IL&P shrinks headcount by 550, targets €22m in payroll savings
Irish Life & Permanent's (IL&P) €51m first half loss was worse than most analysts predicted. Although it's expecting the second half to be marginally better, the firm is still keeping a close eye on expenses and is seeking save €22m on staff costs in 2009.
Headcount has shrunk by 12% - or 550 - over the last 12 months, the bank revealed in its interim statement today "through a range of initiatives", according to its CEO Kevin Murphy.
These initiatives include the 70 redundancies announced at its buy-to-let mortgage business, Capital Home Loans, last October and the 150 employees within its retail banking unit, permanent tsb, believed to have taken up the offer of up to €35k to for a sabbatical of 2-3 years.
Murphy also said: "We have announced a new proposal which will generate payroll savings of €22m in 2009. We are currently in discussions with the representative bodies on this agenda. And finally, we have maintained a relentless focus on minimising our overheads in this very tough cost environment."
More promisingly, the bank has ruled out selling any of its bad loans to NAMA, which obviously could be tough on it the short-term, but would make the predicted redundancies through industry consolidation seem less likely.
It could even bolster its prospects for becoming the "third force" in banking that the government has said it wants in addition to AIB and Bank of Ireland.
"We've gone through the portfolio and we don't have development loans and don't think we have any assets that are capable of going into NAMA," said David McCarthy, IL&P's chief financial officer.
The bank pins the €51m loss on mortgage customers falling behind on their payments as well as a 43% slump in demand for its life and pensions products.
