KBC 'here to stay' after posting €92m pre-tax profit for last year
KBC Bank Ireland turned in a pre-tax profit of €92m last year despite writing down €176m of its loan book, but the Belgian-owned bank saw the level of 'high-risk' loans more than double over the period.
John Reynolds, chief executive of the only major Ireland-based lender to remain profitable through the downturn, insisted that the bank remained committed to Ireland, despite signs of retrenchment by a raft of other foreign-owned banks from the market.
"We're satisfied with the results of 2009. We see ourselves as having been here for 35 years and having the full intention of being a significant participant in the market going forward," he said.
Non-performing loans -- where repayments are at least three months behind -- across the bank's entire €18bn loan book stood at 6.4pc in December. While the figure is up dramatically from 1.5pc a year earlier, it is relatively stable on the 6.3pc recorded for the third quarter.
But though levels of arrears plateaued in the second half of the year, KBC also became more proactive in restructuring loans for customers to keep them out of the non-performing category.
The bank has restructured 5.8pc of its loans, predominantly around offering mortgage holders interest-only periods.
Analysts suggest this may lie behind why KBC's level of 'high risk' loans -- which the bank describes as having a greater-than 6.4pc risk of defaulting -- continued to increase towards the end of 2009.
Stephen Lyons, an analyst with Davy, said: "According to our mortgage broker contacts, KBC is very much open for business in Ireland, unlike the other foreign banks, and has recently made some of its products more attractive."
Mr Reynolds said that the bank was keen to maintain its 9-10pc share of the residential mortgage market.
"There are figures being quoted that the mortgage market will rise by €8bn-€10bn this year. We'd be happy if we maintained our market share," he said, suggesting the bank has earmarked €800m to €1bn for home loans this year.
As with other banks, the most troublesome part of KBC Bank Ireland's total €18bn loan book is its property development portfolio. Some 35.3pc of this €600m book is now classified as non performing.
Meanwhile, Brussels-based parent, KBC Group made a pre-tax loss of e2.7bn for 2009.