Disappointment and optimism as KBC claims its worst phase is now over
Published 11/02/2011 | 05:00
KBC Ireland swung to a "disappointing" €177m loss last year but "expects" to return to the black in 2010, chief executive John Reynolds said yesterday.
The fresh figures came a month after KBC's parent company issued an unscheduled trading announcement revealing sharply worse impairments at its Irish operations.
Yesterday's data showed that KBC Ireland took a total impairment hit of €525m last year -- marking the worst write-downs in its history.
But Mr Reynolds said the bank "expects" to return to profit this year as impairments charges fall to a quarterly rate of "€40m to €50m".
"We don't like making losses, but there's a sense that 2010 will turn out to be our worst year," he said.
He added that this year "won't be plain sailing either, but we see stability in 2012.
"You'd have to be an absolute eejit if you couldn't make money out of this business [in the medium term]."
Despite 2010's losses, Mr Reynolds said that KBC did not need additional capital from its parent company, and that it did not expect to need more cash after March's stress tests.
Mr Reynolds also ruled KBC out as a potential buyer for Anglo Irish Bank and Irish Nationwide's deposit books, saying the bank "prefers" to grow organically.
KBC boosted deposits by 50pc to €6bn in 2010, and is embarking on a major marketing campaign to continue that growth and kick-start sluggish lending.