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Loans and Credit - Ireland - January 2019

"While both Irish economies have returned to growth following the severe downturn of a decade ago, consumers have not developed anything like the same appetite for borrowing that characterised the last economic boom. Albeit with some exceptions, the attitude towards borrowing is broadly responsible and measured."

– Brian O’Connor, Senior Consumer Analyst

This report examines the following issues:

This Report examines loans and other forms of credit in NI and RoI. It analyses the main factors determining supply and demand for loans and other credit products. Drawing on exclusive consumer data, it analyses levels of ownership among consumers of loans and other credit products, the amount owed on these products, reasons for taking out past loans and reasons for taking out future loans.

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Table of contents

  1. Overview

    • What you need to know
      • Issues covered in this Report
        • Definitions
        • Executive Summary

            • The market
              • Figure 1: Outstanding credit advanced to households, IoI, RoI and NI, actual, forecast and projected, 2014-19
            • Forecast
              • Figure 2: Index of outstanding credit advanced to households, RoI and NI, actual, forecast and projected, 2014-23
            • Market factors
              • Both economies continuing to grow, but uncertainties around NI
                • Consumer confidence relatively high, but Brexit-related doubts abound
                  • Less credit available in NI, but demand higher
                    • Demand for credit up within eurozone (including RoI)
                      • Companies and brands
                        • The consumer
                          • Around six in 10 consumers have outstanding loan or credit
                            • Figure 3: Credit/loan products that consumers currently owe money on, NI and RoI, November 2018
                          • Value of debts low and manageable in case of most consumers
                            • Figure 4: How much consumers currently owe on loans or credit products (excluding mortgages and student loans), NI and RoI, November 2018
                          • Most loans taken out for practical and sensible reasons
                            • Figure 5: Main reason for taking out most recent loan, NI and RoI, November 2018
                          • Openness to borrowing for cars, home repairs and household items
                            • Figure 6: Reasons consumers would consider taking out a loan in the future, NI and RoI, November 2018
                          • What it means
                          • The Market – What You Need to Know

                            • €21 billion owed by Irish consumers on loans and credit in 2018
                              • Growth in NI and RoI economies, but future doubts ahead
                                • Consumer confidence still high but anxieties emerging
                                  • Demand for credit up among NI consumers, but supply down
                                    • Credit standards constant, while demand for credit up in eurozone
                                    • Market Size and Forecast

                                        • Just over €21 billion in outstanding credit to Irish consumers in 2018
                                          • Figure 7: Outstanding credit advanced to households, IoI, RoI and NI, actual, forecast and projected, 2014-23
                                        • Outstanding debt expected to top €26 billion by 2023
                                          • Figure 8: Index of outstanding credit advanced to households, RoI and NI, actual, forecast and projected, 2014-23
                                      • Market Drivers

                                        • Economic outlook strong for RoI, but weaker for NI
                                          • Figure 9: Economic growth forecast, NI and RoI, 2018-23
                                        • Continued employment growth in RoI, but slight contraction in NI
                                          • Figure 10: Employment forecasts, % change, NI and RoI, 2018-23
                                        • Wages rising strongly in RoI, growing more modestly in NI
                                          • Figure 11: Wage forecasts, % change, NI and RoI, 2018-23
                                        • NI consumer confidence down, nervousness up
                                          • Figure 12: Consumer confidence index, sub-index readings, NI, Q3 2017 AND Q3 2018
                                        • RoI consumer confidence steady, but worries mounting
                                          • Figure 13: Consumer sentiment index, RoI, June 2013-December 2018
                                        • Availability of credit down while demand up in Q3 2018 in UK (including NI)
                                          • Figure 14: Availability of unsecured credit provided to households, % change, UK (including NI), Q4 2015-Q3 2018
                                          • Figure 15: Demand for unsecured credit provided to households, % change, UK (incl. NI), Q4 2015-Q3 2018
                                        • Credit standards unchanged, credit demand increasing within eurozone
                                          • Most Irish consumers rate own finances as either 'healthy' or 'OK'
                                            • Figure 16: How consumers rate their own financial situation, NI and RoI, November 2018
                                          • Finances tightening for NI consumers over recent months
                                            • Figure 17: How consumers rate their own financial situation, NI, February 2016-December 2018
                                          • RoI consumers' finances broadly unchanged over recent months
                                            • Figure 18: How consumers rate their own financial situation, RoI, February 2016-December 2018
                                        • Companies and Brands – What You Need to Know

