Friday 15 December 2017

Dilosk eyes Danske's €2bn loan book in bid for growth

Dilosk first forged into the market with the purchase of Bank of Ireland's ICS $223m-plus mortgages platform in 2014. Stock image
Dilosk first forged into the market with the purchase of Bank of Ireland's ICS $223m-plus mortgages platform in 2014. Stock image

Gretchen Friemann

Specialist mortgage provider Dilosk is weighing a tilt at Danske's €2bn retail book in an effort to gain greater scale and carve out a wider niche in the sector, the Irish Independent has established.

News of Dilosk's interest in this latest portfolio comes hot on the heels of its €160m acquisition of mortgages originally issued by US giant GE Capital.

While Dilosk, which specialises in the buy-to-let sector, is likely to face stiff competition for Danske's loan book, its acquisition would radically boost the niche lender's reach and enable it to mount a broader assault on the residential mortgage market.

This newspaper revealed last week that Danske, Denmark's biggest bank, is aiming to cast off its portfolio of home loans by the end of the year, and is understood to have enlisted Morgan Stanley to run a sales process. Sources said the bank is also considering securitising the loans.

Fergal McGrath, CEO and co-founder of Dilosk, declined to comment on the mooted sale of Danske's mortgage book but stressed the firm will pursue large-scale acquisitions if the deal proves a "strategic fit".

He added that "size and scale" are necessary for any new mortgage lender seeking to establish itself in the market.

Dilosk forged into the sector in 2014 after swooping on 2,000 ICS Irish home loans from Bank of Ireland.

In January the firm made a play for greater market share with the launch of a €200m fund focused on buy-to-let investors, with the new loans marketed as ICS mortgages.

It is understood Dilosk intends to apply the brand to its latest acquisition of GE Capital-originated mortgages.

The firm, minority owned by two London-based advisers, Chenavari and Attestor Capital, swooped on €105m worth of loans in April and bought out the remainder of the €160m portfolio last week. It is understood BNP Paribas and Royal Bank of Scotland provided funding for the deal.

Pepper, the Australian financial services group that acquired the loans from GE Capital in the midst of the financial crisis - with funds from Goldman Sachs - will continue to service the loans.

Irish Independent

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