Finance Ireland profits nearly triple as part of release of loan loss provisions – The Irish Times

Finance Ireland, the state’s largest non-bank lender, saw its pre-tax profits nearly triple last year to €28 million as it released some unused provisions taken at the height of the Covid-19 crisis to potential loan losses.

The profit figure rose from the 9.64 million euros recorded in 2021. Finance Ireland, led by chief executive Billy Kane, released 4 million euros in loan provisions last year, equivalent at 29% of the €13.7m he set aside in 2020 for possible loan losses.

New loans jumped 54% last year to €1bn, and new mortgages jumped 95% to €552m. The auto finance division, First Auto Finance, underwrote 205 million euros in new business, up 4.6% year-on-year, despite several months of limited activity in the market due to the pandemic and the impact of global chip shortages coupled with reduced supply. of used cars in the Republic.

Commercial real estate new loans increased by 65% ​​to €165m, while the SME and agri-finance divisions saw their combined new loans increase by more than 10% to €85m .

“While we are aware of the economic challenges associated with steep increases in the cost of living, and energy prices in particular, the Irish economy has shown exceptional resilience during and after the pandemic and we remain confident. as to the opportunities that exist,” Mr. Kane said.

Finance Ireland secured a new UK investor, M&G, in July to help buy out the Irish Strategic Investment Fund’s 33% stake and support a €50m fundraise. The series of deals, which also saw a group of long-time investors and management sell shares, valued Finance Ireland at around 255 million euros, including money raised in the capital raise. US investment giant Pimco, which first acquired a stake in Finance Ireland in 2015, has increased its investment with the arrival of M&G. The two companies now own 90% of the lender.

The new capital was intended for the future growth and expansion of Finance Ireland, including the continued growth of its car finance business. The company moved auto finance to its own balance sheet earlier this year to maximize its growth potential. It previously used funds from British investment banking group Close Brothers for this activity.

“2021 has been a banner year for the group and demonstrates the continued strong demand from businesses and consumers for a new approach to credit. Despite the continued impacts of Covid-19, the business delivered strong results and our capital raising in 2022 leaves us exceptionally well positioned to fund the continued growth of the business,” Mr. Kane said.

Finance Ireland said it employed 170 people, down from 150 a year ago. The pay of the group’s highest-paid director, believed to be Mr Kane, jumped 80% last year to €841,404.

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