KBC Ireland saw record lending to house buyers in the last three months of 2020 and ended the year with reduced non-performing loans despite the hit from the pandemic.
The Belgian lender’s Irish arm was the first of the Irish banks to report results for 2020 and will therefore be closely watched for a read on the wider market.
KBC Bank Ireland CEO Peter Roebben said the 2020 results had proved “far less stark than feared” in the first half of last year when the bank took a €95m impairment on its books in anticipation of pandemic-related losses.
That impairment now looks conservative, Mr Roebben said.
House prices had held up and the number of customers who got payment breaks last year was less than expected – around 6,800 versus 10,000.
Of the 80pc of those that got a payment break and were not previously classes as non performing loans, nine out of 10 had returned to full repayments, he said.
KBC has the highest share of bad loans of any bank, at 14pc of lending, but that reduced last year by €223m through customer engagement even with the stress on households caused by Covid, he said. No sales of bad loans are planned, but the bank has not ruled it out.
However, the full impact of the pandemic on customers will not be known until the economy reopens, Government supports are withdrawn and the true scale of business closures and income loss is seen, he said.
After a weak first half of last year, new mortgage lending grew in the final months and hit a record €386m in the fourth quarter of the year. In a shrinking market last year, that meant KBC’s market share increased from 11.8pc to 12.6pc.
Mr Roebben said it was impossible to say whether doubts over the future of Ulster Bank had boosted his own bank, but credited pricing and KBC’s digitally focused customer service.
The bank would look at opportunities to buy performing loans if Ulster Bank’s parent NatWest decides to leave the Irish market, but it is not a focus, he said.
KBC Ireland reported a net loss of €48m for last year on the back of its impairment charge. It saw 34,000 new current accounts opened at the bank, a year-on-year growth of 16pc.