Latest news with #FinanceIreland


RTÉ News
19-05-2025
- Business
- RTÉ News
Switching could save mortgage holders €7,300
New figures show that the average new mortgage drawn down has surged by 82% over the past decade. The latest Mortgage Switching Index shows that mortgage drawdowns have soared from €189,940 in 2015 to €341,078 in the first three months of this year. said the jump reflects an equivalent increase in the country's escalating property prices and it also means that any shift in interest rates is now having a dramatic financial impact on borrowers. The online broker noted that for switchers, the gap between the market's highest and lowest rates now exceeds €7,300 and the gap between the highest and lowest mortgage rates in the market now stands at 3.15%. For a borrower with the average mortgage of €341,078, this equates to a saving of €611 per month - or over €7,338 per year by switching from the highest to the lowest rate. also noted that despite a rebound in switching, which was up 77% year on year in March, activity remains well below 2022 levels. Martina Hennessy, the CEO of said that mortgage holders who remain loyal to their original lender - often one of the main pillar banks - could be missing out on tens of thousands of euro in savings by not exploring more competitive alternatives. "There has been a lot of change in the mortgage market over the last 18 months, competitiveness has improved with two new lenders entering the market and significant rate cuts," she said. Today's index also highlights a shift in borrower behaviour, with over 20% of new mortgages in 2024 drawn down on variable rates, compared to under 10% in 2022, which the online broker said reflected greater confidence that rates will remain stable or fall further. An average variable rate on the Irish market is 4.15%, but they range from 3.75% up to 5.65% "As a result of this shift, we have seen real product innovation this year with the introduction of a new benchmarked variable product," Ms Hennessy said. "Avant Money's Flex Mortgage product is benchmarked to the 12-month Euribor rate and currently starts from 3.04%, and offers a huge opportunity for mortgage holders who have a preference for a variable rate to switch and save," she noted. She said that Finance Ireland recently announced that they are stopping new mortgage lending, meaning many of its existing customers are now rolling off low fixed rates onto some of the highest rates in the market. "Mortgage holders rolling out of fixed rates with Finance Ireland certainly need to assess market options. With no new mortgage lending proposition in place and servicing transferred to a third party, there is little incentive for rate competitiveness," Ms Hennessy cautioned. She also noted that Bank of Ireland and AIB are focused on the green mortgage space with their most favourable rates offered to those with A energy ratings. But Martina Hennessy said that the majority of homes in Ireland do not meet the BER threshold to avail of lower green rates. She also said that the market has become more competitive for those who are not eligible for a green rate but who have built up equity in their home and they can still secure the lowest market rate, which is currently 3%. Ms Hennessy said that with nearly 700,000 home mortgage in Ireland and large numbers still on uncompetitive rates, the opportunity for mortgage holders to save by switching remains substantial.

