Business Irish

Sunday 11 December 2016

KBC has no provisions aside for Central Bank tracker probe

Published 14/08/2016 | 02:30

KBC's Irish arm more than doubled its net profit after tax and impairments year-on-year in the second quarter - to €39.5m from €17.8m Photo: AFP
KBC's Irish arm more than doubled its net profit after tax and impairments year-on-year in the second quarter - to €39.5m from €17.8m Photo: AFP

KBC Bank Ireland has not set aside provisions to deal with potential costs arising out of the Central Bank's tracker mortgage probe.

  • Go To

It did not comment on the strategic rationale for the decision - which may indicate confidence that it will not suffer a significant hit - but said that it was cooperating fully with the Central Bank's requirements.

One of the issues being examined is whether customers of Irish banks were wrongly denied trackers. Deloitte has been appointed as an independent third party to make sure KBC's internal review complies with Central Bank requirements. The Central Bank said last month that it would shortly commence on-site investigations.

"We are meeting the timelines that the Central Bank has set out for this review, which is a phased review. I wouldn't want to pre-empt any of the findings or the conclusions before the entire process has been concluded, just to say that we're fully cooperating with the Central Bank and their agents in completing this process as speedily as possible. We will make sure that customers are treated fairly," KBC Bank Ireland chief executive Wim Verbraeken said.

KBC's Irish arm more than doubled its net profit after tax and impairments year-on-year in the second quarter - to €39.5m from €17.8m. The results will feed in to the parent group's ongoing review of whether the bank should retain a presence here. Verbraeken said details on the outcome of the process would probably be made known by the end of the year.

The premise of the review is to examine whether KBC could build out a sustainably profitable bank in Ireland. It added 33,000 customer accounts in the first half, driven in part by a new digital offering that enables customers to set up a bank account online.

Verbraeken said the bank had not seen any direct impact from the UK's vote to exit the European Union.

"I think we would agree that overall it is not good news for the Irish economy. It remains to be seen to what extent it will impact customers, and we take a proactive approach in reaching out to customers that will potentially be impacted," he said, adding that the bank had seen a continued economic recovery in the sectors in which it operates.

"On the mortgage side, we have noticed that the macro-prudential lending rules that have been put in implementation by the Central Bank last year have kind of been digested and we're moving into the next phase. Lenders and borrowers have adjusted, we work within these rules and we expect essentially that the positive momentum is carried into the second half of the year," he added.

Sunday Indo Business

Read More

Promoted articles

Editors Choice

Also in Business