Monday 10 December 2018

KBC completes problem loan sale to Goldman Sachs

Digital boost: KBC CEO Wim Verbraeken announced a plan to allow customers to manage accounts at other banks through a KBC app
Digital boost: KBC CEO Wim Verbraeken announced a plan to allow customers to manage accounts at other banks through a KBC app
John Mulligan

John Mulligan

KBC has completed the sale of a portfolio of mostly non-performing buy-to-let and corporate loans that were held by its Irish unit, to Goldman Sachs.

The loans had a face value of €1.9bn. The sale, first announced in August, will have a positive impact on KBC's profit and loss account, as well as its CET1 capital ratio. It will also reduce its non-performing loan ratio, according to the bank, which confirmed the completion of the sale yesterday.

The final details of the impact will be revealed by KBC when it releases full-year results next February.

Apart from loans to Irish customers, the loan portfolio also consists of some UK buy-to-let mortgages.

KBC previously said that as a result of the transaction, non-performing loan (NPL) levels at KBC Bank Ireland would fall by about 40pc, resulting in the NPL ratio reducing by roughly 11 percentage points to about 25pc.

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

When it announced the planned sale last August, KBC said there had been a "growing interest" from the international financial markets for non-performing loan exposures.

"The sale of the sub-portfolios fully fits within the bank's strategy and ambition," said KBC group CEO Johan Thijs as the time.

KBC made a net profit after tax of €113m in Ireland in the first half of the year. That was almost 33pc lower than the figure reported in the first half of 2017.

Last month CEO Wim Verbraeken said the bank will launch a new service that will allow users to manage accounts at other banks via the KBC app. European legislation means other banks have to co-operate, under rules designed to open up the provision of payment services. The bank hopes the app will encourage people to open accounts with it, Mr Verbraeken said.

Irish Independent

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