Finance Ireland property arm now lending €10m a month
FInanCe Ireland, the State's biggest non-bank lender aims to carve out a larger niche in the commercial mortgage market, as the main banks continue to retreat from the space, enabling smaller, niche-players to surge ahead.
The firm's property lending unit, backed by the global investment giant PIMCO, and Ireland's state investment fund, ISIF, says it is on course to lend more than €100m in 2017 and has exceeded its first year growth targets.
Finance Ireland says its property-lending arm is writing €10m a month of loans, above its initial projections of €6m a month.
Ken Murnaghan, a former head of business banking at Ulster Bank, and the managing director of the division, predicted that figure could rise to €300m by the end of next year.
Most of Finance Ireland's clients are businesses refinancing away from the mainly US loan funds that came into Ireland in the wake of the banking crisis.
Finance Ireland is headed by Billy Kane, a former CEO of Irish Permanent.
Rather than chasing portfolio acquisitions, Finance Ireland said it targets individual borrowers eager to escape the so called "vulture funds" which are in turn are happy to cash out of loans bought in bulk from Nama and the banks.
Mr Murnaghan stressed each loan originates from Finance Ireland - HSBC provides the wholesale funding - and said a deal is reached only after "the existing lender releases all security over the asset".
He said the firm's loan-to-value rates range between 60pc and 70pc but declined to comment on the interest rates it charges borrowers.
The Irish Independent understands borrowers pay between 6.5pc to 8pc for secured loans - higher than the banks, but lower than many other non-bank lenders.
Mr Murnaghan claimed the firm sits at the more "competitive end of the lending scale," and pointed out this is due to its focus on the €1m to €10m ticket size.
He said Finance Ireland's borrowers are local, with 60pc exposed to the retail and buy-to-let sectors.
According to Mr Murnaghan, the pillar banks' "over-exposure to property" and risk aversion has left a gap for non-bank players. He said 80pc of Finance Ireland's business is emerging out of the US loan funds and predicted this will continue as the private equity funds seek fast resolution of mortgages hoovered up at a discount.