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.

The lender will passport banking services, including a deposits offering, into the Republic under its Spanish licence, it said in a statement on Friday morning, which confirmed an earlier report by The Irish Times online. The bank will be digital based, rather than using the traditional branches model. The business will operate under the Avant Money brand.

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

“Today’s decision paves the way for the strategic expansion of our business. This is a clear commitment to Ireland from Bankinter and we look forward to bringing even more choice, value and competition to the market,” said Niall Corbett, chief executive of Avant Money, which has about 300 employees between its Carrick-on-Shannon and Dublin offices.

“It will allow us to better meet the needs of customers by further leveraging Bankinter’s innovative products and customer experience. We see potential for future job creation through the expansion of our operations and offerings, contributing to economic development and employment opportunities here in Ireland.”

The development is 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.

It 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 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.

Still, the market has seen the entrance in recent years of overseas-regulated online banks Revolut and N26, which offer various loans and savings products in the State.

“Today’s announcement is significant for the Irish banking market, and is very welcome news for households, businesses and consumers, who are the real winners from increased competition,” said Minister for Finance Michael McGrath.

He added that the decision “is also a vote of confidence in the strength of the Irish economy”.

Bankinter, the fifth-largest Spanish bank with a €113 billion balance sheet, 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 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.

To turn the Irish business into an overseas bank branch of Bankinter, the Spanish group is taking over the shares of Avant Money, which was previously held by its Bankinter Consumer Finance subsidiary.

All Avant Money’s assets and liabilities will be transferred to the branch, the statement said. It will continue the activities currently carried out by Avant Money in Ireland, with plans then to expand, initially, into the deposit market, following the necessary legal steps and regulatory approval.