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BPFI Non-bank Lending Overview 2024

Non-bank lenders playing vital role in economy with €20 billion in credit to Irish households and small businesses by end of 2023 – new BPFI report

Friday 17th January – Non-bank lenders are playing a vital role in the economy providing €20 billion in credit to Irish households and small businesses at the end of 2023, according to a new report published by Banking & Payments Federation Ireland (BPFI), based on an analysis of data from the Central Bank of Ireland (CBI). Encompassing a large and diverse group of financial enterprises, non-bank lenders do not offer deposit accounts, but they do provide a wide range of credit facilities for consumers and small and medium enterprises (SMEs), driving greater choice and competition in the Irish market.

Key figures from the report show:

  • Non-bank lenders provided €20 billion in credit to households and SMEs at the end of 2023, accounting for about 15% of outstanding credit.
  • Over half of that was made up of residential mortgages to homeowners (€8.1 billion) and landlords (€2.2 billion).
  • About one third of the value of new lending to SMEs and one fifth of the value of outstanding credit (€4.5 billion) came from non-bank lenders at the end of 2023.
  • Non-banks and specialist banks accounted for 72% of the outstanding value of personal asset finance, including car finance, valued at €3.5 billion.

Speaking on the publication of the report, Brian Hayes, Chief Executive of BPFI stated: “Non-bank lenders have established a strong presence in the Irish market and are a vital segment of the financing eco-system driving greater choice and competition for consumers and SMEs. This is clearly demonstrated by the fact that credit from these lenders accounted for about 15% of all outstanding household and SME credit at the end of 2023.

Increasing mortgage activity and key role in funding SMEs in Ireland

“Looking at the mortgage market, non-bank lenders are actively increasing their mortgage activity, managing almost 45,000 homeowner mortgages by the end of September 2024, an increase of 25% year on year. In addition to mortgage lending, they provide a wide range of consumer credit solutions such as credit cards, personal loans and asset finance. In particular, they play a substantial role in the car finance sector, especially in the provision of hire purchase and personal contract plans through car dealers.”  

“Non-bank lenders also play a key role in funding SMEs in Ireland, accounting for about one third of the value of new lending and one fifth of the value of outstanding credit to the end of 2023. They provide a broad range of credit products to small businesses including business leasing, loan, mortgage and working capital finance as well as substantial credit support to key business sectors such real estate and construction, the retail and wholesale trade and administrative services.”

Diverse business and funding models and enhanced competition in the market

Mr Hayes continued: “It’s important to recognise that non-bank lenders bring diverse business and funding models to the Irish market and support the economy by enabling customer choice and enhancing competition. A number of non-bank lenders are BPFI members and are regulated by the CBI as retail credit firms. From a regulatory perspective, they are subject to the same conduct of business rules and macroprudential mortgage measures as banks. They also facilitate the diversification of risk sharing and draw on different, especially international, funding sources, highlighting the need to ensure that Ireland remains an attractive destination for international capital and investors. Looking forward, a supportive operating environment will be important in facilitating non-banks to continue to serve their current and new customers, while contributing positively to a stable and competitive financial system in Ireland.”

The BPFI non-bank lending report can be downloaded here.

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Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 110 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here. Contact:  Jillian Heffernan, Director of Communications, jillian.heffernan@bpfi.ie 087 9016880

The BPFI Non-bank Lending Overview 2024 is available for download below in PDF format.

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