Tuesday 23 January 2018

Decision on whether KBC will exit the Irish market due on February 9

KBC ceo Johan Thijs
KBC ceo Johan Thijs
Donal O'Donovan

Donal O'Donovan

Belgian lender KBC Group will announce next month a final decision on whether to exit the Irish market, a spokeswoman said last night.

The call on whether to stick with KBC Ireland, and possibly ramp up the brand, or exit the now profitable business will be announced along with end-of year-financial results on February 9, the bank said.

The spokeswoman moved to play down speculation that a decision had already been taken to retain its unit here.

That was after analysts picked up on earlier comments made by KBC Group chief executive Johan Thijs, who suggested he planned to "tackle that (Irish) market".

The reference to Ireland came while Johan Thijs was speaking at an event in Bulgaria, where KBC was announcing an acquisition and expansion plan.

"And last, but not least, this is not a Central European market, but we have another asset where we have a market share, which is below our reference, and that is in Ireland," he said.

"And as you know, we have indicated already earlier that on Ireland we will position ourselves in the next coming months when we will publish the fourth-quarter results of 2016. We will then also make a statement of what we're going to do with Ireland and how we're going to tackle that market going forward."

Investec analyst Owen Callan saw it as a positive message for the Irish business.

"It's encouraging that they would talk about Ireland that way, it would suggest they are looking at expanding," he said.

There has always been a worry that KBC might not want to commit capital here, having suffered losses after the crash, Mr Callan said.

However, the bank has scope to expand here if it stays, and a decision to commit to the Irish market would also place KBC in a position to be a key element in any eventual consolidation with Ulster Bank and or Permanent Tsb, the Investec analyst added.

Options on the table for KBC managers in February include retaining the Irish unit and seeking to organically grow it as a stand-alone retail bank; building a captive bank-insurance group; looking at merging with another Irish business or potentially selling the Irish bank.

KBC had long flagged that a decision would be taken on what to do with its Irish bank in 2016 - but that has been put off until the final results for the year are prepared.

KBC Ireland returned to profit in 2015 for the first time since the Crash. Despite uncertainty about its long-term plans, the bank has been growing in Ireland in recent years.

It has opened a new network of so-called 'hubs' and positioned itself as a consumer lender and retail bank.

In November KBC Ireland reported a net profit of €44m for the third quarter of the year.

It also sought permission from the High Court to reduce its share capital in a move that will free up the lender to pay dividends to its Belgian parent for the first time since the Crash.

Irish Independent

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