Finance Ireland, the largest non-bank lender in Ireland, has accused mainstream banks of engaging in “predatory pricing” by using cheap deposits to keep their mortgage rates low and stifle competition from alternative lenders. The CEO of Finance Ireland, Billy Kane, stated that the company’s mortgage activity has been minimal in the past year due to increased borrowing rates, as its own funding costs rose. While Finance Ireland’s five-year fixed mortgage rate is 6.05%, Bank of Ireland and AIB offer the same product at approximately 4.8%. Despite this, Finance Ireland’s overall loan portfolio increased by 32% in 2022. However, Kane believes that the company will not fully re-enter the mortgage market until the second half of next year.
Kane criticized the dominance of three major banks, which control 96% of the market, stating that it is not in the long-term interest of consumers. He expects either the mainstream banks to increase mortgage rates further or for funding for non-bank lenders to become more accessible due to central bank reductions. Finance Ireland’s parent company, FICS Group Holdings, revealed that its commercial real estate business provided €209 million of new loans last year, resulting in a loan book of €500 million. The motor business of Finance Ireland is performing well, with €249 million of finance issued last year, and it refinanced €250 million of such loans in the bond markets recently.
Finance Ireland had new mortgage lending of €715 million last year, driven by activity before the European Central Bank started increasing rates. The company’s pretax profit for 2022 was €15 million. M&G from the UK and Pimco from the US currently own 90% of Finance Ireland, following changes to its investor base.
