Dutch fintech Bunq has applied to the Central Bank of Ireland for authorisation to passport its banking services into the Irish market.
The Dutch group is set to become the first European digital bank to offer mortgages in its local market, having teamed up with lending platform Tulp to offer such loans in 2022.
This comes as it formally completed its acquisition of Irish SME non-bank lender Capitalflow on November 30th, following approval by its domestic regulator. The move will give the Dublin-based business increased firepower to lend to micro and small businesses here.
Speaking to The Irish Times, Capitalflow’s chief executive, Ronan Horgan, said the deal would give his business access to cheaper funding and enable it to expand its loan book to potentially €1.2 billion within the next three years.
Capitalflow expanded its workforce this year from 20 to 70 staff and has plans to add another 50 roles over the next three years.
“We have seen a considerable increase in demand for funding from Irish SMEs in the construction, distribution, rental, retail and manufacturing sectors in recent times,” Mr Horgan said. This merger is excellent news for our customers as . . . access to Bunq funds means we can offer them cheaper borrowing.
“Bunq is Europe’s leading digital bank and its capabilities will allow Capitalflow to continue to digitise our business model.
“Through this innovation, we will grow our business while keeping our costs down, ensuring we are well-positioned to challenge larger, more traditional banking institutions, creating a more competitive marketplace for Irish businesses looking to finance growth.”
Bunq founder Ali Niknam said he was “truly excited” to complete the Capitalflow deal. “Together, we look forward to expanding the bank . . . across Ireland and the rest of Europe,” he said.
Latest accounts for Capitalflow Holdings show that its total income rose by 22 per cent to €27.9 million last year while its earnings before interest, tax, depreciation and amortisation increased by 29 per cent to €14.9 million.
However, it made a pretax loss of €4.3 million, largely due to an increase of more than €3 million in its loan impairment charge. Its loan levels fell by 5 per cent to €315 million.
Mr Horgan said the company had its busiest-ever month in November with €10 million of new business recorded, in spite of Covid continuing to restrict parts of the economy.