Thursday 16 August 2018

KBC Bank Ireland sells loan portfolio of €1.9bn as net profit falls by a third

CEO Wim Verbraeken, of KBC Bank in Ireland
CEO Wim Verbraeken, of KBC Bank in Ireland
Ellie Donnelly

Ellie Donnelly

KBC Bank Ireland has sold a loan portfolio of approximately €1.9bn to Goldman Sachs.

Today's announcement from the group comes as the bank saw its profit after tax in Ireland fall by one third in the six months to 30 June.

The loan portfolio consists of non-performing (NPL) Irish buy-to-let mortgages, performing and non-performing UK buy-to-let mortgages, and non-performing corporate loans.

As a result of the transaction, NPL levels at KBC Bank Ireland will fall by around 40pc, resulting in the NPL ratio reducing by roughly 11pc points to around 25pc.

The loans are being sold to entities established and financed by Goldman Sachs including Beltany Property Finance, Tramore Funding and Banna Funding.

"KBC Bank Ireland has been building down organically its legacy portfolio of non-performing loans in Ireland over the past few years," Johan Thijs, KBC Group CEO, said.

"However, over the last months, there has been a growing interest from the international financial markets for non-performing loan exposures. This is a clear market trend. KBC wishes to accelerate the reduction of non-performing loans by acting upon the increased interest presented in the market."

"The sale of sub-portfolios fully fits within the bank’s strategy and ambition."

Meanwhile the bank reported a net profit after tax of €113m in Ireland in the first half of the year, according to interim results from the group. This was a fall of almost one third on the profit after tax of €166m reported in the same period last year.

During the six month period the bank’s net interest income in Ireland was €148m, up on the net interest income of €135m reported in the first six months of 2017.

Overall, and KBC Group reported profit after tax of €1.2bn for the six month period, down on the €1.5bn in profit after tax reported in the same period in 2017.

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