Spain’s Bankinter to enter Irish banking market

Spanish banking group Bankinter is planning to enter the Irish banking market on the back of success in its fledgling Avant Money mortgage and consumer finance offering, according to sources.

The lender initially plans to passport in banking services, including a deposits offering, under its Spanish licence but using the Avant Money brand. It is believed that it will ultimately aim to secure a full Irish banking permit. Sources said that the bank will be digital based, rather than using the traditional branches model.

Passporting through the EU’s Single Market allows a firm with a licence in one EU member to operate throughout the bloc.

A formal announcement is expected later on Friday. It will likely be seen as a significant boost for competition here following a slew of overseas banking exits since the financial crash. Retail banking here is currently dominated by AIB, Bank of Ireland and Permanent TSB.

A spokesman for Avant Money, which currently operates under an Irish retail credit firm licence, declined to comment.

It would be the first traditional lender from overseas to enter the Irish retail banking market since March 2005, when Bank of Scotland moved to buy 52 former ESB outlets to set up a boots-on-the-group banking operation and Copenhagen-based Danske Bank took over National Irish Bank.

Bank of Scotland (Ireland) would hand back its licence in 2010, as a result of the financial crash, while Danske Ireland, which had operated as a branch of its Danish parent group, exited the Irish retail market in 2013. The final two overseas banks in the market, Ulster Bank and KBC Bank Ireland, decided three years ago to wind down gradually.

Bankinter, the fifth-largest Spanish bank with a €113 billion balance sheet, entered the Republic in 2018 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 rates starting at 1.95 per cent for first-term products, undercutting the cheapest home loans in the market at the time.

Bankinter recently reported that its Irish loans amounted to €3.3 billion at the end of march, up 43 per cent on the year. Some €2.4 billion of this comprised of mortgages, marking a 53 per cent increase. The unit’s pretax profit rose 5 per cent on the year to €9 million.