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Q&A: What does Bankinter move to Irish market mean for me?

New player in the sector looks like good news for consumers as it should lead to increased competition

Bankinter chairwoman Maria Dolores Dancausa has been the driving force as the Spanish group has expanded its Irish operations in recent years. Photograph: Juan Barbosa/Europa Press via Getty Images

Colin Gleeson
Fri Apr 26 2024 - 11:23

Spanish banking group Bankinter has announced plans to establish Avant Money as its Irish banking branch.

What exactly is Bankinter?

Bankinter is a leading Spanish banking group. It is a top 50 European bank operating in Spain, Portugal, Ireland, and Luxembourg.

What about Avant Money? I’ve heard references to them in an Irish context before.

Avant Money is part of the Bankinter group and has, in different forms, been present in the Republic since 1997, originally as MBNA credit cards.

In May 2019, Bankinter closed the deal to purchase Avantcard. Since then, the renamed Avant Money has seen strong growth across all product lines including credit cards, personal loans and mortgages.

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The loan portfolio of Avant Money, the current brand under which the bank operates in Ireland, stands at €3.3 billion – that’s €2.4 billion in mortgages with the remainder, €900 million, in consumer loans – with an overall non-performing loan ratio of 0.34 per cent. It made a pretax profit of €9 million for the first three months of this year and has about 200,000 customers here.

Okay, so this must be good news for consumers?

On the face of it, yes it is. The exodus of foreign-owned retail banks like Ulster Bank and KBC Bank Ireland in recent years has left a domestic banking market dominated by just three lenders – AIB, Bank of Ireland and Permanent TSB. In recent months those banks have faced criticism for offering relatively low interest rates on deposits even as the European Central Bank has hiked rates to their highest level in years.

Banks in other euro zone countries are paying more to attract deposits The arrival of a new player in the market should, in theory, lead to better offers for customers right across the board.

The news may also be a win for the Government – Minister for Finance Michael McGrath has already welcomed the move – and the Central Bank, both of which have been vocal about the need for more competitors in the sector.

The banks here already probably won’t be too happy?

This news comes just as AIB, Bank of Ireland and PTSB head back into private ownership. (Bank of Ireland is now fully private again, while taxpayers continue to own almost 40 per cent of AIB and 57 per cent of PTSB.) To some degree their shares have been buoyed by the lack of meaningful competition here. Now they face a new competitor and, depending on what Bankinter offers, initially in the deposits space, they will have to respond.

So what happens now?

Bankinter is taking the necessary legal and regulatory steps to formally set up in Ireland. That will allow it to offer a wider range of financial products and services to the Irish market in the future, beginning with deposit products.

Will this mean more bank branches opening in Irish towns and villages?

No. The bank will be digital, or online based, rather than using the traditional branches model.

I am already a customer with Avant Money. How does this impact me?

It doesn’t, except you should have access to savings accounts shortly. The company will continue to provide cards, loans and mortgages through its existing channels. Any customers who have questions can contact the Avant Money line on 0818 409511.

Anything else?

Bankinter has said it sees potential for future job creation through the expansion of its operations and offerings, contributing to economic development and employment opportunities in Ireland. It currently employs about 300 people in the State.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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