Belgian-owned KBC Bank Ireland said it will plough ahead with the planned roll-out of insurance and pension products here from this week, despite the current economic dislocation.
KBC plans to replicate the parent bank's 'bancassurance' model here. It has launched an insurance business here, as a branch of KBC Insurance NV in Belgium, which will be rolled out on a phased basis beginning with a digital pension product, followed by life insurance.
The bank saw an "extremely strong" start to the year in Ireland, KBC's Irish head Peter Roebben said. He sees its digital products offering a competitive advantage in winning new customers here.
The Covid-19 outbreak will hurt momentum here but will not lead to a change in strategy, including on the move into insurance, he said.
The bank does expect heightened volatility in the Irish market, including house price drops of potentially 20pc this year. The bank's base case for Irish house prices is a 12pc fall in 2020 followed by a rise of 8pc next year.
KBC has received more than 7,000 payment break requests and had shifted operationally to support customers coping with the Covid-19 crisis. Not all payment breaks offered are being taken up, Mr Roebben noted.
For those who have opted to take a payment break, an initial three-month pause will be easily extended, he said.
As that second break goes on, the bank will be contacting all customers, targeting their return to repayments, he said.
The bank did not provide an estimate for its expectations of increased bad debts this year, and Mr Roebben said the impact of the crisis will be determined by factors including the scale of Government stimulus.
Coming into the current economic shock, KBC Ireland contributed €12m in profit to the overall KBC Group in the first three months of this year.
The bank reported 9,400 new current accounts opened here in the period, the strongest first quarter since the retail bank launched in Ireland.
KBC Ireland's total number of customers increased by 2pc quarter on quarter to 309,000.
New mortgage lending was €192m with switcher mortgage applications up 20pc year on year.
Meanwhile, majority State-owned bank Permanent TSB expects to take a hit of €50m in impairment charges on its loan book for the first half of this year as a result of the Covid-19 pandemic.
The bank said yesterday it had not experienced a pick-up in loan losses related to Covid-19 in the first three months of the year, reporting that asset quality "remained stable with no material movement in the staging of assets".
However, the bank warned that new lending this year could fall by around 40pc to 50pc of 2019 volumes.
Outgoing CEO Jeremy Masding said the long-term consequences of the Covid-19 crisis will be largely dependent on the pace of business and jobs recovery.