Finance Ireland CEO Billy Kane has backed off acquiring loan portfolios from Ulster Bank as the Natwest-owned bank prepares to depart the Irish market.
he veteran banker, whose firm has a portfolio of €1.8bn of loans, told the Irish Independent that a deal between Finance Ireland and Ulster Bank is “highly unlikely” due to incompatible scale.
Mr Kane expressed an interest in acquiring Ulster’s equipment leasing arm, Lombard, in February when Natwest announced the bank would be exiting Ireland.
However, Finance Ireland is not actively pursuing a deal for the business. Moreover, Permanent TSB is in discussions over Ulster Bank’s SME banking business, which includes Lombard.
“That was a very casual comment,” Mr Kane said.
“If you look at our portfolio, what we have is a very large car finance business and a relatively small SME leasing business. We previously bought the Lombard non-performing loan book back in 2012...so we knew that part fairly well. I was just expressing that, if it was available.
“It would be too small to break out of the generality of what they're doing with PTSB, so I suspect that that would be highly unlikely to happen.”
Finance Ireland has done deals for loan books in the past, but nothing on the scale involved in the Ulster Bank carve-up, which involves the disposal of approximately €20bn of assets.
Read More
The non-bank lender entered the mortgage market in 2018 with the purchase of a €200m portfolio of performing loans as part of its acquisition of Pepper Money, a mortgage origination business.
The company is now trying to grow its market share in mortgages with the introduction of Ireland’s first 20-year fixed rate product – double the term of any other mortgage in the market.
Finance Ireland is looking to originate €300m to €450m of mortgages per year via the broker channel, which currently makes up 30pc of the €10bn market.
Having achieved substantial scale in the 10 years since a post-crash restructuring, Finance Ireland was on the verge of €160m initial public offering when Covid hit.
Mr Kane sees an opportunity to expand the company’s lending footprint with the exits of Ulster Bank and KBC,
“We have very ambitious plans to grow the business,” he said.
“We see opportunities in the Irish market. Ulster is leaving. Well, where do we interface with Ulster?
"Lombard do business in garage forecourts – we do, too. We’d like to replace them there.”
