Ireland’s Credit In Hands Of Only Five Companies

The Financial Regulator has found only five firms control 95% of the entire credit-card market in Ireland.

The findings show Ireland is one of the most heavily concentrated credit markets in Europe, with AIB, Bank of Ireland and MBNA issuing the majority of all Irish credit cards.

A highly concentrated market means there is less competition in the market, allowing companies to keep a higher margin and dictate their own prices. There is also a high risk of price fixing if the companies actions are not closely monitored.

The study found personal loans current account markets are also highly concentrated.

The figures contained in the Financial Regulator's annual report show that, between 2002 and 2007 all markets analysed, except for the residential-mortgage market, became increasingly uncompetitive.

Personal finance experts said the credit-card market in Ireland was highly concentrated because the economy is small, consumer inertia meant people were reluctant to switch providers, and government stamp duty on cards made people slow to switch.

Irish people are the world's third-highest spenders on their cards, with only the Americans and the South Koreans racking up bigger plastic bills. Four out of every 10 consumers in Ireland aged 15 and over own a card, according to recent research by Mintel.

Consumer Director Mary O'Dea said in a statement in the report, she was confident consumers were more informed and the market was fairer in the five years since she took up her role. ''However, despite the good progress, many challenges remain," she said.

The Financial Regulator's report said: ''After last year's increase in concentration in the credit-card market, there was a small increase in competition this year. However, the market remains highly concentrated."

The study also found a high level of concentration in the motor-insurance market, and the property-insurance sector.

(DW)