                                          • Amigo Loans obtains licence to operate in RoI
                                            • Central Bank of Ireland finds changing credit union industry
                                              • Debt sale of non-performing loans continues for Irish banks
                                                • Investment banking analysts expecting a growth in total loan market in RoI
                                                • Who’s Innovating?

                                                  • Revolut obtains European Union banking licence
                                                    • Cryptocurrency-backed loans launching in international markets
                                                      • JPMorgan Chase using Pinterest for loan applications
                                                        • AIB draws ire for using customer social media
                                                        • Companies and Brands

                                                            • Banks
                                                              • Allied Irish Bank/First Trust
                                                                • Key facts
                                                                  • Product portfolio
                                                                      • Figure 19: AIB credit card portfolio with interest rates and APRs, RoI, 2018
                                                                      • Figure 20: First Trust credit card portfolio with features, NI, 2018
                                                                    • Recent developments
                                                                      • Bank of Ireland
                                                                        • Key facts
                                                                          • Product portfolio
                                                                            • Figure 21: Bank of Ireland personal loan amounts with APRs, RoI, 2018
                                                                            • Figure 22: Bank of Ireland credit card portfolio, with features, RoI, 2018
                                                                            • Figure 23: Bank of Ireland credit card portfolio, with features, NI, 2018
                                                                          • Recent developments
                                                                            • Danske Bank (NI only)
                                                                              • Key facts
                                                                                • Product portfolio
                                                                                  • Figure 24: Danske Bank fixed-rate personal loan amounts with APRs, NI, 2018
                                                                                • Recent developments
                                                                                  • First Direct (NI only)
                                                                                    • Key facts
                                                                                      • Product portfolio
                                                                                        • Figure 25: First Direct loan amount with APRs, NI, 2018
                                                                                      • Recent developments
                                                                                        • KBC Ireland (RoI only)
                                                                                          • Key facts
                                                                                            • Product portfolio
                                                                                              • Figure 26: KBC Ireland personal loan amounts with representative APRs, RoI, 2018
                                                                                              • Figure 27: KBC Home Improvements with representative APRs, RoI, 2018
                                                                                            • Recent developments
                                                                                              • Nationwide (NI only)
                                                                                                • Key facts
                                                                                                  • Product portfolio
                                                                                                    • Figure 28: Nationwide personal loan amounts with representative APRs , NI, 2018
                                                                                                  • Recent developments
                                                                                                    • Permanent TSB (RoI only)
                                                                                                      • Key facts
                                                                                                        • Product portfolio
                                                                                                          • Figure 29: Permanent TSB personal loan amounts with interest rates and APRs, RoI, 2018
                                                                                                          • Figure 30: Permanent TSB home improvement loan amounts with interest rate and APR, RoI, 2018
                                                                                                          • Figure 31: Permanent TSB Cash secured loan, with interest rates and APRs, RoI, 2018
                                                                                                        • Recent developments
                                                                                                          • Santander (NI only)
                                                                                                            • Key facts
                                                                                                              • Product portfolio
                                                                                                                • Figure 32: Santander personal loan amounts with APRs, NI, 2018
                                                                                                              • Recent developments
                                                                                                                • Credit unions
                                                                                                                  • Dubco
                                                                                                                    • Key facts
                                                                                                                      • Product portfolio
                                                                                                                        • Figure 33: Dubco loan portfolio with interest rates and APRs, RoI, 2018
                                                                                                                      • Recent developments
                                                                                                                        • Irish League of Credit Unions
                                                                                                                          • Key facts
                                                                                                                            • Product portfolio
                                                                                                                              • Recent developments
                                                                                                                                • Life Credit Union (RoI only)
                                                                                                                                  • Key facts
                                                                                                                                    • Product portfolio
                                                                                                                                      • Figure 34: Life Credit Union, loan portfolio with APRs, RoI, 2018
                                                                                                                                    • Payday loan providers
                                                                                                                                      • 118 118 Money (NI only)
                                                                                                                                        • Key facts
                                                                                                                                          • Product portfolio
                                                                                                                                            • Recent developments
                                                                                                                                              • Quick Quid (NI only)
                                                                                                                                                • Key facts
                                                                                                                                                  • Product portfolio
                                                                                                                                                    • Recent developments
                                                                                                                                                      • Peachy (NI only)
                                                                                                                                                        • Key facts
                                                                                                                                                          • Product portfolio
                                                                                                                                                            • Recent developments
                                                                                                                                                              • Sunny (NI only)
                                                                                                                                                                • Key facts
                                                                                                                                                                  • Product portfolio
                                                                                                                                                                    • Figure 35: Sunny loan portfolio with corresponding repayment terms, NI, 2018
                                                                                                                                                                  • Recent developments
                                                                                                                                                                    • Personal loan providers
                                                                                                                                                                      • Amigo Loans (NI only)
                                                                                                                                                                        • Key facts
                                                                                                                                                                          • Product portfolio
                                                                                                                                                                            • Recent developments
                                                                                                                                                                              • Avantcard (RoI only)
                                                                                                                                                                                • Key facts
                                                                                                                                                                                  • Product portfolio
                                                                                                                                                                                    • Figure 36: Avantcard loan amounts with interest rates and APRs, RoI, 2018
                                                                                                                                                                                  • Recent developments
                                                                                                                                                                                    • Chill Money (RoI only)
                                                                                                                                                                                      • Key facts
                                                                                                                                                                                        • Product portfolio
                                                                                                                                                                                          • Figure 37: Chill Money personal loan amounts with interest rates and APRs, 2018
                                                                                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                                                                                        • Majority of consumers owe money on loan or credit product
                                                                                                                                                                                          • Majority of consumers have low-value, generally manageable debts
                                                                                                                                                                                            • Consumers' borrowing largely sensible and sustainable
                                                                                                                                                                                              • Future borrowing likely to be for sensible, practical reasons
                                                                                                                                                                                              • Ownership of Loans and Credit Products

