Frontier Statistics: New Non-Bank Lending to Irish Enterprises

A View of New Non-Bank New Lending on the Central Credit Register

Non-bank lending has become an established feature of Ireland’s credit market, with an increasing presence in funding to small and medium enterprises (SMEs). The Central Bank of Ireland (the “Central Bank”) has published research pieces analysing the role of non-bank lenders in the provision of funding to Irish enterprises, as well as its financial stability implications (see “Related Publications” below). This new release provides a closer look at new lending from non-banks, including breakdowns based on lender, borrower and loan characteristics. Similar to the Frontier Statistics series on total credit, this publication is based on data from the Central Credit Register (CCR), enriched with additional sources for a higher completeness of lender and borrower details.

Key Observations

  • Monthly volumes of new lending from non-banks to Irish enterprises are volatile and tend to show signs of variability across sectors.
  • Specialist Property Lenders was the largest lending sector in 2024 Q3, followed by Asset Finance Providers. On the borrower side, Real Estate and Construction was the largest borrowing sector.
  • From a company size perspective, a larger share of Specialist Property Lenders funds went to SMEs, while Asset Finance Providers directed a larger share of funds towards large enterprises.
  • Loans with maturities at origination between 5 and 10 years form the largest share of total loans, independently of the company size. However, differences can be observed in the extremes, with large enterprises having a larger share of open-ended loans.

This Frontier Statistics release page is updated with new data periodically. Historical data can be accessed in the data file at the end of this page.

Key Indicator – New Non-Bank Lending to Irish Enterprises

New non-bank lending to Irish enterprises was €327 million in September 2024

Time series and sectoral breakdowns of new lending from non-banks

Chart 1: Real Estate and Construction is the largest borrower sector

Monthly new non-bank lending flows by borrower sector, January 2023 to September 2024

Bar chart of new non-bank lending to Irish enterprises, broken down by borrower sector. Full summary below in notes.
Notes: The time series shows month-on-month variability in new non-bank lending, which is heterogeneous among lender sectors. New non-bank lending to Irish corporates was €327mn in September 2024.

Chart 1 shows borrowers in the Real Estate and Construction sector to be the largest recipients of non-bank funds, followed by Wholesale and Retail and Administrative Services. The Real Estate and Construction sector shows signs of high variability in the period, which is potentially driven by the nature of such loans, usually of higher value and lower frequency. For instance, during the period, lending to this sector as a share of the total was 42% on average, reaching levels as low as 17% and as high as 72%. This contrasts with loans to companies in the Wholesale and Retail sector, which showed more stability throughout the year.

Chart 2: Amongst lender categories, Asset Finance Providers tend to be the largest lender

Monthly new non-bank lending flows by lender sector, January 2023 to September 2024

Bar chart of new non-bank lending to Irish enterprises, broken down by lender sector. Full summary below in notes.
Notes: The time series show month-on-month variability in new non-bank lending, which differs by borrower sector. New non-bank lending to Irish corporates was €327mn in September 2024.

Chart 2 shows the same series but from the lenders perspective. New non-bank lending flows tend to be provided by Asset Finance Providers, Specialist Property Lenders and General Lenders, representing 82% of total new loans. In contrast to the borrower’s sectoral breakdown, lender sectors shown in the chart capture most of the market, with the Other Lender Sectors less prominent compared to the equivalent on the borrower side.

Key Indicator – New Non-Bank Lending to Irish Enterprises

New non-bank lending to Irish enterprises was slightly above €1bn in Q3 2024

Chart 3: New lending from Non-Banks is more concentrated at origination, while flows diversify in destination

New non-bank lending flows from lender to borrower sectors, 2024 Q3

Chord chart showing flows from lender sectors to borrower sectors. Full summary below in notes.
The chart shows that Specialist Property Lenders was the main non-bank lender sector in 2024 Q3, with new loans worth €398mn in the quarter, while Real Estate and Construction received a the largest share of funds in the same period, with €459mn worth of new loans received.

Chart 3 shows new non-bank lending flows from lender sectors to borrower sectors. Specialist Property Lenders was the largest lender sector in 2024 Q3, extending new loans worth €398mn in the month and accounting for more than one third of total new loans granted by non-banks. Asset Finance Providers extended loans worth €328mn, while new loans from General Lenders stood at €225mn over the same period. On the borrower’s side, Real Estate and Construction was the largest recipient of funds, with new loans worth €459mn, mostly from Specialist Property Lenders. Other Borrower Sectors remained large in 2024 Q3, with €318mn in new loans. Except for the strong natural links between property-related sectors on the lender and borrower sides, lending in 2024 Q3 appears to be diverse at destination, with borrower sectors except Real Estate and Construction receiving new loans from different issuer sectors.

