Tags: Irish Life Plunges as Group to Split | State Control Looms

Irish Life Plunges as Group to Split, State Control Looms

Friday, 01 Apr 2011 12:23 PM

Irish Life & Permanent Plc, which is selling its life assurance and fund management unit to raise funds, fell 59 percent after the state said it may take control of company.

Irish Life plunged as much as 73 percent in Dublin trading, the biggest drop since at least 1994, after the Irish central bank yesterday told the company to raise 4 billion euros ($5.7 billion) following stress tests.

Irish Life was caught in the “cross fire” of measures to rescue the nation’s banking system, said Gerry Hassett, chief executive of of Irish Life & Permanent’s Irish Life retail unit. In all, four lenders have to raise 24 billion euros as the government tries to draw a line under Europe’s worst banking crisis.

Irish Life plans to list its assurance unit in Dublin and London through a share sale, Hassett said in an interview with Dublin-based broadcaster RTE today. The company had been the only lender to avoid a state bailout prior to yesterday’s announcement.

Bank of Ireland Plc surged as much as 36 percent as the country’s largest lender outlined plans to avoid majority state control after being ordered to raise 5.2 billion euros. Allied Irish Banks Plc, the country’s second-largest lender which needs to raise 13.3 billion euros, fell as much as 25 percent.

Irish Life fell 24 euro cent to 17 cents in Dublin, while Bank of Ireland rose 42 percent to 31 cents.

“Only Bank of Ireland retains a reasonable prospect of recreating” a case for investors “in the near term,” said analysts including Emer Lang and Stephen Lyons at Dublin-based securities firm Davy in a note to clients today.

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