Non-prime lender and loan servicer Pepper Australia is pursuing different strategies with its recent investments in Ireland and in the local market.In Ireland, where Pepper has bought a €600 million mortgage book from GE Capital, it is hoping to expand its servicing business.Pepper chief executive Patrick Tuttle said European banks were under pressure from central banks to strengthen their balance sheets and get back to their core business. He expects more deals like the GE loan book to come to market over the next couple of years.In Australia, Pepper has bought a A$150 million auto and equipment finance portfolio from Suncorp Metway Advances Corp. It will use this acquisition as a platform to develop its own range of auto and equipment finance products.Last year, Pepper strengthened its servicing business with the acquisition of a A$5 billion portfolio of Australian mortgages from GE.The deal was completed in August and helped lift Pepper's net profit from $7.3 million in the year to December 2010 to $14.2 million last year. Tuttle said 40 per cent of the company's earnings came from the servicing side of the business last year.He said the company would make a profit of between $26 million and $28 million this year.Like a lot of non-bank lenders, Pepper suffered a funding squeeze during the financial crisis, which limited its ability to lend.And, like a number of other companies in this position, it decided to move into the servicing business. It bought a total of about $4 billion of loans from Mobius, Seiza Mortgages, All Commercial Finance and GMAC. Then, in 2011, it did its big deal with GE.No other company has had the same success in building up a servicing business that Pepper has enjoyed.Tuttle said 30 per cent of the Mobius book and 18 per cent of the Seiza book were in arrears when Pepper took them over."It is a labour-intensive job. You have to manage the loans on a relationship basis, working through modifications where necessary to achieve a sustainable loan balance."This business is a bit word of mouth. If you can deliver real performance with these books the warehouse banks will back you on other deals."Three of the big four banks backed us when we bought GE's $5 billion portfolio last year."The next item on Tuttle's agenda is the launch of a prime mortgage. Pepper's history is as a non-conforming and near-prime lender, but when it bought the GE book it took over a portfolio of prime loans.That book is running off pretty quickly (Pepper's 2011 balance sheet shows total loans and advances of $3.8 billion), and Tuttle plans is to have a prime mortgage to offer GE borrowers as they refinance.This loan will be offered to GE borrowers in a soft launch in the coming weeks. Tuttle said it may be offered through brokers in the future.Pepper is also working on a suite of auto and equipment loans, which it aims to launch in the next few months.Tuttle said the group would consider any type of