First Citizen’s interest income rose 17 per cent to €35.2 million last year, as it increased rates against the backdrop of rising market-based financing and a growing loan book. However, its interest expenses increased by 33 per cent €20.9 million.
First Citizen scaled back its reliance on Deutsche Bank last week when it raised more than €235 million on the bond markets by refinancing a portfolio of car loans through a process known as securitisation. The ECB has raised its deposit rate from minus 0.5 per cent to 4 per cent since July last year amid the most aggressive pace of monetary tightening in its history as central banks globally fight inflation. Non-bank lenders have been among those to bear the brunt of corresponding increases in market rates, while Irish banks have seen their interest margins widen, because of their reliance on cheap deposits for funding – and additional money made on surplus deposits stored with the central bank.