Non-bank lender Finance Ireland has announced a pre-tax profit of €10.5m for 2018 – up 27% year-on-year.
New lending rose 13% to €491m during the year, with the company reporting strong growth in commercial real estate and its 'Milkflex' loans to agricultural firms.
The company's origins are in the motor finance space, with lending there passing €1 billion recently, but it said other types of lending were becoming increasingly important to its business.
"Historically car finance has been a very big business for us – we started off in 2011 and it's been a consistent contributor," said Finance Ireland CEO Billy Kane.
"But last year it was the commercial mortgage business where we grew our portfolio to over €300m, we also passed the €100m lending mark to dairy farmers on our Milkflex product.
But he also said the company does have some "laggards". "We invested heavily in agri and our resi businesses so they lag us about €2m on our profits which we will get back in the following years."
Mr Kane said Brexit did not have a notable impact on lending for most of last year, however in the final quarter of 2018 – and the first weeks of 2019 – there was some signs of softness in certain areas.
"Certainly SME leasing has been affected – so van sales are down 27%," he said. "People are putting off decisions. Teagasc and IFAC have come out and advised farmers against investing until Brexit has become clearer," he said.
Finance Ireland has increased its reach beyond cars and business in recent weeks, announcing its full entrance into the residential mortgage market.
The loans are sold through a brokerage network and Mr Kane says it was a business that they could not ignore.
"It's a big market – it's going to be €10 billion this year and it's somewhere we have to play," he said.
"[Mortgage intermediaries] currently have about 22-23% of it – and I guess this year we would aim to have about 10% of the broker piece of that.
"Moving on, I think brokers market will go to about 40% and we would aim to have 15%."
As a non-bank lender Finance Ireland is not subject to the same capital requirements as a traditional lender – nor does it have to worry as much about the burden of Risk Weighted Assets that contribute to higher mortgage rates here.
Despite that, its variable and fixed rates are only comparable to what the likes of AIB, Bank of Ireland and Permanent TSB currently offer. Mr Kane says that while they may not have to hold the same kind of capital, they still count the cost of the risk incurred when it comes to borrowing.
"We'd certainly like them to be lower and if we could we would," he said.
"We don't benefit from very cheap deposits, and we can't roll up to the ECB and get money for -40bps. We borrow money on the wholesale markets and in many ways there's an intermediary between us and the end consumer – so while we would like to [offer lower rates] we've done very well.
"We're a very small player and we've managed to match the State-owned banks and the bigger banks in town," he added.