Dilosk seeks full authorisation from Central Bank as it takes on BoI loans

The company taking over €250m of Bank of Ireland mortgages has applied to the Central Bank for full authorisation and intends to fully comply with all codes related to mortgage lending and arrears.

The newly formed Dilosk aims to focus mostly on the buy-to-let sector.

Bank of Ireland’s sale of ICS Building Society was the last measure needed to comply with its EU restructuring plan.

As part of the sale of the €250m mortgage book to Dilosk, Bank of Ireland agreed to provide the firm with €100m in senior finance.

“Completion of Bank of Ireland’s final EU imposed restructuring plan divestment commitment — following the receipt of State aid — is a positive development for the bank and should allow management to allocate more resources to other important areas — such as asset growth and working out its stock of impaired loans,” said Merrion Stockbrokers analyst Ciaran Callaghan.

“Although we doubt Bank of Ireland has sourced much, if any, new lending through its ICS distribution platform in recent years, its disposal means that the bank is likely to be more reliant on its branch network going forward.”

Under the original EU Restructuring Plan, it was proposed that Bank of Ireland sell its life assurance business, New Ireland. However, as reported by the Irish Examiner in October 2012, the bank had lobbied the European Commission to retain New Ireland. The sale of ICS was agreed instead.

Dilosk chief executive and co-founder Fergal McGrath said: “We plan to grow our business by offering new residential mortgage loans and we aim to ensure that the ICS mortgage brand under Dilosk ownership will remain a leading and trusted mortgage brand in the mortgage market.”