Finance Ireland profits almost triple amid release of loan loss provisions

New mortgage lending at the largest nonbank lender in the State nearly doubles to €552m

Finance Ireland, the largest nonbank lender in the State, saw its pretax profits almost triple last year to €28 million as it released some unused provisions taken at the height of the Covid-19 crisis for potential loan losses.

The profit figure was up from €9.64 million recorded in 2021. Finance Ireland, led by chief executive Billy Kane, freed up €4 million of loan provisions last year, equating to 29 per cent of the €13.7 million it set aside in 2020 for possible loan losses.

New lending jumped 54 per cent last year to €1 billion, with new mortgage lending soaring 95 per cent to €552 million. The car finance division, First Auto Finance, wrote €205 million of new business, up 4.6 per cent on the year, despite several months of limited market activity due to the pandemic and the impact of global chip shortages coupled with a reduction in the supply of secondhand cars in the Republic.

New commercial property loans rose 65 per cent to €165 million, while the SME leading and agri-finance divisions saw their combined new lending rise over 10 per cent to €85 million.


“While we are conscious of the economic challenges arising from sharp increases in the cost of living, and energy prices in particular, the Irish economy has demonstrated exceptional resilience both during and after the pandemic and we remain confident about the opportunities that exist,” Mr Kane said.

Finance Ireland secured a new UK investor, M & G, in July to help buy out the Ireland Strategic Investment Fund’s 33 per cent stake and back a €50 million equity fundraising. The series of transactions, which also saw a group of long-standing investors and management sell shares, valued Finance Ireland at about €255 million, including money raised in the equity raise. US investment giant Pimco, which first acquired a stake in Finance Ireland in 2015, upped its investment as M & G came on board. The two firms now own 90 per cent of the lender.

The fresh capital was earmarked for Finance Ireland’s future growth and expansion, including the continued growth of its car finance business. The company moved car finance on to its own balance sheet earlier this year to maximise its growth potential. It previously used funding from UK merchant banking group Close Brothers for this business.

“2021 was a record year for the group and demonstrates the ongoing strong demand from businesses and consumers for a fresh approach to lending. Despite the ongoing impacts of Covid-19, the business performed strongly and our capital raising in 2022 leaves us exceptionally well placed to fund continued growth across the business,” said Mr Kane.

Finance Ireland said that it employs 170 people, up from 150 a year ago. The remuneration of the group’s highest-paid director, believed to be Mr Kane, jumped 80 per cent last year to €841,404.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times