                                                                                                                                                                                                  • Most consumers owe money on a credit or loan product
                                                                                                                                                                                                    • Figure 38: Credit/loan products that consumers currently owe money on, NI and RoI, November 2018
                                                                                                                                                                                                  • ABC1s and high earners most likely to owe money on credit cards
                                                                                                                                                                                                    • Figure 39: Consumers who currently owe money on a credit card, by social class and gross annual household income, NI and RoI, November 2018
                                                                                                                                                                                                  • Credit union loans popular among women, over-55s and C2DEFs in RoI
                                                                                                                                                                                                    • Figure 40: Consumers who currently owe money on a credit union loan, by gender, age, employment status and social class, RoI, November 2018
                                                                                                                                                                                                  • Women, 18-24s and ABC1s in NI particularly likely to have a student loan
                                                                                                                                                                                                    • Figure 41: Consumers who currently owe money on a student loan, by gender, age, social class and gross annual household income, NI, November 2018
                                                                                                                                                                                                  • High earners’ above-average tendency to be overdrawn
                                                                                                                                                                                                    • Figure 42: Consumers who currently owe money on a current account overdraft, by age, social class and gross annual household income, NI and RoI, November 2018
                                                                                                                                                                                                  • Significant minority have no outstanding loans or debts
                                                                                                                                                                                                    • Figure 43: Consumers who do not currently owe money on any loan or credit product, by social class and gross annual household income, NI and RoI, November 2018
                                                                                                                                                                                                • Value of Loans and Credit Products Owned

