Table of Contents
Executive Summary
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- The market
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- Figure 1: Credit advanced to private households (excluding mortgage loans for property purchase), IoI, RoI and NI, 2013-22
- Forecast
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- Figure 2: Indexed value of outstanding consumer credit and other loans, actual, estimated, forecast and projected, RoI and NI, 2013-22
- Market factors
- Both Irish economies doing well, despite underlying doubts
- Credit conditions worsen for NI, but improve for RoI consumers in 2017
- Consumer confidence high – but with a notable caveat
- Most Irish consumers say own finances are 'healthy' or 'OK'
- Companies and brands
- Permanent TSB, Ulster Bank and AIB all suffering from legacy issues
- Bank of Ireland announces downsize of up to 1,000 staff
- Chill Money betting on speed of processing and collaborative approach to drive sales
- Credit unions score highly for customer experience
- Credit Reporting Act comes into force in RoI from 30 June
- The consumer
- Almost two thirds of consumers have an outstanding loan or credit
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- Figure 3: Types of loans and credit products owned, NI and RoI, November 2017
- Main reason to take out loan is to finance purchase of new car/vehicle
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- Figure 4: Main reason for taking out most recent loan, RoI and NI, November 2017
- Consumers value familiarity, control and transparency
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- Figure 5: Agreement with statements relating to loans, RoI and NI, November 2017
- What it means
The Market – What You Need to Know
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- Both Irish economies doing well, despite underlying doubts
- Credit conditions worsen for NI, improve for RoI consumers in 2017
- Consumer confidence high – but with a notable caveat
- Most Irish consumers say own finances are 'healthy' or 'OK'
Market Size and Forecast
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- Value of outstanding loans down 6% from 2013-17
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- Figure 6: Credit advanced to private households (excluding mortgage loans for property purchase), IoI, RoI and NI, 2013-22
- Borrowing expected to reach almost €31 billion by 2022 on all-Ireland basis
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- Figure 7: Indexed value of outstanding consumer credit and other loans, actual, estimated, forecast and projected, RoI and NI, 2013-22
Market Drivers
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- Economic conditions bode well for loans market in RoI
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- Figure 8: Key economic indicators, RoI, actual, estimated and forecast, 2016-18
- Figure 9: Labour market summary, estimated and forecast, 2016-18
- NI economy continuing to grow, despite Brexit doubts
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- Figure 10: Economic growth, annual % increase, estimated and forecast, NI and UK, 2017-19
- Figure 11: Unemployment rate, NI, estimated and forecast, 2017 and 2018
- Credit conditions deteriorated for UK (including NI) consumers in 2017
- Increased demand, eased credit conditions in eurozone in Q4 2017
- RoI consumers feeling positive, but not overly optimistic
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- Figure 12: Consumer sentiment index, RoI, December 2016-December 2017
- Doubts and anxiety weighing slightly on NI consumer confidence
- Majority of consumers rate finances as being either 'healthy' or 'OK'
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- Figure 13: How consumers rate their own financial situation, NI and RoI, November 2017
- Decline in number of RoI consumers describing situation as 'healthy'
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- Figure 14: Consumers who rate their own financial situation as being 'healthy', NI and RoI, October 2014-October 2017
Companies and Brands – What You Need to Know
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- Permanent TSB, Ulster Bank and AIB all suffering from legacy issues
- Bank of Ireland announces downsize of up 1,000 staff
- Chill Money betting on speed of processing and collaborative approach to drive sales
- Credit unions score highly for customer experience
- Credit Reporting Act comes into force in RoI from 30 June
Companies and Brands
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- AIB/First Trust
- Key facts
- Product portfolio
- Recent developments
- Ulster Bank
- Key facts
- Product portfolio
- Recent developments
- Avant Card
- Key facts
- Product portfolio
- Recent developments
- Permanent TSB
- Key Ffcts
- Product portfolio
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- Figure 15: Permanent TSB interest rates, 2017
- Recent developments
- Bank of Ireland
- Key facts
- Product portfolio
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- Figure 16: Bank of Ireland interest rates, RoI, 2017
- Recent Developments
- Chill Money
- Key facts
- Product portfolio
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- Figure 17: Chill Money interest rates, 2017
- Recent developments
- Dubco Credit Union
- Key facts
- Product portfolio
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- Figure 18: Dubco Credit Union interest rates, 2017
- Recent developments
- Irish League of Credit Unions
- Key facts
- Product portfolio
- Recent developments
- First Direct
- Key facts
- Product portfolio
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- Figure 19: First Direct interest rates, 2017
- Recent developments
- KBC Ireland
- Key facts
- Product portfolio
- Recent developments
Who’s Innovating?
