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Personal Loans - Ireland - September 2005
Finance: Ireland Price: £718 / $1089 / €825
Report sections
click here to read 'about this report' »
Contents
Introduction
Executive Summary
Market Factors
Market Size and Segmentation
Supply Structure
Distribution
The Consumer
The Future
Forecast
Latest news updates to this report
(click here for all news updates »)
1-07-2008  IL&P to buy Merrill out of joint venture
4-04-2008  NIB streamlines, closes branches
2-08-2007  BoSI profits up 14%
8-06-2007  Regulator wants more protection for sub-prime lenders
22-05-2007  EU ministers back liberalisation of lending market
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About this report

In response to increasing demand for data concerning the dynamic economy and growth markets of Northern Ireland and The Republic of Ireland, Mintel has developed a series of reports covering a wide variety of sectors within both of these dynamic regions. Each one provides detailed coverage of key drivers as well as providing the very latest volume and value data. Also included are assessments of emerging trends, the activities of existing market players, brand ownership details, supply structures, future scenarios and statistical forecasts.

The Irish Series is segmented in the same manner as Mintel's UK reports, namely Finance, Leisure, Market, Retail and 'Specials'. This provides unparalleled coverage and will be a must for all companies who are either already active in this region, or will be looking to enter these distinct marketplaces in the future.

This report has been produced as part of Mintel's Irish Series and is sold in Ireland exclusively through our sales agency, OCO Consulting, based in Belfast.

If you want more details about this particular report, please contact the Mintel information team on  +1 312-932-0400 in the U.S.,  +44 028-90-241-849 in Northern Ireland,  +353 048-90-241-849 in the Republic of Ireland or  +44 (0)20-7606-6000 in the UK and the rest of the world, or email info@mintel.com.
Key words and phrases within this report

RoI; APR; Ireland; Bank; Northern Bank; National Irish Bank; GE Money; Internet; Ulster Bank; Permanent TSB; ATM; Spending priorities; England; AIB; HSBC; Alliance & Leicester; EBS; First Trust; Northern Ireland; The economy; Abbey; Nationwide; Direct banking; Sources of credit; Credit unions; Penetration of personal loans; Danske Bank; Tesco; Irish; Halifax; Northern Rock; Tesco Personal Finance; SSIA; GDP; Black Horse; FlexiLoan; Lifechoice; Motor Plan; Laser; Ownership of other financial products; Playschool Parents; Scotland (Ireland; Republic; APRs; Accelerator; ATMs; Belfast; Dublin; EBS Building Society; GE Money Ireland; Irish Bank; Irish Life & Permanent; Moneyback Bank; Tesco Ireland; The Royal Bank; Millward Brown Ulster; Primary School Parents; Southern; Unconstrained Couples
Contents

Introduction

Definitions

Geographical, national and regional definitions

Conversion factors

Population

Exchange rates

BMRB Target Group Index sample sizes

Abbreviations

Executive Summary

In 2005 lending to households reached €21 billion in RoI while lending to individuals amounted to £2.6 billion in NI

The threat from substitutes: overdrafts in RoI, credit cards in NI

Remortgaging and top-up mortgages likely to have adverse effect on the market

Car finance an important and growing segment in the personal loans market

Attitudes towards credit have changed

The domino effect of credit cards

Credit union movement is the leading provider of unsecured personal loans in RoI and NI

APRs continue to get more competitive

Ownership of personal loans slightly higher in NI

Key groups for personal loans are 25-34-year-olds, the more affluent and parents of young children

Consumers with a personal loan show a higher tendency to own other financial products

It is not reckless spending which turns consumers to a loan, it is the inability to save

Spending priorities an important factor for loan providers to consider

Future prospects mixed for the personal loans market

Market Factors

The economy

Figure 1: Health of the economy, percentage growth, RoI and NI, 2002-06

Interest rates will impact on demand and type of personal loan

Figure 2: Eurozone short-term interest rates, 1999-2004
Figure 3: Bank of England base rates, 1999-2005

RoI and NI consumers’ hunger for credit

Moving onto the property ladder is proving a stretch for some

Borrowing to keep up with the Joneses

Figure 4: Usage of credit, by area of spending, NI, February 2004

Homeowners releasing equity in their homes

Other forms of credit

Everyone wants a piece of the pie

Market Size and Segmentation

Figure 5: Lending to private households in RoI and individuals in NI (excluding residential mortgages and credit cards), 1999-2005
Figure 6: Lending (excluding residential mortgages and credit cards) per capita, RoI and NI, 1999-2005

RoI consumers opt for a variety of credit terms

Figure 7: Segmentation of consumer credit, by loan term, RoI, 2003 and 2005

Higher preference for credit cards among NI consumers

Figure 8: Segmentation of household borrowing, by type of credit, NI, 2000 and 2005

Car finance constitutes an important segment of the market

Supply Structure

Figure 9: Price comparison of selected RoI personal loan providers, by APR, 7th August 2005
Figure 10: Price comparison of UK personal loan providers, by APR, 17th August 2005