Key Indicator – New Non-Bank Lending to Irish Enterprises

SMEs received loans from non-banks worth €625mn in 2024 Q3, while new loans to larger companies stood at €405mn on the same period

Chart 4: Borrower size is relevant, with sources of new loans from Non-Banks visibly different depending on the size of the company

New non-bank lending flows by lender sector and borrower size, 2024 Q3

Sankey diagram of new lending flows. Left-hand side shows a breakdown of lender sectors, while right-hand side shows a breakdown of borrower size.  Full summary below in notes.
The chart shows that Specialist Property Lenders and Asset Finance Providers are the main non-bank lender sectors in 2024 Q3, while SMEs receive a higher share of new loans than large enterprises.

Chart 4 shows flows between non-bank lender sectors and enterprises segregated by their size. The largest flow observed in 2024 Q3 was driven by new loans from Specialist Property Lenders worth €398mn, or 39% of total new loans. Most were loans to SMEs, representing in fact their largest source of finance by lender sector, with more than one third of loan value. Asset Finance Providers and General Lenders were the second and third largest sources of new lending in 2024 Q3, providing loans worth €328mn and €225mn, respectively. Three lender sectors provided most of the funds to SMEs with close enough shares, compared to just two lender types accounting for a significant portion of total loans to large enterprises.

Chart 5: Other Loans was the most represented loan type category in 2024 Q3, followed by Asset Finance

New non-bank lending by loan type, 2024 Q3

Donut chart showing a breakdown of new non-bank lending in 2024 Q3 by loan type.  Full summary below in notes.
Notes: The chart shows that the Other Loans category was the main loan type with new non-bank lending worth €465mn in 2024 Q3.

Other Loans, which includes revolving facilities, was the largest loan type granted by non-banks in 2024 Q3, with new loans worth €465mn, close to half of the total value of new lending in the quarter. Asset Finance loans was the second largest category, accounting for more than 25% of new loans in the quarter, or €318mn. Mortgage Loans and Term Loans followed with similar values in the quarter, extending new loans worth €132mn and €115mn, respectively.

Chart 6: Maturities at origination appear to be similar across borrower size in 2024 Q3. However, differences are visible in the extremes

Breakdown of new non-bank loans by maturity at origination and borrower size, 2024 Q3

Bar chart showing new non-bank loans broken down by maturity at origination buckets and borrower size.  Full summary below in notes.
Notes: The bar chart shows that new non-bank loans with maturities between 5 and 10 years were the largest bucket for both company sizes. However, shares differ across company sizes for short and long-term maturities.

Chart 6 shows the breakdown of new non-bank loans by maturity at origination bucket and borrower size. Maturity buckets for loans to SMEs were relatively similar for maturities between 5 and 10 years, with 37% of the total value of new loans to SMEs and 36% of new loans to large enterprises in that bucket. The share of maturities under 5 years was slightly higher for SMEs in 2024 Q3. However, this was mostly loans with maturities between 2 and 5 years, while large enterprises received significantly more funds with maturities under 2 years. Similarly, the share of longer-term loans was close but slightly higher for large enterprises. However, most of long-term loans to SMEs had a maturity over 10 years, as opposed to large enterprises, for which long-term loans were mostly open-ended.

Data

New Non-Bank Lending to Irish Enterprises Charts 1 and 2 | csv 22 KB New Non-Bank Lending to Irish Enterprises Chart 3 | csv 1 KB New Non-Bank Lending to Irish Enterprises Chart 4 | csv 1 KB New Non-Bank Lending to Irish Enterprises Chart 5 | csv 1 KB New Non-Bank Lending to Irish Enterprises Chart 6 | csv 1 KB

Background

The CCR New Non-Bank Lending publication (henceforth referred to as “New Lending”) presents data on monthly new loans to Irish enterprises originated by non-banks. The series provides breakdowns by borrower, lender and loan type, including company size and maturity of the loan at origination. This data is published for the first time as a Frontier Statistics release, indicating that the methods and data are subject to revision.  The series will be updated on a quarterly basis and with a two-quarter lag. Read more about Frontier Statistics here.

 

CCR New Lending figures are compiled from the Central Credit Register (CCR), a database containing records of loans and loan applications of over €500 borrowed by Irish residents or governed by Irish law.  The CCR is established by the Central Bank of Ireland under the Credit Reporting Act 2013 as amended. As such, lenders are required to submit information on loans to the CCR.

 

This publication provides additional context to the Irish credit landscape alongside the Central Bank of Ireland Official SME and Large Enterprise Bank Credit and Deposits. Notable differences between these publications may be explained in the Coverage and Scope section.

 

Coverage and Scope

The CCR scope and coverage, from which this publication is sourced, is broader than the New Lending series. This publication looks exclusively at non-bank lenders, and in particular, at non-bank lenders that are originating new loans. Loans provided by the Government (including Government-sponsored agencies and Local Authorities) are not included in this series.

 

Information on the types of lenders and loans included in the CCR can be found here, while the full population list is available here. An extensive description of the composition of non-banks in the CCR can be found in this Behind the Data report.

