Domestic Irish banks have been behind less than half of loans to households and businesses over the past seven years, according to a new Central Bank study, highlighting a broader and less concentrated credit landscape than mortgage market share figures alone suggest.
While AIB, Bank of Ireland and PTSB accounted for 64 per cent of loans to households since 2019, driven by home loans, they extended only 31 per cent of credit to non-households, according to the data. They were behind 45 per cent of all loans.
Foreign banks were behind 58 per cent of loans to businesses, while non-bank lenders (NBLs) accounted for 11 per cent of activity, the report showed. The paper’s authors reported 20 foreign banks active in the market, either through Irish-based subsidiaries or passporting arrangements from other EU countries.
Still, the three domestic banks tightened their grip on mortgage lending – the most widely cited barometer of market competition – over the period, after the exits of Ulster Bank and KBC Bank Ireland from the market. They accounted for 88 per cent of such loans, according to the data.
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The Irish banks were behind only 1 per cent of commercial mortgages and 11 per cent of syndicated loans – which are offered by a group of banks – to corporates.
Credit unions had a leading, 46 per cent share of loan activity in consumer credit, including asset finance, but accounted for only 1 per cent of home loans. Still, the head of the Irish League of Credit Unions (ICLU) said last week that the sector has its sights on securing 10 per cent of annual mortgage lending in the coming years.
“The Irish loan market is a diverse ecosystem comprising domestic banks, foreign banks, credit unions, and a heterogeneous set of non-bank lenders,” said the paper, written by senior Central Bank economists Roman Goncharenko and Elizaveta Lukmanova.
“Focusing exclusively on domestic retail banks may result in an incomplete assessment of market structure.”
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The report is based on data from the Central Credit Register covering all term loans issued between 2019 and 2025. The register records all loan contracts for in excess of €500 million.
Graphs in the report indicate that the three domestic banks’ share of household lending dipped by a few percentage points over the six years, while their non-household lending share rose marginally.
Meanwhile, a move by mortgage and consumer lender Avant Money last year to become a bank branch of its Spanish parent, Bankinter, resulted in its reclassification into the foreign bank category for household lending.
The paper said that there was no meaningful difference in pricing of mortgages between banks and non-banks over the six year period as a whole, reflecting a “highly standardised residential mortgage market”.
“In contrast, consumer credit and firm lending carry a significant non-bank premium – ranging from approximately 1.8-1.9 percentage points for consumer credit and 1.6-2.8 percentage points for non-households,” the authors said.
“We argue that these premiums likely reflect non-price dimensions of competition: despite a structural cost-of-funding disadvantage, non-banks appear to compete by offering contractual flexibility, speed and product specialisation that regulated domestic banks may not always replicate.”
The report also dispels a perception that non-bank lenders act “merely as a temporary stopgap for distressed firms”, saying: “The average duration of borrowing relationships with non-bank lenders is comparable to that of domestic banks, indicating that firms view these lenders as long-term financing partners.”
“We find no evidence in the overall sample that NBLs systematically serve weaker or riskier firms relative to banks,” it said, adding that roughly 40 per cent of small- to medium-sized enterprises (SMEs) borrow from multiple lender types, typically combining a core domestic banking relationship with non-bank credit.
