 Investments
200 178
152 Protection
150
Savings
100
50
0
2001 2002 2003 2004 2005 2006
11 Group OverviewRetail Life Products
H1 07 Total Retail Life Sales €208m, up 54% [H1 06: €135m]
Fund performance and SIPPs boost pension sales
Cross-selling to SSIA & current account customers
Mix Growth
% S%
Investments 34 +54
Pension 37 +67
Protection / Risk 14 +3
Savings 15 +114
H1 07 * APE basis
12 Group OverviewRetail Life Distribution
All distribution channels performing strongly
Increased bancassurance penetration
Up-skilling distribution for HNW and mass-affluent
Mix Growth
% S%
Bancassurance
• permanent tsb 29 +51
42%
• Institutions 13 +115
Direct Sales force 27 +37
Brokers / IFAs 31 +55
H1 07 * APE basis
13 Group OverviewRetail Life Market Share
%
25%
25
24%
23 22%
21%
21
20%
19%
19
17
15
2002 2003 2004 2005 2006 H1 07
14 Group OverviewIrish Life Corporate
Market position
Market leader with share of c. 48%
Dominates DC pensions and group risk markets
Business model
Intermediated business - consultants and top end brokers
Quality service delivery key competitive lever
Broadening distribution
Building on success with Cornmarket in public sector
Developing direct end customer relationships
15 Group OverviewCorporate Life Sales
€m
180 165
160
140 130 Defined Contribution
120 111
Protection / Risk
98
100 91
82 Defined Benefit /
80 Other
60
40
20
0
2001 2002 2003 2004 2005 2006
16 Group OverviewCorporate Life
H1 07 Total Corporate Life Sales €122m, up 24% [H1 06: €98m]
Increase in single premiums - annuities, PRBs, AVCs
Strong performance in protection / risk business
Mix Growth
% S%
Defined Contribution 69 +20
Annuities / Other 18 +22
Protection / Risk 13 +60
H1 07 * APE basis
17 Group OverviewCorporate Life Distribution
Sales €122m [H1 06: €98m]
Mix Growth
% S%
Consultants 47 +12
Cornmarket / Direct 30 +28
Brokers 23 +56
H1 07
* APE basis
18 Group OverviewCorporate Life Market Share
%
50 48%
45 42.6%
39.8%
40
36.5%
34.4%
35 32.2%
30
25
2002 2003 2004 2005 2006 H1 07
19 Group OverviewIrish Life Investment Managers
Market position
No.2 with over 25% market share
FUM of €35bn split 52% active and 48% passive
Business model
Asset manager for life businesses (48%)
Direct institutional business (52%)
Offers own funds and open architecture for specialist products
Performance
Top quartile performing active pension fund manager over 3 and 5 years
Flagship Consensus Pension Fund [passive] – largest unit-linked fund in Ireland
20 Group OverviewInvestment Management
Consistent growth in Funds under Management*
Growing market share
Active and passive fund management out-performance
€bn
35
36
31
30
25
24 Institutional
21
Life Company
18 17
14
12
6
0
2002 2003 2004 2005 2006 H1 07
* Excludes ILI
21 Group Overviewpermanent tsb
Market position
Focused on personal customers: not in business banking
Leader in residential mortgages with over 20% market share
Rapidly acquiring new customers via aggressive current account
strategy
Business model
Multi-channel distribution
Fully integrated bancassurance operation
Brand
Competitive, innovative and customer friendly
22 Group OverviewBank Loan Book
€bn
40
37.0
35 33.8
ROI Mortgages
30
26.3 UK Mortgages
25
Consumer Finance
21.1
20 Commercial
17.1
14.6
15 13.0
10
5
0
2001 2002 2003 2004 2005 2006 H1 07
23 Group OverviewBank Funding
Diversified funding strategy in place
Balanced mix of long / short term funding
Untapped €4bn mortgage pro-note facility with ECB, to increase to €6bn
Securitisation
8% Retail Deposits
18%
Long Term Commercial
Debt Deposits
30% 17%
IB/Repo
4%
Fr CD
ECP USCP 5%
12% 5%
€42bn Funding - mix at 30 June 2007
24 Group OverviewBank Credit Quality - LTVs
H1 07 2006 2005 2004
New Mortgage Lending % % % %
Home Loans
First Time Buyers 85 87 84 81
Second Time Buyers 57 58 61 60
Average 70 71 69 68
BTL / RIPs Average 67 68 65 65
Equity Release Average 54 51 51 49
Total New Lending* 65 66 64 63
* Weighted average
25 Group OverviewBank Credit Quality - Arrears
Residential Mortgages (Ireland)
000’s 000’s
12 200
No. of Mortgages (RHS)
190
10
180
8 170
160
6
No. in Arrears * LHS
150
4 140
2002 2003 2004 2005 2006 H1 07
* > 1 month
26 Group OverviewMortgage Market Share
%
25
21.8%
20% 20.8%
20 19.1% 18.7% 18.6%
15
10
2002 2003 2004 2005 2006 H1 07
27 Group OverviewBancassurance
y Highly productive and rapidly growing
y Accounts for almost 30% of Retail Life sales
y Successfully exporting model to other institutions
Mix
%
Investments 51
Savings 27
Protection 9
Pensions 13
H1 07
28 Group OverviewCustomer Acquisition
Total Current Account Numbers
000’s 42,000 Current Accounts in H1 07
450 35,000 new current accounts
400 7,000 upgrades
350 Account balances up 17% yoy
Cross-selling
300
Credit card sales up 16% yoy
250
Bancassurance to 22% of SSIA
200
holders
150
2003 2004 2005 2006 H107
29 Group OverviewCapital Home Loans
Market position
Only group business outside Ireland
Niche player in UK buy-to-let market, loan book of Stg£5.4bn.
Business model
Distributes exclusively through intermediaries
Competes on service quality and not price or credit
Loans securitised 12-18 months after origination
Performance
Very profitable business with excellent credit quality
30 Group OverviewAllianz-Irish Life
y IL&P [30%] joint venture with Allianz [65%]
y 2nd / 3rd largest P&C insurer in Ireland
y Business lines: Personal 49%, Commercial 36%, Religious 15%
Mix
%
Property 37
Motor 36
Liability 21
Other 6
31 Group OverviewFinancial Strength
y Bank risk asset ratio of 11.2%, all Tier 1 [June 2007]
y No hybrid equity or prefs
y Significant Tier 2 capacity to fund growth
y Life solvency capital requirement covered 1.7 times [June 2007]
y €200m perpetual debt raised in Life company in Q1 2007
y Ratings : Aa3 (Moodys) and A+ (S&P)
y Flexible capital position to fund rapid growth
32 Group OverviewFinancial Performance
€c €
180 EPS 13
140 11
NAV ps Operating Earnings (LHS)
Net Asset Value (RHS)
100 9 Dividend (LHS)
DPS
60 7
20 5
2001 2002 2003 2004 2005 2006
* IFRS basis (from 2004) for banking & Embedded Value basis for life business
33 Group OverviewSummary
y Strong Irish economy with highly attractive demographics
y Total focus on retail financial services in Ireland
y Leading market positions and franchises to maximise opportunities
y Low risk business model
y Targeting double digit growth over cycle
34 Group OverviewContact Information
Please contact our Investor Relations Department for any further
information or visit our group website at
www.irishlifepermanent.ie
Contact details:
Barry Walsh barry.walsh@irishlife.ie +353 1 704 2678
Orla Brannigan orla.brannigan@irishlife.ie +353 1 704 1345
Marie Gilsenan marie.gilsenan@irishlife.ie +353 1 856 3286
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