First Citizen reports 2020 loss as it weighs mortgage market entry

Rival Dilosk sees consildated loans more than double to €566m, new figures show

Covid bad loan provisions and the cost of payment breaks pushed First Citizen Finance to a net loss of €3.67 million last year.

Covid bad loan provisions and the cost of payment breaks pushed First Citizen Finance to a net loss of €3.67 million last year.


First Citizen Finance, one of the largest non-bank consumer finance firms in the State, swung to a net loss of €3.67 million last year as it increased provisions for bad loans during the Covid-19 crisis and absorbed costs associated with customer payment breaks.

The Dublin-based company, established by Chris Hanlon in 2012 when he led a management buyout of Permanent TSB’s (PTSB) car finance business, originates, manages and services leasing and credit finance portfolios in the motor, agriculture, SME equipment and commercial real estate sectors.

Its consolidated total portfolio, including loans refinanced in international bond markets in which it retains an interest, grew 12 per cent to €436.2 million last year, according to its latest annual accounts, filed with the Companies Registration Office, even though it paused commercial property market lending for much of 2020 due to the Covid-19 crisis.

Mr Hanlon confirmed to The Irish Times that the group is looking at getting into mortgage lending and is in talks with overseas funders to finance a potential offering, taking advantage of the planned exits of Ulster Bank and KBC Bank Ireland from the market. The two departing lenders accounted for about 25 per cent of new mortgages last year.

“I think by the end of March we’ll be able to give a pretty good steer as to whether we will be getting into this part of the market,” Mr Hanlon said. “If we decide to enter, we’d be looking to do about €1 billion of lending over three years.”

Mr Hanlon, who first told the Irish Independent earlier this week that First Citizen was assessing the mortgage market, declined to identify potential funders with which the company is in talks. Non-bank lenders typically refinance portfolios of mortgages in the bond market, through a process known as securitisation, once they have built of a book of scale, typically in excess of €200 million.

Initial funder

Deutsche Bank has been an initial funder of First Citizen car loans, while it works with BNP Paribas in agriculture and SME equipment lending, and NatWest in commercial real-estate.

It is highly unlikely that First Citizen is in talks with NatWest on mortgage lending, given that it owns Ulster Bank.

Separately, Dilosk, the non-bank mortgage lender, reported that its consolidated loans rose to €566 million at the end of last year from €251 million a year earlier.

The company, which bought the ICS Mortgage brand and platform in 2014 from Bank of Ireland and ventured into owner-occupier home loans in 2019, expects to write €450 million of mortgages this year, compared to about €200 million in 2020, chief executive Fergal McGrath said in October.

The company has also set its sights on doubling its share of a growing Irish mortgage market to 10 per cent within three years, as it also seeks to capitalise on the exits of Ulster Bank and KBC. Dilosk’s group net profit fell to €672,822 last year from €5.72 million in 2019.