Author: Mintel Group Ltd.
Last saved by: HTTP server

Loans & Alternate Sources of Credit - Ireland - January 2018

OVERVIEW
What you need to know
Issues covered in this Report
Definitions
EXECUTIVE SUMMARY
The market
Figure 1: Credit advanced to private households (excluding mortgage loans for property purchase), IoI, RoI and NI, 2013-22
Forecast
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
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
Figure 4: Main reason for taking out most recent loan, RoI and NI, November 2017
Consumers value familiarity, control and transparency
Figure 5: Agreement with statements relating to loans, RoI and NI, November 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
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
Value of outstanding loans down 6% from 2013-17
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
Figure 7: Indexed value of outstanding consumer credit and other loans, actual, estimated, forecast and projected, RoI and NI, 2013-22
MARKET DRIVERS
Economic conditions bode well for loans market in RoI
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
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
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'
Figure 13: How consumers rate their own financial situation, NI and RoI, November 2017
Decline in number of RoI consumers describing situation as 'healthy'
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 
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
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
Figure 15: Permanent TSB interest rates, 2017
Recent developments
Bank of Ireland
Key facts
Product portfolio
Figure 16: Bank of Ireland interest rates, RoI, 2017
Recent Developments
Chill Money
Key facts
Product portfolio
Figure 17: Chill Money interest rates, 2017
Recent developments
Dubco Credit Union
Key facts
Product portfolio
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
Figure 19: First Direct interest rates, 2017
Recent developments
KBC Ireland
Key facts
Product portfolio
Recent developments
WHO’S INNOVATING?
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
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
Majority of consumers have an outstanding loan or credit
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
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
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
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
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
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
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)
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
Almost a quarter borrowed to pay for a new car or vehicle
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
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
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
Figure 35: Reasons (relating management of personal finances) why consumers took out their most recent loan, RoI and NI, November 2017
ATTITUDES TOWARDS LOANS
Familiarity, control and ease of management appeal to consumers
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
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
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
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
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
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
Figure 42: Agreement with statements relating to confidence in borrowing, RoI and NI, November 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Market size rationale
Generational cohort definitions
Abbreviations

This report is supplied in accordance with Mintel's terms and conditions.  
© Mintel Group Ltd.