                                                                                                                                                                                                    • Majority of consumers have 'manageable' debt levels
                                                                                                                                                                                                      • Figure 44: How much consumers currently owe on loans or credit products (excluding mortgages and student loans), NI and RoI, November 2018
                                                                                                                                                                                                    • C2DEFs and low earners most inclined to have low-value debts
                                                                                                                                                                                                      • Figure 45: Consumers who currently owe less than €600/£500 on loans or credit products (excluding mortgages and student loans), by social class and gross annual household income, NI and RoI, November 2018
                                                                                                                                                                                                    • ABC1s and high earners most inclined to have high-value debt levels
                                                                                                                                                                                                    • Reasons for Most Recent Loan

                                                                                                                                                                                                        • Consumers borrowing to 'invest' in themselves, homes or families
                                                                                                                                                                                                          • Figure 46: Main reason for taking out most recent loan, NI and RoI, November 2018
                                                                                                                                                                                                        • A third of RoI and a fifth of NI consumers borrowed for car/vehicle
                                                                                                                                                                                                          • Figure 47: Consumers who took out their most recent loan to pay for a new car/vehicle, by age and gross annual household income, RoI, November 2018
                                                                                                                                                                                                        • Major purchases/expenses other relatively common reasons for borrowing
                                                                                                                                                                                                          • More than an eighth of all consumers borrowed to make ends meet
                                                                                                                                                                                                          • Reasons for Future Borrowing

                                                                                                                                                                                                              • Consumers would borrow for vehicles, home repairs and household items
                                                                                                                                                                                                                • Figure 48: Reasons consumers would consider taking out a loan in the future, NI and RoI, November 2018
                                                                                                                                                                                                              • Openness to borrowing for new car/vehicle consistent across all ages
                                                                                                                                                                                                                • Figure 49: Consumers who would consider taking out a loan to pay for a new car/vehicle in the future, by age, NI and RoI, November 2018
                                                                                                                                                                                                              • Women and 35-54s would borrow to spend on their home
                                                                                                                                                                                                                • Figure 50: Consumers who would consider taking out a loan to pay for home improvements/repairs in the future, by gender and age, NI and RoI, November 2018
                                                                                                                                                                                                                • Figure 51: Consumers who would consider taking out a loan to pay for a large household item (eg a new boiler) in the future, by gender and age, NI and RoI, November 2018
                                                                                                                                                                                                              • Consumers aged 25-44 most open to borrowing for holiday or special occasion
                                                                                                                                                                                                                • Figure 52: Consumers who would consider taking out a loan to pay for a holiday in the future, by gender, age and social class, NI and RoI, November 2018
                                                                                                                                                                                                                • Figure 53: Consumers who would consider taking out a loan to pay for a special occasion (such as a wedding) in the future, by gender, age and social class, NI and RoI, November 2018
                                                                                                                                                                                                              • C2DEFs borrow to make ends meet, ABC1s borrow to consolidate debts
                                                                                                                                                                                                                • Figure 54: Consumers who would consider taking out a loan to help make ends meet in the future, by social class, NI and RoI, November 2018
                                                                                                                                                                                                                • Figure 55: Consumers who would consider taking out a loan to consolidate debts/pay off other credit products in the future, by social class, NI and RoI, November 2018
                                                                                                                                                                                                              • Older consumers and low earners resistant to borrowing for any reason
                                                                                                                                                                                                                • Figure 56: Consumers who would not consider taking out a loan in the future for any reason, by gender, age and gross annual household income, NI and RoI, November 2018
                                                                                                                                                                                                            • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                              • Data sources
                                                                                                                                                                                                                • Abbreviations

                                                                                                                                                                                                                Loans and Credit - Ireland - January 2019

                                                                                                                                                                                                                US $2,552.20 (Excl.Tax)