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- Chatbots helping to assist loans application process
- Fintech companies changing the loan process, but traditional banking still appeals
- Loans as Christmas gifts
The Consumer – What You Need to Know
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- Almost two thirds of consumers have an outstanding loan or credit
- Main reason to take out loan is to finance purchase of new car/vehicle
- Consumers value familiarity, control and transparency
Ownership and Value of Loans/Credit Products
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- Majority of consumers have an outstanding loan or credit
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- Figure 23: Types of loans and credit products owned, NI and RoI, November 2017
- ABC1s and 35-54s most likely to have outstanding credit card balances
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- Figure 24: Consumers who currently owe money on a credit card, by age and social class, NI and RoI, November 2017
- Around one in six consumers have an outstanding personal loan
- Consumers aged 25-34 most likely to have an outstanding personal loan
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- Figure 25: Consumers who currently have an outstanding personal loan, by gender and age, NI and RoI, November 2017
- ABC1s more likely than C2DEFs to own personal loans
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- Figure 26: Consumers who currently have an outstanding personal loan, by social class, NI and RoI, November 2017
- A quarter of consumers in full-time employment have personal loans
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- Figure 27: Consumers who currently have an outstanding personal loan, by work status, NI and RoI, November 2017
- C2DEF women in part-time employment have credit union loans
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- Figure 28: Consumers who currently have a credit union loan, by gender and work status, RoI, November 2017
- Figure 29: Consumers who currently have a credit union loan, by social class and gross annual household income, RoI, November 2017
- Young and old, low earners and high earners most likely to be debt-free
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- Figure 30: Consumers who currently do not owe money on any loan or credit product, by age and gross annual household income, NI and RoI, November 2017
- One in five owe less than £500 (NI) / €600 (RoI)
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- Figure 31: Value of loans: how much consumers currently owe on loans and credit products, NI and RoI, November 2017
Reasons for Taking Out Loans
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- Almost a quarter borrowed to pay for a new car or vehicle
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- Figure 32: Main reason for taking out most recent loan, RoI and NI, November 2017
- Men and ABC1s in NI, 35-44s in RoI borrowing to purchase cars
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- Figure 33: Consumers who took out their most recent loan to pay for a new car/vehicle, by gender, age and social class, RoI and NI, November 2017
- Major expenses and big purchases the main reasons for borrowing
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- Figure 34: Reasons (relating to one-off purchases/major expenses) why consumers took out their most recent loan, RoI and NI, November 2017
- One in seven borrowing to help make ends meet
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- Figure 35: Reasons (relating management of personal finances) why consumers took out their most recent loan, RoI and NI, November 2017
Attitudes towards Loans
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- Familiarity, control and ease of management appeal to consumers
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- Figure 36: Agreement with statements relating to loans, RoI and NI, November 2017
- Strong majority would prefer not to have to borrow or use credit at all
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- Figure 37: Agreement with statement "I would prefer to save for the things I need rather than rely on a loan or credit", RoI and NI, November 2017
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- Figure 38: Agreement with statement "I would prefer to save for the things I need rather than rely on a loan or credit", by gender, age and social class, RoI and NI, November 2017
- Majority of consumers would welcome greater visibility and control
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- Figure 39: Agreement with statements relating to convenient management/organisation of loans and debts, RoI and NI, November 2017
- Familiarity important, although significant minority open to novelty
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- Figure 40: Agreement with statements relating to choice of lender, RoI and NI, November 2017
- Almost half of consumers would be comfortable using alternative sources of credit
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- Figure 41: Agreement with statement “I am comfortable using alternative sources of credit to fund emergency purchases (such as house repairs)”, by average daily internet usage, RoI and NI, November 2017
- Most consumers expect cost of lending to increase in coming year
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- Figure 42: Agreement with statements relating to confidence in borrowing, RoI and NI, November 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Market size rationale
- Generational cohort definitions
- Abbreviations
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