Abbey

AIB

Alliance & Leicester

Bank of Ireland

Credit unions

Figure 11: Value and volume of new credit union loans advanced each year, RoI and NI, 2001 and 2003
Figure 12: Average size of outstanding loan held with credit unions, RoI and NI, 2000-04

EBS

GE Money

Halifax

HSBC

National Irish Bank

Nationwide

Northern Bank

Permanent TSB

Ulster Bank

Other providers

Distribution

Collectively, banks are the most popular source for personal loans in RoI and NI

Figure 13: Distribution of loans, by source, RoI and NI, 2004

Borrowers have other options for personal loans

Branch networks on the increase in RoI…

Figure 14: Branches of clearing bank groups, RoI, 1999-2004

…but there is evidence of rationalisation among NI’s ‘Big Four’

Figure 15: Branches of leading NI banks, 1999-2004

Direct banking

Figure 16: Awareness and usage of telephone and Internet banking, RoI and NI, 2004

Additional channels for personal loans?

The Consumer

Lifestage definitions and population sizes

Figure 17: Lifestage definitions and lifestages as % of population, RoI and NI, 2004

Penetration of personal loans

Uptake of personal loans remains steady in RoI and is up slightly in NI
Figure 18: Penetration of personal loans, by gender, age and socio-economic group, RoI and NI, 2000 and 2004
AB consumers and those aged 25-34 show highest demand for personal loans
Strong link between lifestyle commitments and personal loan ownership
Figure 19: Penetration of personal loans, by working status, marital status, presence of children and lifestage, RoI and NI, 2000 and 2004

Sources of credit

Credit cards popular source of credit for both RoI and NI consumers
Figure 20: Credit held in the last 12 months, by source, RoI and NI, 2000 and 2004
Convenience an important factor when choosing credit options in NI
Key consumer groups for credit emerge

Ownership of other financial products

Borrowers in RoI and NI more likely to have more than one bank account
Figure 21: Bank account ownership and credit union membership among borrowers, RoI and NI, 2004
Borrowers in RoI and NI more likely to own a credit union account and use it
Plastic is popular with RoI and NI borrowers
Figure 22: Ownership and usage of credit/charge cards, Laser cards and debit cards, RoI and NI, 2004
Borrowers in RoI and NI favour debit cards and Laser cards for everyday transactions

Attitudes towards finance

Saving rather than spending seems to be the issue for borrowers
Figure 23: Agreement with spending habits statements among all adults and borrowers, RoI, 2004
Signs of financial literacy among RoI borrowers
Figure 24: Agreement with personal finance statements among all adults and borrowers, RoI, 2004
Personal loans offer loan providers an opportunity to showcase their customer relationship management
Saving money is also an issue for NI borrowers
Figure 25: Agreement with spending habits statements among all adults and borrowers, NI, 2004
Insurance important for RoI and NI borrowers
Figure 26: Agreement with personal finance statements among all adults and borrowers, NI, 2004
Awareness of personal finance high among NI borrowers, hinting at the possibility of uptake of additional financial products

Spending priorities

Top priority for RoI consumers is getting away from home; for NI consumers, it’s redecorating the home
Figure 27: Spending priorities among all adults, RoI and NI, 2002 and 2004
Buying a car is a priority for a fifth of RoI consumers but less of a priority for their Northern counterparts
RoI 25-34-year-olds underlined as a key target group for loan providers
Figure 28: Spending priorities, by gender and age, RoI, 2004
Women and 35-54s spending on the home in RoI
More affluent showed most tendency to have firm spending priorities in 2004
Figure 29: Spending priorities, by socio-economic group, RoI, 2004
In terms of the actual size of a consumer group, ABC1s in RoI represent a more viable target group than 25-34s
Top priority among NI adults – redecorating – was most popular among 45-54-year-olds
Figure 30: Spending priorities, by gender and age, NI, 2004
Car finance for young NI consumers offers opportunities
Spending on the home a priority for all socio-economic groups in NI
Figure 31: Spending priorities, by socio-economic group, NI, 2004
Candidates for debt consolidation include the affluent and 25-34-year-olds

The Future

Key age groups to grow in RoI but decline in NI

Figure 32: Trends in RoI population, by age band, 1999-2009
Figure 33: Trends in NI population, by age band, 1999-2009

Maturing SSIAs will have a major effect on the loans market

What effect will Danske and Bank of Scotland have on the personal loans market?

Innovation required to stimulate interest in the face of ‘sexier’ products such as the credit card

All-in-one mortgages growing in popularity

Forecast

Personal loans market in RoI set to grow by 20% in 2008

Figure 34: Lending to private households in RoI (excluding residential mortgages and credit cards), 2005-08

Similar rate of growth forecast for the NI personal loans market

Figure 35: Lending to individuals in NI (excluding residential mortgages and credit cards), 2005-08
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