AIB offers Euro 2016 loan for Irish fans as banks get personal

* AIB targets Irish soccer fans with loan offer

* Shows drive to sell more personal loans among Irish banks

* Critics sound alarm after bank bailout

By Padraic Halpin and Sinead Cruise

DUBLIN/LONDON, Dec 23 (Reuters) - Renowned for their fervent support, Irish soccer fans will be able to follow their team to next year's European championships in France with a 30,000 euro ($32,800) loan in their back pocket from one the country's bailed out banks.

State-owned Allied Irish Banks (Berlin: 30544177.BE - news) ' (AIB) 'Backing the boys in Green' plan has been criticised by one government lawmaker as "smacking of the economic euphoria of the past" when Irish lenders needed the euro zone's costliest bank bailout.

Rivals say they would consider similar applications even if they do not plan to copy AIB's offer to fund "the once in a lifetime trip to France". The AIB scheme highlights how Ireland (Other OTC: IRLD - news) 's recovering banks are becoming more inventive as they seek to lend to consumers in Europe's fastest growing economy.

Banks are pulling every lever they can to push growth as new central bank restrictions and a chronic shortage of housing supply have capped mortgage lending at half the level considered normal, potentially hampering a fledgling recovery.

"Given where the mortgage market is, there will be a much bigger focus on non-mortgage lending and as the economy picks up, banks will look at opportunities across a range of spaces," said Diarmaid Sheridan, an analyst at Davy Stockbrokers.

"Personal (LSE: PGH.L - news) lending is a relatively small part of an Irish bank's balance sheet."

GETTING PERSONAL

AIB's corporate, business and growing UK arm made up 75 percent of new lending in the first half of the year when it tripled its profits. In that period, the bank extended almost half as much money to personal customers as it did to those seeking a mortgage.

Emphasising the scale of the mortgage problem, that was despite personal lending accounting for just 5 percent of AIB's 64 billion euro loan book compared to 55 percent for mortgages.

All lenders have identified unsecured personal loans as a growth area. Most of them brought out home improvement loan products last year when the government introduced a tax break for repair and renovation to help the construction market.

Motor finance, an area of particular strength for Bank of Ireland (EUREX: 1269463.EX - news) , is also growing after more cars were sold in Ireland in the first seven months of this year than in the whole of 2014, as sales return towards pre-crisis levels.

Royal Bank of Scotland (LSE: RBS.L - news) 's Ulster Bank last month cut its rates on all fixed-rate personal loans up to 40,000 euros while mortgage lender permanent tsb (PTSB) this week moved into the small business sector for the first time.

SPECIAL EVENTS

A spokeswoman for AIB, which could be listed on the stock market again next year, said 75 percent of its personal loans are for home improvement, car purchase and education.

Responding to the criticism of their Euro 2016 product, she said the average size of a personal loan at the bank is 6,000 euros and are approved based on a customer's ability to repay.

Ireland have been drawn to play Sweden, Italy and Belgium in the group stages of the tournament in June.

While AIB is alone among lenders in Britain and Ireland in offering such a tailor-made product, most banks in England, Wales and Northern Ireland - whose national teams have also qualified for the tournament - said they would also help to fund cash-strapped fans.

A spokeswoman for Barclays (LSE: BARC.L - news) , lead sponsor for English soccer's Premier League, said they would not typically decline requests from fans bound for France.

HSBC, another big sports sponsor, said loans of up to 15,000 pounds ($22,300) were available for borrowers looking for a holiday of a lifetime, whether that entailed "following their team in France or even going further afield and following Formula One".

RBS also offers holiday loans to customers who need help spreading the cost of travel for family weddings or 'events abroad' that its customers 'simply cannot miss', its website showed. ($1 = 0.9149 euros) ($1 = 0.6726 pounds) (Editing by Keith Weir)