AUDITORS TO Irish Life and Permanent raised issues around material economic, political and market risks in its 2010 annual report, which may cast doubt on its ability to continue as a going concern.
Accountants KPMG inserted “an emphasis of matter” clause in its auditor’s report.
Such a clause is included where there is “significant uncertainty” around certain issues that merit a particular mention in the report.
The inclusion of this type of clause is unusual in the accounts of a financial institution.
KPMG said the annual report set out “a number of material economic, political and market risks and uncertainties that impact the Irish banking system”.
The auditors said that this “may cast doubt upon the group’s ability to continue as a going concern”.
These included the group’s “continuing ability” to access funding from the European and Irish central banks to meet liquidity requirements and its ability to raise additional capital to meet the required regulatory capital ratios.
“These matters, together with the options available to the group, have been considered by the directors in concluding that it is appropriate to prepare the financial statements on a going concern basis,” said the accountancy firm.
A company spokesman said that its auditors were “merely echoing the fact that the company itself has highlighted a number of issues relevant to the broader Irish banking system at present and relevant obviously to the group”.
He said the group was the only Irish lender not to receive Government capital and that it did not have to participate in the National Asset Management Agency.
“We believe it was prudent to point to the wider issues for the sector at present which impact on all Irish financial institutions.”
Irish Life and Permanent is one of four lenders to undergo liquidity and capital stress tests by the Central Bank, the results of which will be published on March 31st.
The company received €3.6 billion in deposits from Irish Nationwide Building Society last month but its banking unit, Permanent TSB, remains the worst-funded Irish bank. It has twice as many loans as deposits, the highest ratio among the domestic lenders.
