State gets first new overseas bank in 20 years in challenge to the big two

Spanish-owned Avant Money already offers mortgages, credit cards and personal loans in this country, but will now add deposits to its offering.

Avant Money is part of Bankinter, a top 50 European bank. The group entered the Republic in 2019 through the acquisition of AvantCard, a credit card and consumer finance business, from US investment group Apollo.

Since its acquisition by the Spanish bank, Avant Money had grown its loan book from €379m in 2018 to over €3.9bn, it said.

Avant Money is now a fully licensed bank in the Irish market. It is keeping its Avant Money name for now but it is expected to change to the Bankinter brand in time.

It will not have a branch network, but will continue to sell mortgages through brokers, and offer other products online and digitally.

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Chief executive of Avant Money in Ireland Niall Corbett said his bank planned to challenge the status quo in this market.

AIB and Bank of Ireland are hugely dominant in this market following the move by Ulster Bank and KBC Bank Ireland to announce their closures four years ago.

Nine out of 10 mortgages are issued by the two main banks.

Mr Corbett said: “The move strengthens our ability to offer Irish consumers a broader range of products and services. With Bankinter’s backing, we’re excited to leverage our 28-year heritage in Ireland and build on the immense potential this market holds.

“The backing of Bankinter means that we can continue to challenge the status quo in the Irish market.”

He said consumers deserved more choice, competitive rates, and improved customer service.

“With Bankinter’s support, we are well-positioned to provide exactly that. We’re just getting started. The future is bright, and we’re looking forward to delivering even more value to our customers in the years ahead.”

Finance Minister Paschal Donohoe said: “The designation of Avant Money as an official branch of Bankinter is a positive development for the Irish banking sector. It enhances competition, offers more choice to consumers, and contributes to strengthening Ireland’s financial system.”

He said the Government continued to prioritise fostering a diverse and competitive banking landscape, and this move aligned with those objectives.

Ireland has not had a traditional lender from overseas enter the retail banking market since Bank of Scotland bought 52 former ESB shops to set up a boots-on-the-ground banking operation in March 2005.

Around the same time, Copenhagen-based Danske Bank took over National Irish Bank.

Bank of Scotland (Ireland) handed back its licence in 2010 due to the financial crash.

Danske Ireland, which had operated as a branch of its Danish parent group, exited the retail market here in 2013.

The final two overseas banks in the market, Ulster Bank and KBC Bank Ireland, decided four years ago to wind down gradually.

In recent years, several overseas-regulated online banks including Revolut and N26 have entered the market, offering various loan and savings products in the State.

Revolut plans to enter the Irish mortgage market this year.

Avant Money surprised the market last month when it launched a “tracker-type” mortgage, more than 17 years after banks here stopped offering them.

It launched a new product called Flex Mortgage. It is benchmarked to the European wholesale interest rate Euribor, plus a set margin for the life of the mortgage. Euribor is the interest rate at which banks to lend to each other.

The product offers borrowers the flexibility to overpay their mortgage, pay it all down without penalty, and switch to an Avant Money fixed rate at no cost.