Monday 26 February 2018

KBC boss says help-to-buy scheme boosted house prices

Group CEO Johan Thijs
Group CEO Johan Thijs

Gretchen Friemann

Belgian lender KBC has yet to assess potential acquisition targets in Ireland and no deal is on the table, the banking group's CEO, Johan Thijs, said yesterday.

Mr Thijs said his group's relatively high capital buffers enable it to assess "add-on acquisitions" but added that no deal is in the works.

"So, the straightforward question is, do we have anything on the table today? The answer is no."

He was speaking at an investor meeting held by the bank in Dublin yesterday, a first for KBC.

In a presentation to investors, analysts and the media KBC's management stressed the bank will maintain a "flexible 2pc buffer" above its targeted core tier one capital ratio of 14.6 pc, to enable the lender to peruse potential acquisition targets" throughout its European markets.

However, despite being seen as a likely consolidator in the banking market and possible buyer for insurance assets, Ireland has yet to throw up a deal. In February, KBC ended years of uncertainty and committed to remaining in Ireland, categorising it as a "core market" for the bank.

Its foothold in new mortgage lending, at close to 11pc of the market, trails big rivals AIB and Bank of Ireland, however.

KBC Ireland CEO Wim Verbraeken rejected the characterisation of KBC as a sub-scale lender and stressed his role is to "grow the bank organically" - adding that the preference is for a "sustainable business".

KBC Ireland has greater clout than stand-alone entities as it can draw on the larger balance sheet of its Brussel-based parent, he said.

Mr Verbraeken also took a swipe at the Government's handling of the supply crunch in the housing market.

The scheme which boosted the down payments available to first time buyers through a tax refund is set to be scrapped.

Help-to-Buy "reinforced demand" and translated very quickly into higher house prices, Wim Verbraeken said.

There is no "silver bullet" solution to the housing shortage but the focus should be on addressing the "supply side", he added.

KBC's Irish operations remain weighed down by €4bn in non-performing loans,

Mr Verbraeken confirmed the bank is considering bundling the bad debt into a portfolio sale but said the decision will depend on pricing of the loans and whether the bank has exhausted any "extraction of value".

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