Finance Ireland to revisit IPO in late 2022 at earliest

Non-bank lenders seen to benefit as Ulster Bank and KBC Bank Ireland quit the Irish market

Billy Kane: “Business last year, considering the state of the economy, ended up being very good.” File photograph: Bryan James Brophy

Billy Kane: “Business last year, considering the state of the economy, ended up being very good.” File photograph: Bryan James Brophy

 

Non-bank lender Finance Ireland will look at floating on the stock market in the second half of next year at the earliest, according to chief executive Billy Kane.

The company was forced to abandon plans for a €100 million-plus initial public offering (IPO) in May 2020 as the rapid spread of Covid-19 globally threw equity markets into turmoil.

“My hope is that the Irish economy will come out of the blocks in the second half of this year. But it will be late 2022 at the earliest before we look at an IPO, when hopefully things have settled. It could run into 2023, but it all depends on economic and market conditions at the time,” Mr Kane told The Irish Times.

While central bank actions to pump trillions of euro into financial markets in the past year have driven a strong rally by equities , and fuelled IPOs globally, the Dublin market has not seen a flotation since Uniphar, a pharmaceuticals wholesaler and retailer, came to the market in July 2019.

Finance Ireland’s loan book spans leasing finance to small and medium-sized enterprises (SMEs); motor finance; agri-lending; commercial property loans; and, since late 2018, home loans – after it bought Pepper Money’s €200 million home loans portfolio and mortgages platform, with UK asset manager M&G Investments providing the funding.

The State’s Ireland Strategic Investment Fund (ISIF) and US investment giant Pimco each hold 31 per cent stakes in the company.

“Business last year, considering the state of the economy, ended up being very good,” Mr Kane said, noting that mortgage lending and auto-finance jumped from last summer after the first national Covid-19 lockdown.

SME lending, which had been muted in recent years as businesses fretted about Brexit, has rebounded strongly in the wake of the UK-EU trade deal, he said. “Momentum in general is very positive, though commercial mortgage activity remains low,” he said.

The company has not yet published figures for 2020. It saw its new lending jump 62 per cent to a record €793.8 million in 2019 before the coronavirus pandemic, with pretax profit rising by 34 per cent to €14.1 million.

Three companies

Analysts say that non-bank lenders like Finance Ireland, Dilosk and Spanish-owned Avant Money stand to benefit as the number of retail banks in the market is set to shrink from five to three companies, with Ulster Bank and KBC Bank Ireland having announced in recent months that they plan to exit the market.

Finance Ireland traces its roots back to 2002 when Mr Kane, a former chief executive of Irish Permanent, set up a company called Shared Home Investment Plan (Ship), which offered an equity-release product in Ireland for seniors. The company secured a stock-market quotation in 2006 through a reverse takeover of publicly quoted Ardent and was subsequently renamed Finance Ireland.

The business made a brief entry into Irish subprime mortgage lending before the property crash. Finance Ireland delisted from the Dublin and London markets in 2008 and stopped writing new business in 2009.