Irish Banks Account for 62% of Ireland’s Mortgage Market

At the time of the banking crisis in 2008 which badly affected Ireland, there were 6 Irish banks in existence. Two of those banks later merged together to form IBRC, and began liquidation proceedings over 4 years later, while the largest bank AIB bought the smallest bank EBS.

Clearly this leaves only 3 Irish banks left with AIB Group having the largest mortgage book with a value of €37.3 billion at the end of June 2014 which accounts for 27.5% of the total country’s mortgages by comparing these figures to Central Bank statistics for June 2014. Bank of Ireland had mortgages in the country totalling €26.3 billion during the same month (19.4% of the market) while at the same time, Permanent TSB had a mortgage book with a value of €20.3 billion (15% market share)

These 3 banks therefore have a combined share of 61.9% as at June 2014.

The next main mortgage player is Ulster Bank (owned by British bank RBS Group) which has a similar sized share of the market to Permanent TSB with a mortgage book in the Republic of Ireland worth €20.2 billion as at December 2013.

Danske Bank which bought the Irish bank NIB a few years before the banking crisis hit, had a mortgage book in Ireland worth €3.2 billion, according to the Accounts in Dec 2012 (in the unlikely event it has the same value today in a decreasing mortgage market, it would command 2.4% of the market) which has since been sold on to other lenders, some of which would not have been familiar to most people.

IBRC, the bank which announced liquidation in February 2013, had a mortgage book value of only €1.8 billion (concerning 13,000 customers as it was mostly a developer’s bank) according to its accounts for the second half of 2012, which would only give a market share of 1.3% based on June 2014 figures. These mortgages were sold off in tranches to the highest bidders, just like the Danske Banks mortgages.

In addition there are sub-prime mortgages worth around €3.3 billion (2.4% of market) which affect 18,000 customers, according to a parliamentary answer to TD Michael McGrath last summer.

The total of the mortgages book values mentioned, account for 83% of the Irish market. Other foreign owned banks would clearly account for the remaining 17%, such as KBC bank or any of the European and US banks with a banking license in this country who may not specifically advertise their mortgages to the Irish market.

The Central Bank mortgage statistics, used to determine the banks’ exposure to the mortgage market, as at June 2014, had a book value of €135.4 billion (906,762 mortgages), of which around 78% of the value concerned principal private dwellings and the reaming 22% involved Buy-To- Let mortgages.