First Citizen Finance makes loss of €466,000 in 2016

Leasing firm expects stronger performance in 2017 after winding down car loans business

First Citizen Finance’s  deficit resulted from a car loan collection business it ran for Consumer Auto Finance Receivables. Photograph: Willie Thomas

First Citizen Finance’s deficit resulted from a car loan collection business it ran for Consumer Auto Finance Receivables. Photograph: Willie Thomas

 

Leasing specialist First Citizen Finance lost €466,000 in 2016 as it wound down a car loans business, but expects a stronger performance this year on the back of a change in focus.

First Citizen raised €70 million from US-based Magnetar Capital this year. The deal involved selling a 66 per cent stake to the investor for €28 million and borrowing a further €42 million that will allow the Irish company to lend direct to clients from its own balance sheet.

Figures just filed with the Companies’ Registration Office show that it lost €466,236 last year. The deficit resulted from a car loan collection business it ran for Consumer Auto Finance Receivables.

Chief executive, Chris Hanlon, said that the loss was expected. As borrowers repaid the loans, the balances due on them fell, reducing the company’s fees, he explained.

He pointed out that First Citizen had changed this year from servicing lenders to lending in its own right and that this would be reflected in future accounts.

Once-off charges

Mr Hanlon noted that this year’s accounts would show a loss resulting from a number of once-off charges linked to the change in the business. “But it will be clear sailing from 2018 on,” he said.

A former chief executive of Permanent TSB Finance, one of the biggest consumer lenders in the Republic, Mr Hanlon set up First Citizen in 2012.

It focuses on leasing and finance in four key areas: cars, agriculture, equipment and more recently, commercial real estate.

Mr Hanlon said that it was currently looking at transactions with a total value of €30 million to €40 million and added that the company should make an impact in this area next year.

Its 2016 figures showed that net assets grew to €148.3 million on December 31st last year from €97.3 million 12 months earlier.

This was on the back of an increase in loans receivable from clients to €141.7 million from €89.5 million over the same period.