LATEST: New bank enters Irish market and it's huge for customers

The entry of Spanish bank, Bankinter, to the Irish market "augurs well" for Irish consumers and businesses, according to Brokers Ireland.

Rachel McGovern, Director of Financial Services at Brokers Ireland said: ”The lack of competition in the Irish banking market is widely acknowledged, with the three pillar banks holding 90% of new mortgage lending.

“And if Bankinter is about to start with the deposit side of banking then they are going right to where most fat lies, with Irish people having over €150 billion on deposit, mostly in low yielding accounts, among the weakest rates in Europe,” she said.

The Spanish lender announced it intends to use its subsidiary Avant Money as an Irish banking branch on Friday.

The company said the move, which would provide Avant with a full banking licence, would enable it to offer a wider range of financial products and services on top of the mortgages, personal loans and credit cards it currently provides, with an expectation that other services will follow in the future.

Ms McGovern said Avant Money, Bankinter’s brand in the Irish market already has competitively priced mortgage interest rates and has retained its longer-term fixed interest rates while competitors have pulled back on the better of these in recent times.

“All in all a new competitive force in the market augurs well, both in terms of interest rates and in terms of product offerings,” she said.

“Along with the anticipated ECB lowering of its interest rate, probably mid-year, today’s news will bring a bit more optimism for the 80,000 or so who are coming off fixed interest rates in the year ahead and who up to now were facing the prospect of much higher rates.”

Bankinter's offering is set to be digital only and the lender will not open any branches here.

The Minister for Finance, Michael McGrath, welcomed the announcement from Bankinter.

"The intention of another European bank, Bankinter, to establish a branch in Ireland to provide a range of banking products is a very welcome development," he said in a statement.

“Today’s announcement by a significant European Bank is also a vote of confidence in the strength of the Irish economy."