Avant Money’s mortgage growth slows amid slump in switching

Avant Money, the Irish consumer finance company owned by Spain’s Bankinter, saw its rate of mortgage growth slow sharply over the past three months, as home loans switching slumped across the market following frenetic activity last year.

Bankinter said on Thursday that Avant’s mortgage book grew by 92 per cent year-on-year in the second quarter to €1.7 billion. The portfolio expanded by about €100 million compared to the first three months of 2023.

However, the annual pace of growth compared to 179 per cent recorded for the first quarter and 268 per cent expansion posted during 2022.

Still, Bankinter chief financial officer Jacobo Diaz Garcia said on a call with analysts that the performance of the Irish mortgage business, which was launched in late 2020, has been “remarkable”.

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Avant Money, based in Carrick-on-Shannon, Co Leitrim, took about a 10 per cent share of new mortgage activity in Ireland last year to become the leading non-bank lender in the market at a time of heightened mortgage switching activity as borrowers piled into fixed-rate products amid rising central bank rates. The lender is focused on fixed-rate loans, spanning from three to 30 years.

The European Central Bank (ECB) has increased its main lending rate from zero to 4 per cent since last July.

Switching activity has declined across the Irish market so far this year, according to Banking & Payment Federation Ireland (BPFI) data.

While Avant Money has increased rates on various products a number of times in the past year, it moved in May to shave 0.35 of a percentage point off full-term fixed loans, setting its lowest such rate set at 3.95 per cent.

Meanwhile, Avant Money’s consumer finance book grew by 23 per cent on the year in the second quarter, to €758 million, bringing its total Irish portfolio to €2.46 billion. Mr Diaz Garcia said he expected both Irish loan books to continue to grow.

Bankinter’s net profit doubled to €233 million in the second quarter compared to same period a year ago.

The Spanish group’s net interest income rose 58 per cent to €546 million to beat the €538 million analysts had expected. However, the increase was slower than the 63 per cent year-on-year rise achieved in the first quarter.