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February 19, 2020

State-backed lessor Finance Ireland ponders IPO for May

By Alejandro Gonzalez

Finance Ireland, a state-backed non-bank specialising in asset finance and leasing, is planning an IPO on the Irish Stock Exchange in May, the Irish Times has reported

Finance Ireland was established in 2002 and has two large shareholders, US investment management firm Pimco and the Ireland Strategic Investment Fund (ISIF), a sovereign development fund of the Irish government. 

ISIF and Pimco, which own 31 per cent stakes in Finance Ireland each, seek to raise more than €100m (£85m) from the IPO, subject to market conditions, the Irish Times reported. 

The business’s loan book, which includes leasing finance, motor finance, agri-lending and a real-estate portfolio – reached €1bn in 2018 as new lending grew by 13 per cent to €491m, the Irish Times said. 

The outcome from the general election on 8 February, which opened the possibility of a coalition government, with Sinn Fein holding the highest vote share, followed by Fianna Fail and Fine Gael, is likely to affect the timing and appetite for IPO stocks of Irish Financial.  

In a related development, accountancy firm EY revised upwards its forecast for the Republic of Ireland, saying it expects to see GDP growth of 3.4% for 2020 (and 2.8% in 2021 and 2.7% in 2022). EY revised the forecast in the wake of the general election.

After the crash

Finance Ireland delisted from the Dublin and London stock exchanges in 2008, following its foray into subprime mortgage lending in the republic.

The lender stopped writing new business in 2009 but returned to lending in 2011, focusing on motor finance, with backing from UK merchant bank Close Brothers, according to the Irish Times. 

Billy Kane, the chief executive of Finance Ireland, was formerly the chief executive of Irish Permanent and a director of Irish Life & Permanent plc, according to Finance Ireland’s website.

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