DUBLIN: KBC Bank Ireland’s profits will be bolstered this year by the release of loan impairment charges of up to €160 million as the economy and property market here continue to recover. In a first-quarter trading update on Thursday, the Irish bank’s Belgian parent group guided that it expected loan impairment releases of between €120 million and €160 million for the full year. These were charges booked by the bank at the height of the financial crisis but can now be released due to improving property values as the economic recrovery gathers momentum.
KBC was boosted by a net impairment release of €50 million in Ireland in the first quarter, due mainly to the increase in the nine-month average housing price index and a further improvement in the non-performing portfolio. The Irish arm of KBC reported an after-tax profit of €67 million for the first quarter, up from €23 million a year earlier.
KBC’s stock of impaired loans (retail and corporate) fell by 16 per cent to €5.4 billion, down from €6.4 billion in the corresponding period last year. Its stock of mortgage arrears reduced by more than 20 per cent year-on-year to €1.7 billion. The bank added nearly 17,000 new Irish customer accounts in the first three months, with about 60 per cent of these opened through its revamped digital channel. It has launched Android Pay and Apple Pay contactless payments capability, with 15 per cent of its customers already using them actively. KBC did not give any specific details on mortgage lending for the first quarter but chief executive Wim Verbraeken said it had a “very strong pipeline building for 2017” that was now converting into drawdowns. “We have a 10 per cent market share on the book that has been quite stable over the years. What we’re seeing today in terms of completions is confirming that position.”
