Domestic Irish Banks Provide Under Half of Business Loans Since 2019, Central Bank Study Finds

Domestic Irish banks have provided less than half of loans to businesses over the past seven years, according to a new Central Bank study. This highlights a more diverse credit market than suggested by mortgage market share figures alone.

AIB, Bank of Ireland, and PTSB accounted for 64 percent of household loans since 2019, primarily home loans, but only 31 percent of credit to non-households. Foreign banks were responsible for 58 percent of business loans, with 20 foreign banks active in the market. Nonbank lenders (NBLs) contributed 11 percent.

Conversely, the three domestic banks increased their dominance in mortgage lending, securing 88 percent of such loans after Ulster Bank and KBC Bank Ireland exited the market. They were behind only 1 percent of commercial mortgages and 11 percent of syndicated loans. Credit unions held a 46 percent share in consumer credit but only 1 percent of home loans, though the Irish League of Credit Unions aims for 10 percent of annual mortgage lending in coming years.

The report, authored by Central Bank economists Roman Goncharenko and Elizaveta Lukmanova, covers term loans issued between 2019 and 2025. It notes no significant difference in mortgage pricing between banks and non-banks, reflecting a highly standardized residential mortgage market. However, consumer credit and firm lending carry a non-bank premium of approximately 1.8-1.9 percentage points and 1.6-2.8 percentage points, respectively. This premium is attributed to non-banks offering contractual flexibility, speed, and product specialization. The study also indicates that NBLs serve as long-term financing partners, not just temporary solutions, with no evidence they systematically serve weaker firms.