www.reuters.com/article/2011/03/30/...ks-idUSLDE72T08620110330
Kein Handel bis Freitag
UPDATE 1-Irish Life suspends shares ahead of stress tests
Wed Mar 30, 2011 2:51am EDT
* Shares suspended after 44 pct fall on Tuesday
* Company says will make statement after Thursday's tests
DUBLIN, March 30 (Reuters) - Bancassurer Irish Life & Permanent (IPM.I) suspended trading of its shares in London and Dublin on Wednesday after media reports that crunch stress tests this week might force it into state control.
A banking source confirmed on Tuesday that Irish Life, until now the only domestic lender to avoid a state bailout, will be hit hard by the stress tests, which are honing in on potential losses in Ireland's residential mortgage market. [ID:nLDE72S1DV]
The banking source declined to say how large a stake Dublin may take in Irish Life, but shares fell 44 percent on Tuesday to 40.5 euro cent after Irish media speculated the results would force the bancassurer into state control.
"The Central Bank expects to announce the results for all the banks involved on Thursday evening March 31st and a full statement will be issued by the Group on foot of that announcement," Irish Life said in a statement. It said shares would be suspended until Friday.
Irish Life's banking arm, permanent tsb, borrowed heavily to fund home loans and with around 60 percent of its mortgages tied to the European Central Bank's (ECB) record low base rate its assets are a huge drain on the group.
Irish Life has avoided falling into state control until now because of its cash-rich life insurance arm and its lack of exposure to the commercial property market.
Bank of Ireland, AIB, Irish Life and EBS have been frozen out of debt markets, lost over 20 billion euros in deposits and seen a spike in mortgage arrears since the last stress tests were conducted in early 2010.
AIB and EBS are already in state control while Dublin holds a 36 percent stake in Bank of Ireland.
Despite an 85 billion euro bailout from the EU-IMF late last year, Ireland has failed to persuade investors that it can afford to bail out its banks, which have already swallowed 46 billion euros in state capital.
The latest stress tests, set to be released at 1530 GMT on Thursday, are designed to ensure the four so-called viable lenders -- Bank of Ireland (BKIR.I), Allied Irish Banks (ALBK.I), Irish Life & Permanent (IPM.I) and EBS Building Society [EBSBS.UL] -- are bullet proofed against further shocks. (Writing by Conor Humphries; Editing by Jon Loades-Carter)