 

There are some loan types which are absent from the CCR, including tradeable assets such as loan notes and debt securities, and other loan types including trade credit, intra-group credit and utilities debt. Other loans excluded from the CCR are loans owed between credit institutions. However, loans between other financial corporations such as investment funds are included.

 

The CCR captures data on loans to individuals and companies. However, for the purposes of this publication, only new non-bank loans to companies are considered.

 

The New Lending Frontier Statistics series relates exclusively to domestic credit. Any new non-bank loan included in the CCR and identified as being to non-Irish residents is excluded.

 

Central Bank of Ireland publishes SME and Large Enterprise Bank Credit and Deposits. There are key differences in the coverage of this data compared to the New Lending data published under Frontier Statistics. One such difference is that the SME and Large Enterprise Credit and Deposits data covers resident credit institutions (i.e. banks and credit unions), while this release only focuses on credit from Non-Banks. Additionally, official statistics look at gross new lending, while the New Lending data in Frontier Statistics considers new credit agreements. The New Lending series in Frontier Statistics also provides a different sectoral breakdown of borrowers and lenders.

 

Data Checks and Revisions

As part of the Frontier Statistics series, the New Lending publication will undergo continuous revisions each quarter, and the data and methodology are subject to change. CCR data are subject to change, and therefore analysis will be repeated each quarter to ensure timeliness and accuracy in the published series.

 

Definitions

Central Credit Register (CCR): A database of loans of €500 or more borrowed by a person living in the Irish State at the time of applying for the loan, or borrowed via a loan agreement/application which is governed by Irish law. The CCR was set up in 2013 by the Central Bank of Ireland under the Credit Reporting Act 2013 (as amended). Lenders submit information on existing loans and loan applications to the CCR. See more information here.

 

Credit: Credit includes loans, deferred payments and other financial accommodations, including (but not limited to) personal loans, mortgages and commercial loans. The CCR does not include utility loans and credit provided by one credit institution to another, amongst others.

 

Borrower: Borrowers include individuals, sole traders and companies. The CCR collects information on borrowers who have made a credit application, a credit agreement or are a guarantor. They are a person (i.e. an individual or a sole-trader) or a legal entity. Only companies are in scope of this publication.

 

Lender: The CCR collects data from Credit Information Providers (Lenders). This includes Banks, Non-Banks, Local Authorities, Government and Credit Unions. In the context of this publication, only Non-Bank Lenders are considered.

 

Credit agreement covered by Irish law: The CCR contains loans whose credit agreements are covered by Irish law. Examples of this are large corporates and individuals moving in and out of the state and across the border.

 

Bank: Bank refers to licenced credit institutions, as published on the Registers section of the Central Bank website, here. This means that lending by traditional retail banks, as well as lending by international banks with limited interaction with the general public, is considered within bank lending. It also includes, where identifiable, non-bank lending entities which are owned by banks, and are therefore considered to be part of a banking group. Bank loans are not in scope of this publication.

 

Non-bank: Lenders or holders of loans which are not banks, credit unions, or government-sponsored entities. Many non-bank lenders provide specific loans or cater for specific borrowers, such as property finance and asset finance and leasing. Others provide a combination of the aforementioned loan types. Non-banks that do not originate loans, but are holders, are not in scope of this publication.

 

Asset Finance Provider: Asset Finance firms provide credit in the form of products such as hire-purchase agreements, personal contract plans, leasing contract, or loans with assets as collateral. Asset finance allows businesses to access equipment without capital expenditure, or to release value from assets they already own. These entities can also be referred to as Leasing and Asset Finance Providers. For simplicity, we refer to them as Asset Finance Providers throughout this release.

 

Credit Union: A Credit Union is a financial co-operative formed for the promotion of thrift among its members by the accumulation of their savings; the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest; and the use and control of members' savings for their mutual benefit. Credit Unions are out of scope for this publication.

 

Government: The Government sector refers to lending undertaken by any entity identified as being state controlled. This includes loans of local authorities, as well as other state bodies and agencies. It is out of scope for this publication.

 

Company Loans: This relates to loans given to companies as opposed to individuals or sole traders. It includes loans to financial borrowers, such as investment funds, as well as non-financial corporates.

 

Administrative Services:  For a detailed definition, please refer to the current version of the NACE Rev 2 Statistical classification of economic activities, in this link.

 

Wholesale and Retail:  For a detailed definition, please refer to the current version of the NACE Rev 2 Statistical classification of economic activities, in this link.

 

Large Enterprise: in the absence of a company size tag, a company is classified as large if that company, or its ultimate parent, meet any of the criteria below:

 

  •          It has more than 250 employees
  •          It has an annual turnover above €50mn
  •          It has a balance sheet above €43mn
  •          Has outstanding loans worth more than €30mn, or has been granted a single loan worth €30mn

 

SME (Small and Medium Enterprises): a company that does not meet any of the criteria below:

  •          It has more than 250 employees
  •          It has an annual turnover above €50mn
  •          It has a balance sheet above €43mn
  •          Has outstanding loans worth more than €30mn, or has been granted a single loan worth €30mn

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