The Spanish banking giant will enter the Irish market with a big boost for competition

The move comes as the banking market here has suffered the loss of Ulster Bank and KBC Bank, leaving AIB, Bank of Ireland and PTSB behind.

All three national banks have reported extraordinary profits of late.

Now the Spanish Bankinter is prepared to enter the market thanks to the success of its Avant Money mortgage and consumer financing offer.

Avant Money has been gaining market share despite AIB, BoI and PTSB underwriting almost 90% of new mortgages in this market.

Bankinter’s move will send shockwaves through the Irish banking system, as it was thought that until now full-service banks would not enter this market due to their small size and difficulties in repossessing homes when mortgage holders default.

Bankinter’s decision to establish itself in this market was first reported this morning by the Irish Times.

It is understood that the lender initially plans to bring banking services, including a deposit offering, under its Spanish license but using the Avant Money brand.

But it is expected to eventually apply for a full Irish banking licence. Sources said the bank will be digital-based, rather than using the traditional branch model.

Going through the EU Single Market allows a company licensed in one EU member to operate across the bloc.

A formal announcement is expected later Friday.

It will likely be seen as a significant boost to competition here following a series of foreign bank exits since the financial crisis.

In the past, former ECB president Mario Draghi described Ireland as a “quasi-monopoly” in 2018.

Both Ulster Bank and KBC have since exited the market.

The lack of banking competition in this market has long been recognized by the Central Bank, the Competition and Consumer Protection Commission and the Government.

The Government’s 2022 Retail Banking Report devotes an entire chapter to competition.

Avant Money did not respond to calls from the Irish Independent this morning.

Bankinter is the fifth Spanish bank with 113,000 million euros on its balance sheet.

It entered this market in 2018 through the acquisition of AvantCard, a credit card and consumer finance company, from the American investment group Apollo.

AvantCard was subsequently renamed Avant Money, which moved into Irish mortgages at the end of 2020 with rates starting at 1.95 per cent for first-term products, undercutting the cheapest home loans on the market at the time.

Bankinter recently reported that its Irish loans amounted to €3.3 billion at the end of March, up 43 percent on the year.