Irish Life & Permanent Group Holdings Plc (Financial Management)

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EXECUTIVE SUMARRY

Whether or not the global downturn is over, one should attest to the fact that the world economy is rapidly changing. And the banking sector is currently focused on adapting to the changed market environment. Irish Life & Permanent Group Holdings plc is being known as one of the leading providers of personal financial services in the Irish market. This paper has been compiled to bring a clear and an unbiased view of the company’s key strengths and weaknesses and the potential opportunities and threats. On the basis of comprehensive environmental analysis of Irish Life & Permanent, an in-depth strategic analysis of the company’s businesses and operations is provided and elaborates further strategic choices for the company.

BRIEF HISTORY OF THE COMPANY

Irish life and permanent group holdings PLC (ILPGH) is one of Ireland’s largest companies within personal financial services sector, focusing specifically on retail banking, insurance and investment services. Irish Life and Permanent is the result of merger between Irish Life Assurance and the Irish Permanent Building Society, which took place in 1999. To drive change in this merger, Irish Life Assurance & Permanent pursued a centralized IT infrastructure strategy, which ensure the group IT function provide infrastructure and IT support to each of the individual business units. However, instead of anticipated cost savings the IT function get distracted by data centre consolidation and system integration, and lose sight of the quality of service it provided to business ‘customers’. In order to address augmenting customer dissatisfaction, Irish Life Assurance & Permanent executives launched a service management strategy. This strategy has brought fruitful results, but unlike their main competitors, Irish Life Assurance & Permanent did not spend bailout capital from the government in full swing of financial crisis in 2008. Now Irish Life Assurance & Permanent has over one million customers in its home country and annual revenues of around €880 million (Group Strategy) The group offers its retail banking services under the Permanent TSB brand, life assurance and pension services under the Irish Life Assurance brand, fund management under the Irish Life Investment Managers brand, and general insurance through its associate company, Allianz. The group is headquartered in Dublin, Ireland.

(See Appendix 1 for history of individual company)

THE STRATEGIC POSITION OF THE COMPANY

THE MACRO-ENVIRONMENT

In order to analyse the macro-environment Irish Life Assurance & Permanent operates in, it is essential to make a PESTEL analysis. It helps to figure out and estimate the main factors in Political, Economic, Social, Technological, Environmental and Legal spheres which have the crucial impact on the company’s operations as a whole but are out of their direct control. Since the personal financing sector is very much influenced by changes taking place in the world and has undergone rapid and dramatic changes during the last decades, this analysis is especially important for Irish Life Assurance & Permanent.

POLITICAL

In 2006, the Irish Government established a not-for-profit company, the Social Finance Foundation (limited by guarantee and having no share capital) to act as a wholesale supplier of funding for social finance. Therefore, it is expected more projects at community level and more micro-enterprises benefiting from the support of the Foundation over the coming years (Social Finance Foundation, 2010).

In September 2008, The Government Guarantee Scheme was introduced, which requires the institutions concerned to work with the Irish Banking Federation to submit bi-annual reports on goals and targets set down in relation to the delivery of the National Payments Strategy, which will help regulate financial market and pull this sector out of downturn (Third Report on Corporate Social Responsibility, 2010).

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