Bank of Ireland is to pull out of its US leveraged acquisitions finance business, exiting a business that had accounted for the bulk of a €137 million bad loan provision in its most recent results.
The lender will run down its loan book over the next three years or so, it said in a statement. The book was worth about €1.2 billion at the end of 2025, having had an average value of €1.6 billion throughout the year, it added.
“The group recently completed a strategic review of its US Leveraged Acquisition Finance business and has decided to exit the business, in line with its disciplined approach to capital allocation,” it said.
The move comes after the bank saw its overall impairment charge increase from €50 million to €137 million during the first six months of 2025, driven by “the emergence of new defaults in corporate portfolios, primarily the US Acquisition Finance portfolio,” it said in July.
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The loan book is not expected to be sold off, with a wind down the most likely option.
“The review concluded that the market for leveraged acquisition finance in the US has structurally changed in recent years primarily driven by the increasing role of private credit providers with a consequent reduction in fee opportunities,” the bank said. “These structural factors impact on the profitability of this business and its ability to generate commercial returns.”
The private credit market has exploded in the US in recent years, increasing from about $2 trillion (€1.69 trillion) in 2020 to $3 trillion at the end of 2025, according to Morgan Stanley. It is expected to grow to as much as $5 trillion by 2029 as non-bank lenders such as private equity firms expand rapidly into the market.
The move only applies to the acquisitions finance business, Bank of Ireland said. The rest of its US business is not impacted.
