Pepper Money has become the first lender to exit the commercial property market since the onset of the pandemic.
Customers have been told the Australian owned lender will no longer make new commercial property and buy-to-let loans.
It moved into the commercial lending market just three years ago and is understood to have grown that to around €200m. The lender has now written to brokers however, saying it will cease writing new businesses. Some loan offers already at an advanced stage may still be drawn down and existing customers will continue to be serviced by Pepper, the lender said. Pepper sold its residential lending business in 2018. Commercial lending accounted for less than 5pc of Pepper Ireland’s total revenues in 2019.
The decision is not expected to have a big impact on staff numbers at Pepper, with most of the commercial lending team expected to be redeployed internally.
In a statement, Pepper Money said the decision to cease originating commercial mortgages in the Irish market followed a strategic review and is a response to the increasingly challenging market conditions, reduced availability of funding from wholesale lending markets and ongoing volatility and uncertainty in global financial markets brought about by the impact of Covid-19.