KBC back in profit but warns on repossessions
Published 07/08/2015 | 02:30
Home repossessions are likely to remain at current levels over the coming two years, the head of KBC said yesterday.
Borrowers, policy makers, banks and the public "should be braced for a continuation of the current levels for a while," KBC Ireland chief executive Wim Verbraeken said.
However, repossession rates are not a sign things are getting worse in terms of mortgage arrears, he insisted.
Cases now before the courts are a legacy of the crash, he said
Figures from Courts Service show that there were nearly 1,000 home repossession orders granted in the first six months of 2015.
In the case of his own bank, KBC is only pursuing court actions as a "last resort" and in cases where debtors have not engaged with their lender, Mr Verbraeken said.
He was speaking after KBC reported its first half-year profit since the crash, along with a 14pc reduction in the number of mortgage arrears cases.
KBC Ireland reported a profit of €18m after tax and impairment costs for the second quarter of the year compared to a loss of €34m for the same period in 2014.
The bank says that it is on course to return to full year profitability by 2016, when its Belgian parent is due to decide on the overall future of the Irish business.
KBC says that its mortgage business grew, despite lending restrictions introduced by the Central Bank this year, and accounts for around 15pc of current market share.
The bank expanded its retail "hub" network to 15 after opening five new retail banking hubs across the country.
The latest results have been boosted by better than expected recoveries on boom-era business and property lending.
KBC Ireland no longer lends to businesses but is working through a remaining €2.5bn of business and property loans, down from €6bn. Deposits at the bank are now over €3.8bn and KBC added 31,500 customer accounts during the first half of the year.
The company said that its insurance and investment products performed well throughout the year, although it did not provide further details.
KBC Bank Ireland employs over 1,000 people in Ireland with retail banking hubs in, among others, Dublin, Cork and Galway and a national headquarters in Dublin.