Mortgage servicer Pepper Finance sees Irish profits drop despite big revenue rise

Latest accounts show firm returned pretax profit of €11.8m in 2022, down from just under €14m in previous year

Pepper Finance has been told by a court to apply a 2.5 per cent fixed rate to the mortgage of a distressed borrower for the next 25 years.

Profits at Pepper Finance, the mortgage services provider used by several investment funds and banks to manage Irish loan books, fell last year in spite of a substantial rise in revenues.

This was due to costs associated with an increase in staff numbers as it took on additional loan mandates.

Latest accounts for Pepper Finance Corporation (Ireland) show that it made a pretax profit of €11.8 million last year, down from just under €14 million in 2021.

This was despite an increase in revenue to €59.1 million from €54.5 million a year earlier. The company’s administrative expenses increased in the period by almost €7 million to €48.6 million, with its payroll costs rising by €4 million to just under €35 million.


There was also a sharp rise in directors’ remuneration to €1.38 million from €897,066 in 2021.

Employee numbers increased to an average 579 in the year, up from 477 in 2021. The majority of roles are based at Pepper’s offices in Shannon, Co Clare.

The accounts also note a dividend payment by the Irish company in February 2023 of €5.7 million, ultimately to a UK-registered entity called Pepper Advantage Ltd. This money had been received by the Irish business from one of its own subsidiaries.

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At the end of 2022, Pepper was servicing more than 100,000 residential and commercial loans. Its biggest new mandate of late was a portfolio of loans received from PTSB earlier this year that the bank had acquired from Ulster Bank, which has exited the Irish market.

Client assets under management at the year-end amounted to €24.7 billion, an increase of €6.3 billion on the previous year.

The rates charged on loans managed by Pepper have come under the spotlight recently amid rate hikes by the European Central Bank. Earlier this month, a Cork couple launched a High Court action over what was described as “out of proportion” and “unfair” high rate of interest they claim they are being charged on their mortgage.

The court heard that Pepper acquired the couple’s mortgage, which was originally taken out with PTSB over their home. They claim Pepper is charging them a rate of 8.5 per cent interest, whereas had their loans remained with PTSB they would be paying just over 4.3 per cent. The case was adjourned to a later date.

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times