Avant Money’s loan book rose by 27 per cent to €3.8 billion last year, led by mortgage growth, ahead of the lender becoming a full branch of its Spanish parent, Bankinter, in a little over two months’ time.
New lending for the year amounted to €1.2 billion, up 17 per cent, Bankinter said in a presentation on Thursday as it reported results for 2024. Its mortgage portfolio expanded by 31 per cent to €2.9 billion, while its consumer credit book rose 17 per cent to reach €1 billion.
The Irish business reported a €41 million profit for the year, up 23 per cent. It claimed a 7.1 per cent share of new mortgage lending.
The Bankinter unit started to inform its more than 200,000 customers last week that it will become a fully fledged branch of the Madrid group from April, to be able to expand services here.
Avant Money, led by chief executive Niall Corbett, is currently a nonbank lender, albeit funded by its parent bank, offering mortgages, credit cards and personal loans. It plans to initially focus on expanding its product range to deposits after becoming a branch.
Bankinter is aiming for Avant Money to start collecting deposits by the middle of the year. Bankinter chief executive Gloria Oritz told analysts on a call that she expects Avant Money to gather €100 million-€200 million of deposits in 2025, before growing gradually to a stage where the Irish loan book is almost funded by local deposits within eight years.
“We don’t expect masses of deposits in Ireland [in 2025],” Ms Oritz said. “It’s going to be a trial year where we will be stating our value proposition for Irish clients. The Irish [banks] are not remunerating a lot of deposits. They don’t have the [cost] efficiency ratios that allow them to have a higher cost in deposits. We don’t think we will have to significantly overpay for deposits.”
It will continue to operate as a bank branch in the Republic under the Avant Money name for now, though it is expected to rebrand as Bankinter in time.
Its digital, rather than branch network, strategy means that Avant’s running costs equated to 48 per cent of total income, below the typical target of about 50 per cent for a retail banks. However, Bankinter’s ratio was 36 per cent last year.
The Spanish banking giant is the first traditional lender from overseas to move to enter the Irish retail banking market since March 2005, when Bank of Scotland moved to buy 52 former ESB shops to set up a boots-on-the-ground banking operation and Copenhagen-based Danske Bank took over National Irish Bank. Bank of Scotland and Danske Ireland would exit Irish retail banking after the crash.
The final two overseas banks in the market, Ulster Bank and KBC Bank Ireland, decided four years ago to wind down gradually.
Still, the market has seen the entrance in recent years of overseas-regulated online banks Revolut and N26, which offer various loan and savings products in the State. Revolut plans to enter the Irish mortgage market this year.
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Bankinter, the fifth-largest Spanish bank, entered the Republic in 2019 through the acquisition of AvantCard, a credit card and consumer finance business, from US investment group Apollo.
AvantCard was subsequently renamed Avant Money, which moved into Irish mortgages in late 2020 with headline rates that undercut the cheapest home loans available at the time in the market.
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