KBC Group revealed yesterday that 2.5pc of its €13.6bn Irish homeloans were at least three months in arrears -- more than double the average rate of the Belgian financial giant's total mortgage book.
The average loan-to-value at KBC Homeloans (formerly IIB Homeloans) stood at 76pc at the end of September, a third higher the group average.
Some 95pc of the bank's mortgages are carried out through the broker channel, and industry sources suggest about a fifth of the book is made up of the previously-booming buy-to-let market.
Details of the performance of the Irish mortgage book were contained in slides prepared for analysts yesterday as Brussels-based KBC Group unveiled the first loss since it was created in a 1988 merger.
The average LTV in its €28bn Belgian mortgage book stands at 50pc, while 'non-performing loans' -- where payments are at least 90 days behind -- are at only 0.5pc.
Market observers expect to get a clearer picture of the quality of the Irish mortgage market, which has held up well despite the deteriorating economy, when Irish Life & Permanent issues a trading update next week.
The country's biggest mortgage provider said in August that there had been "no significant change" in arrears in its Irish book in the first half.
Non-performing loans made up 0.9pc of the Irish portfolio at the end of last December.
KBC Group, in which the Belgian government recently injected €3.5bn to shore up its finances, posted a third-quarter net loss of €906m, compared with a profit of €630m for the same period last year.
The quarterly loss was caused by €1.4bn in impairments on a net basis from losses in structured credit holdings, which were affected by the global financial crisis.
The group, which also has an asset management business in Dublin, has booked a €50m writedown on a 2pc stake held in Irish Life & Permanent so far this year. Some €48m of the IL&P hit was taken in the three months to the end of June, with the remainder booked in the subsequent quarter.
The Irish group's shares tumbled 61pc over the course of the six months, in line with a sell-off across the wider financial sector.
Shares in KBC are down by a half since mid-September, when the global financial crisis deepened and triggered the nationalisation or capitalisation of financial companies by governments, but are up 30pc from the 12-year lows recorded just before it took the government capital injection.
Chief executive Andre Bergen said that KBC's investments in central and eastern Europe helped to support the business, and that it would continue to focus on the area, as well as strengthening its home Belgian market. (Additional reporting, Reuters)