Loan services company Pepper Ireland is returning to the commercial lending sector to seize emerging opportunities in the post-pandemic Irish market after a one-year hiatus.
The company, majority owned by US private equity firm KKR, now offers commercial mortgages to SMEs and rental investors looking to acquire properties or refinance existing loans.
The move reverses Pepper’s decision to stop creating commercial mortgages for Irish borrowers in September 2020 due to a funding cut in the wholesale lending markets and general uncertainty over Covid-19.
Today, with the departure of KBC Bank Ireland and Ulster Bank from the market, the company seeks to regain momentum for growth by completing the portfolio of 200 million euros of commercial loans that it established between 2017 and 2020. .
The move to revert to commercial lending also follows the failure in February of a â¬ 200 million deal for Link Group to purchase Pepper European Services, which includes Pepper Ireland.
âWe are delighted to be able to resume our commercial loans in Ireland,â said Cormac Ryan, CEO of Pepper Ireland.
“The decision reflects not only improving conditions in the financial markets, but also growing customer demand and the opportunity to bring even more choice and competition to the Irish market, which has always been the Pepper method. . “
Pepper Ireland, which already manages â¬ 18 million in loan assets on behalf of other lenders as part of its core business, said it would offer funding ranging from $ 250,000 to $ 9.95 million. euros over a period of up to seven years.
The company emphasizes its flexibility as a lender with interest-free periods and the ability to spread payments over terms of up to 30 years. It also encourages borrowers who cannot obtain loans due to historical credit problems to apply for financing.
Australia-based Pepper Group entered the Irish market in 2012 after acquiring GE Capital Woodchester Home Loans, a subprime lender struggling during the financial crisis.
The portfolio included 3,500 Irish mortgage loans with over â¬ 600 million in receivables. Pepper also took over the management of GE Capital’s larger Irish portfolio of personal, small business and auto loans.
Pepper Ireland also had a mortgage origination business which it sold to Finance Ireland in October 2018. The portfolio consisted of approximately 900 loans with a total value of EUR 200 million.
But its activity has largely consisted of paying off service contracts for the large loan portfolios that Irish banks were forced to cede to vulture funds following the crash.
Last month, the company won a contract to manage â¬ 1.1 billion of non-performing loans that KBC sold to CarVal as part of the Belgian bank’s exit from the Irish market.
Today it has 450 employees in Ireland, based in Dublin and Shannon.
Last year, Link Group, a listed financial services company in Australia, agreed to buy Pepper European Services.
The company pulled out of the sale after regulatory approvals could not be obtained before the Jan. 31 deadline stipulated in the original acquisition agreement.
Pepper Group said at the time that it would postpone the sale of its European business and instead focus on growing its business.