Irish Times
09-05-2025
- Business
- Irish Times
PTSB chief praises takeover target Finance Ireland at historically short AGM
PTSB chief executive Eamonn Crowley has said Finance Ireland 'is a fine business', but declined to comment on the bank's bid approach for the nonbank lender. The Irish Times reported last month that PTSB made an unsolicited overture late last year to buy the largest nonbank lender in the State, run by Billy Kane, a former chief executive of Irish Permanent, a precursor of the bank. While PTSB is known to remain interested in doing a deal, there is said to be a wide gap between both sides on price expectation. 'We're not going to comment on Finance Ireland, but just to say that it is a fine business. We know Billy Kane quite well,' Mr Crowley said in response to reporters' questions, after the bank held its annual general meeting in Dublin. 'It's a business that is complementary to what we do.' READ MORE Finance Ireland reported a day earlier that its pretax profit jumped 95 per cent last year to €20.3 million as lending grew and funding costs for the sector declined. Its total new lending rose 19 per cent from 2023 to €646 million. Customer loan balances increased by 14 per cent to €1.2 billion, comprising car, commercial real estate, agri and small business loans. The bank decided in March to get out of mortgage lending, a business it had entered in 2018. Industry sources have suggested PTSB would have to pay in excess of €300 million to get Finance Ireland's owners to agree to see. The business is 51 per cent-owned by US investment management giant Pimco , which is said to not be in a rush to sell. London-based investment company M&G owns almost 40 per cent, with the remainder held by management. Sretaw, an investment owned by businessman Eamon Waters that has a 7 per cent in PTSB, told The Irish Times last month Finance Ireland would find it hard to command a valuation far above €100 million if it were a listed company – unless recent results and the future business plan 'show a step change in prospects'. PTSB's agm lasted less than 20 minutes, the shortest such meeting for a listed Irish bank in recent memory, with only two shareholders questions coming from the floor. Chief financial officer Barry D'Arcy said the bank remains on track to make a submission to the Central Bank by the end of June seeking to lower the perceived riskiness of its mortgage book for the purpose of calculating how much expensive capital the bank must hold. Bank of America analysts have estimated PTSB could free up €270 million of capital on its balance sheet as a result of a recalibration of its models. RBC Capital Markets estimates it could release a little over €200 million. Mr Crowley reiterated that the bank is hoping to return to paying dividends next year for the first time since before the financial crisis. This could pave the way for the State, which continues to own 57 per cent of the bank, to go about reducing its stake in the bank. 'Our job is to ensure we have the products and the results that are attractive to investors,' said Mr Crowley. 'A key part of any investment play is to see the bank paying dividends and making a return to investors.' PTSB said last week that its share of new mortgage lending rose to more than 20 per cent in the first quarter of the year, and that it has made 'a good start to 2025' even as the global economy dealt with mounting uncertainty. Mortgage lending marked a significant improvement from 13.4 per cent in the same period last year, and the 16.4 per cent rate for 2024 as a whole. Mr Crowley said that new lending in its relatively small business banking unit was up 25 per cent on the year, with small-to-medium-sized enterprise activity 'having a particularly good start to the year'.


Irish Times
08-05-2025
- Business
- Irish Times
Finance Ireland pretax profit almost doubles to €20.3m
Finance Ireland, the State's largest nonbank lender, reported on Thursday that its pretax profit jumped 95 per cent last year to €20.3 million as lending grew and funding costs for the sector declined. The company, led by chief executive Billy Kane, said that its total new lending rose 19 per cent from 2023 to €646 million. Customer loan balances increased by 14 per cent to €1.2 billion, comprising car, commercial real estate, agri and small business loans. 'This was another great year for Finance Ireland. During 2024 we continued to invest in building out our lending platforms and in supporting our goal to challenge and win against the dominant Irish retail banks,' said Mr Kane. READ MORE 'We have been very successful in winning new business, entering new markets and selectively making high-quality acquisitions that support our long-term growth ambitions. We remain active in the market and continue to explore add on opportunities where they make sense for us.' Mr Kane said that the company has had a 'strong start' to 2025. The Irish Times reported last month that PTSB made an unsolicited overture to buy Finance Ireland late last year and remained interested in doing a deal. However, there is said to be a wide gap between both sides on price expectation. Industry sources have suggested that PTSB would have to pay in excess of €300 million to get Finance Ireland's owners to agree to see. The business is 51 per cent-owned by US investment management giant Pimco , which is said to not be in a rush to sell. London-based investment company M&G owns almost 40 per cent, with the remainder held by management. Sretaw, an investment owned by businessman Eamon Waters that has a 7 per cent in PTSB, told The Irish Times last month Finance Ireland would find it hard to command a valuation far above €100 million if it were a listed company – unless recent results and the future business plan 'show a step change in prospects'. Unlike banks, which mainly fund their loan books through cheap deposits, nonbanks are reliant on wholesale and capital markets, where rates spiked in recent years as central banks hike official borrowing costs to rein in inflation. The European Central Bank (ECB) has cut its key deposit rate from 4 per cent to 2.25 per cent since last June. Aside from car, commercial real estate, agri and small business loans, Finance Ireland also holds the title over hundreds of millions of euros of residential mortgages that had been issued through the company over the past eight years but are held off balance sheet though bond market vehicles. Finance Ireland revealed in March it has decided to stop mortgage lending, having effectively been out of this market in recent years.