Friday 23 February 2018

Too soon to judge Government's new stimulus plan – KBC boss

KBC Ireland announced losses after tax of €17.1m for the first three months of the year
KBC Ireland announced losses after tax of €17.1m for the first three months of the year
Donal O'Donovan

Donal O'Donovan

The head of KBC Bank Ireland said it's too early to tell whether the Government's controversial mortgage insurance scheme will help revive the housing market.

But KBC Bank Ireland chief executive Wim Verbraeken said the "major issue" in relation to the housing market is "supply" rather than access to credit.

The bank has stepped up new mortgage lending over the past year from a very low level in the years following the crash.

However, Mr Verbraeken, who took over as head of the bank last year, said that mortgage lending across all lenders nationally may fall short of a €3.5bn forecast this year.

Yesterday, KBC Ireland announced losses after tax of €17.1m for the first three months of the year. Net profits were close to €400m for the period, the bank said, after loan impairment costs reduced from €99m in the same period last year to €47m by the end of March 2014.

Mortgage arrears stood at 20.8pc for owner-occupied homes and 36.4pc for buy-to-lets at the end of March, up slightly on the previous period. The high numbers reflect age maturity profile of the loans, the bank said. The Belgian-owned lender was heavily involved in business lending before the crash but is reinventing itself as a consumer bank.

It is on course to raise its total number of branches or "hubs" to 10 nationally by the end of the year, but has no plans to roll out a full national network to rival those of the other main banks, but is seeking to grow through its mobile and online operations. Retail deposits stood at €3.1bn at the end of March, up by a half since 2012.

Irish deposits now add up to half the size of the bank's overall lending here, with much of the rest coming from its Belgian parent.

Wim Verbraeken told the Irish Independent that the bank has no current plans to sell off portfolios of impaired or non core loans, making it one of the few lenders not to bundle up boom-era loans for sale.

"We haven't had to consider a compelling offer," Mr Verbraeken said.

He declined to discuss speculation around the future of Ulster Bank, which has included talk of a potential tie-up with KBC, but said the bank would watch the evolving banking landscape.

Irish Independent

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