KBC Ireland sees no further spike in troubled loans in longer lockdown

KBC Bank Ireland chief executive Peter Roebben said the lender had not seen a further increase in the number of troubled borrowers requesting forbearance following the Covid-19 lockdowns since the industry ceased to be ” offer global payment interruptions in September.

Some 98% of the 6,843 payment interruptions granted by KBC Bank Ireland to households and small businesses under the umbrella initiative have now expired, Mr Roebben told the Irish Times on Thursday, after the bank released figures for the whole year. The number of payment interruptions granted was 30% lower than the bank expected when the relief was first announced last spring, he said.

A fifth of borrowers who took payment holidays of up to six months had loans, mostly mortgages, that had previously been classified as non-performing, he said. Of the remaining 80 percent, one in ten needed greater abstention, including longer periods of payment holidays, reduced payments and more in-depth restructuring measures.

“These final total numbers are much less severe than we feared in the second quarter. This is actually a positive result and I think it is reflected throughout the market. We are not an outlier, ”Roebben said, noting that government supports helped borrowers during the crisis.

Economists have noted that many of the lowest paid workers in industries most affected by Covid-19 to date, including non-essential leisure and retail sectors, are less likely to have a loan. immovable.

The bank’s CEO said there had “certainly not been a particular push” in cases where the state entered a Level 5 lockdown for a period in late October and again in late December.

Taoiseach Micheál Martin told his party colleagues on Wednesday evening that the current lockdown could last until early May, with government sources suggesting that only key sectors such as education and construction will see restrictions easing. early next month.

Depreciation costs

KBC Bank Ireland has released € 4 million – € 2 million in each of the last two quarters of the year – of the € 95 million of depreciation provisioned in the first six months of 2020 to address to the Covid-19 crisis, as the headline economic figures have been better than expected since then.

The bank had the most pessimistic view of the Irish house price market at the height of the coronavirus shock last May, recording a 12% drop in its calculations as it began to set aside provisions for loan losses . In November, residential real estate prices were little changed over the year, according to data from the Central Statistics Office.

Ireland’s gross domestic product (GDP) likely grew 2.5% last year despite a series of national lockdowns as a strong multinational sector boosted the economy, the central bank forecast last month . KBC had taken into account a 5% drop in GDP at the start of last year.

Nonetheless, the extent of repeated restrictions and the lingering economic uncertainty caused by the pandemic have limited the extent to which KBC Bank Ireland can release provisions.

The net Covid charge of 91 million euros for the year caused the bank to suffer a loss of 48 million euros, compared to a profit of 32.3 million euros for 2019.

At the same time, the level of bad loans inherited from the bank decreased from 223 million euros to 1.43 billion euros to represent 14% of the total portfolio. The company is part of the Belgian KBC group.

KBC Bank Ireland benefited from a sharp increase in mortgage drawdowns at the end of last year, as its new home loans jumped 30% in the fourth quarter from the previous three months, to 386 million euros. As its total new mortgages fell to 1.05 billion euros for the year, from 1.12 billion euros in 2019, its business market share fell from 11.8% to 12 , 6%.


During the year, KBC Bank Ireland became a fully-fledged banking and insurance business with pension and life insurance product offerings from a local branch of the Belgian insurance unit of group. While Mr Roebben said activity in this space had “outclassed our ambitious” to date, he declined to give numbers.

When asked whether KBC Bank Ireland has any interest in parts of Ulster Bank, as the latter faces closure under the scenarios envisioned by its UK parent company NatWest Group, Mr Roebben said that he focused “on our customers and the growth of our business”.

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