Losses at sub-prime home lender Start up 80% to €2.7m

LOSSES AT the Republic’s biggest sub-prime home lender Start Mortgages jumped 80 per cent to €2.7 million this year, while it owed almost €28 million to other companies in its group at its last balance sheet date, the latest figures show.

Start Mortgage Holdings Ltd, the ultimate parent of the home lending business that set up shop in 2004 to target Republic’s sup-prime market, had operating income of just over €7 million in the 12 months ended March 31st, its last financial year.

The income largely consisted of management fees from a series of subsidiaries through which it gave mortgages to consumers.

The company’s operating losses before tax rose by €1.2 million, or 80 per cent, to €2.7 million from €1.5 million at the end of its 2010 financial year.

Its balance sheet for March 31st last shows it had a €3 million deficit. It owed just under €27.6 million to creditors, which consisted entirely of related companies.

Its assets included €13.2 million due to the holding company from other group entities and €9.2 million in cash.

Start was, for a time, the most successful of a number of sub-prime home lenders which began trading in the Republic over the last decade. At the end of last June, it had about 300 repossession cases before the courts.

According to figures compiled by The Irish Times, in April, Start secured more repossession orders in the High Court than any other lender in the first quarter of this year. By the end of that period, it had secured 117 such orders.

The company’s spokesman said at the time that the figures were not an accurate measure of repossession activity, as other lenders use the lower courts, whose statistics are not as closely followed, more frequently.

Start’s ultimate parent is South African bank and finance group, Investec, whose British subsidiary, Kensington, bought out the 28 per cent of the Irish company that it did not own last June.

Following that deal, chief executive David Ingram, financial officer Niall Corish, head of risk Paul Murphy and head of treasury Deirdre Barry, said that they would leave the company.

Start employs 62 staff and has mortgages of €1 billion. It entered the Irish market in 2004.

The company became the biggest operator in the sub-prime market, and is the only one of four such lenders still in business here. It switched out of the sub-prime market two years ago and now operates as a conventional lender.