PTSB drives expansion into ‘huge’ British car loan market
PTSB is the biggest provider of car finance in Ireland and will this year approve more than €1 billion worth of car loans for the first time, up from the near €900m approved in 2005.
Its total loan book is currently worth about €1.7 billion. This reflects the short-term nature of car loans, which are usually paid off within 28 months.
Chris Hanlon, managing director of PTSB Finance, said the bank plans to enter the British market within three years, most probably through a joint venture. “We have a well-defined model in Ireland and we will look for a partnership in the UK,” Hanlon said. “We’ve a good game plan for Ireland and we’re working on a plan for the UK.”
Sales of new cars dipped by 5% in Britain last year as consumers struggled with rising personal debt levels, but industry analysts expect about 2.4m new cars to be shifted in 2006. This compares with sales forecasts of up to 200,000 in Ireland this year. “The UK is a huge market and one we’re very interested in,” Hanlon said.
In the meantime, the group is focusing its energies on maximising its take of the expected Special Savings Incentive Accounts-led boom in car sales over the next two years.
About €16 billion worth of SSIAs are due to mature over the next 18 months. Hanlon said its research has shown that 22% or €3.5 billion of this money will be spent on new cars.
Hanlon expects to approve up to 80,000 car loans this year, an increase of more than 25% on 2005. “It’s a good time to be in cars, we’ve had a strong start to January and I expect about 200,000 new cars to be sold this year.”
Hanlon said this growth would be fuelled by the release of SSIA funds from May and a desire by Irish people to buy more expensive marques. “In 1994, BMW sold 808 new cars here, this year we expect them to sell more than 6,000,” he said.
One well-heeled customer took a loan from the bank to help buy a €145,000 Porsche Cayenne SUV earlier this year.
PTSB has a 30% share of the car finance market, according to Hanlon. It provides finance for a range of marques, including BMW, Chevrolet, Opel, Nissan, Fiat/Alfa Romeo, Kia and Mitsubishi.