According to insider sources, Bankinter, a Spanish banking conglomerate, is making moves to access the Irish banking sector, having seen the success of its recent venture, Avant Money, in mortgage and consumer finance. In the beginning, the bank will import banking services inclusive of deposit opportunities, using its Spanish license and branding under Avant Money. The ultimate objective is to acquire a full-fledged Irish banking licence. Insiders revealed that the financial institution’s approach will lean towards digital banking, diverging from the orthodox model of physical branches.
The principle of ‘passporting’ facilitates operations across the entire European Union bloc for a firm holding a license in any EU member state.
A formal public statement on the matter is anticipated later on Friday. This move could considerably amplify competition in the local scenery, given the preceding string of international banking departures subsequent to the financial meltdown. At present, AIB, Bank of Ireland, and Permanent TSB dominate the retail banking in Ireland.
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The Avant Money spokesperson, operating under an Irish retail credit firm license, refrained from making a comment.
If successful, this will be the first time since March 2005, an overseas traditional lender has ventured into the Irish retail banking sector. Previously, Bank of Scotland had made a similar move when it acquired 52 former ESB outlets to establish a physical banking operation. Concurrently, Copenhagen-based Danske Bank took the reins of National Irish Bank.
After the financial crisis of 2010, Bank of Scotland (Ireland) revoked its license. Meanwhile, Danske Ireland, a branch of its Danish parent group, retreated from the Irish retail market in 2013. The last couple of international banks in the market – Ulster Bank and KBC Bank Ireland – opted to slowly wind up their operations three years prior.
Entering the Irish sector in 2018 via the acquisition of AvantCard, a credit card and consumer finance company previously owned by US investment conglomerate Apollo, Bankinter, Spain’s fifth-biggest bank whose balance sheet stands at €113 billion, then rebranded AvantCard to Avant Money. Avant Money started offering mortgages in Ireland towards the end of 2020 at a rate that began at 1.95% for initial-term products, making them the most affordable in the market.
Recently, Bankinter announced an increase of 43% in its Irish loans as compared to the previous year, reaching €3.3 billion by the close of March. The bank’s mortgage loans made a significant part of this total, escalating by 53% to a whopping €2.4 billion. The firm reported an upswing in its pretax profits too, raising the total by 5% year on year to hit the €9 million mark.