KBC looks to quit Irish market with planned loan sales to Bank of Ireland

KBC Bank is looking to leave the Republic of Ireland, with plans to sell its performing loans to Bank of Ireland.

KBC Group has revealed its intention to leave the Republic of Ireland, with plans to sell its performing loans and deposits to Bank of Ireland.

The Belgian group’s departure will reduce the number of retail banks in the country to three.

KBC Bank Ireland said it is “reviewing options to divest” its non-performing loans.

This could mean the non-performing loans will be sold to an overseas distressed debt fund.

KBC Group CEO, Johan Thijs, said: “Over the last decade, KBC Bank Ireland has managed to build a digital first retail bank and launched recently a digital pension insurance business for the Irish market.

“Given the challenging operational context for European banks and after careful consideration, we have reached an agreement with Bank of Ireland Group regarding the potential sale to Bank of Ireland Group of substantially all of the performing loan assets and liabilities of KBC Bank Ireland.

“Next to this MOU, KBC Bank Ireland’s remaining non-performing mortgage loan portfolio is currently being reviewed for potential divestment.”

The news comes eight weeks after UK lender NatWest decided to wind down Ulster Bank.

Irish customers

Francesca McDonagh, Group CEO of Bank of Ireland, said: “When we look at opportunities we consider if they are a good fit for the customers involved and for the bank. This MOU complements our strategy to grow our business in Ireland, and supports the investments we are making in the transformation of our systems and digital banking services. We would be very pleased to provide KBC Ireland customers with a good home, and look forward to progressing our discussions with KBC over the coming period.”

Minister for Finance Paschal Donohoe has said the decision taken by the bank to leave the Irish market is regrettable, particularly as it comes so soon after NatWest’s decision to withdraw Ulster Bank Ireland from the Irish banking sector.

KBC first entered the Irish market in 1978 through the majority acquisition of Irish Intercontinental Bank.

KBC Bank first entered the Irish market in 1978.

The Minister noted the announcement states that a Memorandum of Understanding has been agreed between KBC and Bank of Ireland, which covers substantially all of KBC’s performing loan assets and liabilities and that KBC is reviewing its options to divest its remaining non-performing mortgage loan book.

Speaking following the announcement, Minister Donohoe said: ‘The decision announced by KBC is a very significant event for the Irish banking sector, its staff and customers. Our thoughts immediately turn to KBC’s staff and the impact of this decision for them.

“The news that discussions have commenced with Bank of Ireland regarding substantially all of the performing loan assets and liabilities is welcome. It is my hope that these negotiations are concluded quickly and prioritise the continuation of financial services for these customers and the preservation of jobs.

“Neither the Government nor I have any role in decisions such as these which are a matter for the relevant banks and their independent boards.

“Robust consumer protections are in place in the event of a bank withdrawing from the Irish market, including the Central Bank’s Codes of Conduct and that the terms of any contract currently in place with KBC remains in place into the future.”


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