Revolut plans to offer Irish mortgages from 2025

UK-based financial technology group Revolut is eyeing a long-anticipated launch of mortgages in the Irish market in the first half of next year, according to the head of the group’s operations across Europe.

“We’re very keen to get mortgages launched next year in Ireland,” Joe Heneghan, chief executive of Revolut Europe, told The Irish Times on Tuesday after the group published its annual report for 2023. “Our team is working very hard on it. I would probably say the first half of next year is realistic. The market is attractive.”

Revolut’s Irish customer base reached 2.7 million at the end of 2023 and is on track to breach three million this year, equating to almost three-quarters of people over the age of 18 living in the State.

This would give it a big opportunity to take on the three remaining retail banks in the State, who accounted for 93 per cent of new mortgage lending last year.

The market has received a fresh injection of competition this year, with ICS Mortgages lowering rates and easing lending restrictions, and Moco, owned by Austrian bank Bawag, making inroads into the market. Another start-up, Nua Mortgages, is eyeing an imminent soft launch.

[ Analysis: Revolut’s entering Irish mortgages could be game changer, and banks know it ]

Mr Heneghan claims that Revolut’s IT capability will be able to “make the customer journey a lot slicker, a lot faster and a lot less onerous for the consumer”.

Revolut has previously signalled that it would look to enter the home loans market first in Lithuania, where its euro zone banking licence is based, followed by Ireland. The company declined to give further details of its Irish mortgages plans.

“No final decision on how we execute mortgages has been made just yet. However, the team are working tirelessly to bring this to the Irish market, where we feel we can have a significant impact,” a spokesman said.

Revolut, cofounded by Nikolay Storonsky and Vlad Yatsenko in 2015, posted a better-than-expected $428 million (€398 million) profit last year as revenues soared 95 per cent to $2.2 billion.

While the fintech has made inroads into the lending space — including starting a personal loan offering in the Republic in 2022 — its $680 million loan book at the end of last year equated to only about 3 per cent of its $22 billion of customer deposits. This provides plenty of scope for the group to lend off its balance sheet and gives it an advantage over nonbank lenders, who must ultimately fund themselves on international bond markets, where interest rates have been volatile in recent years.

Mr Heneghan declined to comment on the size of the Irish personal loans, credit cards or deposit books, or scale of the fledgling car insurance business it launched first in this State last year with coverage underwritten by US insurer AIG.

“Historically, people opened Revolut accounts as a second product in order to carry out payments or get better value on foreign exchange. But the relationship with our customers is definitely maturing and [people] are taking more products with us,” he said.

Revolut is also reportedly targeting a valuation exceeding $40 billion in a share sale that would cement its status as Europe’s most valuable start-up. The company was previously given a $33 billion valuation in a 2021 fundraising. As of last month, it had 45 million retail customers in 38 countries, up from 38 million at the end of last year and 26.2 million in December 2022.

The filing of Revolut’s latest annual accounts three months in advance of a statutory deadline marks the first time that the company has not sought an extension on its submission in years.

It is seen as an important signal as the group seeks a banking licence from UK regulators that would allow it to expand its offering in its home country — and as it ultimately eyes an initial public offering.

Group chief financial officer Victor Stinga said that Revolut does not have a timeline — or a potential location — in mind for a stock market flotation.