Bankinter announced on Friday that it would apply for a full Irish banking license and enter the deposit market as part of the Spanish bank's diversification strategy under the leadership of its CEO, Gloria Ortiz.

The move by Spain's fifth-largest bank by market value is seen as a major boost to competition in Ireland, where retail banking is dominated by three Irish entities: AIB, Bank of Ireland and Permanent TSB.

Bankinter said it would operate in Ireland under its own brand to offer all types of financial products to customers.

The financial crisis in Ireland led to the withdrawal from the market of Bank of Scotland (Ireland) and Danske Ireland, while the last two international banks, Ulster Bank and KBC Bank Ireland, decided three years ago to wind up their operations.

Irish Finance Minister Michael McGrath welcomed in a statement Bankinter's intention to seek regulatory approval for a full banking license.

Bankinter, which last week beat market forecasts with a 9% year-on-year rise in the first quarter, began operating in Ireland in May 2019 through Avant Money, a consumer lending-focused company regulated by the Central Bank of Ireland.

Subsequently, the Spanish bank incorporated the mortgage business into its strategy in September 2020.

Bankinter's total lending in Ireland increased 43% year-on-year in 1Q2024 to €3.3 billion ($3.54 billion), of which €2.4 billion was in mortgages.

Pre-tax profit rose 5% in the quarter to €9 million compared to the same period last year, while net interest income, the difference between loans less deposit costs, increased 11% year-on-year to €24 million in the January-March period.

(1 US dollar = 0.9314 euros)

(Reporting by Jesús Aguado; additional reporting by Graham Fahy in Dublin; editing by Alexander Smith; Spanish editing by Javi West Larrañaga)