Wednesday 20 February 2019

KBC boss refuses to rule out sale of family home bad loans

KBC CEO Wim Verbraeken
KBC CEO Wim Verbraeken

Gavin McLoughlin Business News Editor

KBC Bank Ireland plans to sell a portfolio of non-performing loans - including buy-to-let mortgages.

No family home mortgages are included, but CEO Wim Verbraeken said he could not "as a matter of principle" rule out such a sale in future, while adding that nothing was pending.

Speaking to the Irish Independent, Mr Verbraeken said sensitivities around the sale of family home loans had played a role in the decision to exclude them from this sale, which is expected to complete this year and includes loans with a par value of €1.9bn.

"We have reduced very substantially the number of cases in arrears and our non-performing exposures in an organic way, and we will continue to do that," Mr Verbraeken said.

"Once this transaction closes we will continue to work with the remaining non-performing loan exposure that we have, which will primarily be that PDH (private dwelling home) book that is in distress. We see potential there to further reduce that over time."

The Irish arm of the bank posted a net profit of €115.9m in the first half, compared to €173.1m in the same period last year. It said the decrease was mainly due to the fact that last year it released more provisions held against loans going bad.

It added more than 40,000 new customer accounts in the first half. The bank said digital products - such as an app letting customers set up a bank account on their phones - had fuelled this. New mortgage lending came in at €422m in the first half, an increase of more than 26.7pc on the first half of last year.

Last year, the bank announced it was looking at micro-SMEs as a particular area of interest. Dara Deering, KBC's director of retail banking, said the bank had identified the professional sector, and in particular entities like solicitors' firms and dental practices, as a potentially attractive sector.

Mr Verbraeken said the bank is looking at evolving its insurance offering by using expertise from the parent company in Belgium to provide products directly, and with a wider range, though he said this was "down the road". Currently it provides products through third parties.

Irish Independent

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