Finance Ireland, the State’s largest non-bank lender, paid a maiden dividend of €75 million dividend to shareholders last year to distribute excess capital as profits grew for a third year in a row and its loan book reached a record level.
Chief executive Billy Kane confirmed for the first time in an interview with The Irish Times that the lender had been courted separately by PTSB and Bawag, which emerged last week as the winning bidder for the State-controlled bank.
The PTSB talks “fizzled out” early last summer, while Finance Ireland broke off discussions with Bawag in recent months, he said. He added that the company, which is controlled by US investment firm Pimco, now wants to pivot and hunt for deals of its own within the non-bank lending sector.
“We have strong and deep-pocketed shareholders who support our future growth ambitions, including acquisitions as the non-bank market consolidates,” said Kane.
Pretax profit rose 23 per cent last year to €24.9 million. Earnings had essentially doubled in each of the two previous years. Its on-balance-sheet loan book reached a record €1.5 billion.
New lending in its motor finance division, the group’s largest business, rose 12 per cent, while its loan portfolio rose 26 per cent to a record €653.2 million, according to the latest financial statement from the lender’s parent company, FICS Group Holdings.
The commercial real-estate unit’s portfolio – including loans against multifamily apartment blocks, warehouses, hotels, regional retail centres and mixed developments – grew for the first time in recent years, by 9 per cent to €526.4 million.
The SME leasing division’s loan book grew 12 per cent to €101.8 million, fuelled by a pickup in businesses taking on fresh credit and green-energy lending, where it provides consumer-financing arrangements to the likes of solar panel suppliers.
Finance Ireland’s final unit, agrifinance, saw new lending slide last year as Irish dairy farmers held off investing amid concerns about whether the European Union would extend a derogation allowing them to spread higher levels of fertiliser on their land. This portfolio contracted 12.5 per cent to €115.9 million. However, Kane said that there had been a surge in new loans so far this year, after Brussels decided to extend the exemption for another three years.
The lender had €231 million of net assets and a cash position of almost €93 million on its balance sheet – albeit three-quarters of this is restricted and ring-fenced for specific lending purposes or used for security for financing arrangements.
“This is a very strong set of results, driven by our disciplined lending approach and deep cross‑sector expertise. The business is exceptionally well positioned for continued growth,” said Kane.
The Irish Times reported in mid-March that Finance Ireland’s talks with Austrian banking group Bawag had ended without a deal. “We broke off the discussions,” Kane said in the interview. It is understood that Finance Ireland’s shareholders decided the execution risks were too high, given that Bawag was widely seen as a strong contender for PTSB, a far larger acquisition that would demand considerable focus to integrate.
Bawag was confirmed last week as the winner of the PTSB auction with a bid of almost €1.62 billion.
Asked if Finance Ireland be open to having conversations with the combined group in time, Kane said: “We’ll have a conversation with anybody, but I suspect they’ll be busy and have indigestion with that particular transaction.”