AIB seeks to enhance its green credentials with car leasing investment

Nifti joint venture with Autolease comes ahead of the ECB's stress-test of European banks' environmental credentials

AIB's head of retail banking said the new joint venture is part of the bank's drive towards sustainability. Picture: Artur Widak/NurPhoto

AIB has agreed to buy 50% of a car leasing firm in a bid to improve and accelerate its ‘green’ credentials and lending ambitions.

The move comes amid a growing focus on how climate-conscious banks really are in terms of their lending behaviour.

Pending regulatory approval from the Competition and Consumer Protection Commission, AIB will spend an initial €6m acquiring a 50% stake in Dublin company Autolease Fleet Management. The bank intends to use the new joint venture agreement to offer car leasing options to businesses and personal customers, enabling them to switch to electric and hybrid vehicles.

The new joint venture will trade as NiftiBusiness and Nifti Personal Leasing. AIB has said it will make further investment, beyond the initial €6m spend, to facilitate the expansion of the business. AIB’s head of retail banking, Jim O’Keeffe, said: 

AIB’s ambition is that green and transition lending will account for 70% of our new lending by 2030 as we seek to support our customers in the transition to a low carbon future.

“This joint venture is happening at a time when the drive towards sustainability and the need to protect our environment is encouraging many businesses and people to re-evaluate their fleet management and private motoring needs and to demand sustainable and environmentally-friendly solutions,” he said.

AIB said, earlier this year, that its ‘green’ lending activity grew by a fifth last year, taking in loans for renewable projects, electric vehicle purchases, and lower rate mortgages for energy efficient home purchases.

Banks' green credentials to be tested

Both it and Bank of Ireland will be part of a European-wide stress test programme being undertaken by the ECB next year which will basically audit banks’ green credentials and measure the carbon intensity of their loan books.

Autolease said the new partnership with AIB strengthens its position and will allow it to cater for a wider range of customer including SMEs, personal drivers and larger corporations that are looking to move to greener fleets.