Press & Media


KBC Bank Ireland PLC. Preliminary results for the year ended 31 December 2010

10 February 2011

KBC Bank Ireland PLC. Preliminary results for the year ended 31 December 2010

Key Points

KBC group:

Core earnings are and remain solid

  • Profit (after tax and impairment costs) amounted to €1.86 billion

Solid liquidity position and satisfactory capital buffers

  • Group Tier-1 ratio: 12.6% (Core Tier-1 ratio: 10.9%)
  • Including impact of all divestments already announced, €4.5 billion excess capital above 10% Tier-1 solvency target
  • Loan to deposit ratio KBC Group: 81%

KBC Bank Ireland plc:

  • Loss (after tax and impairment costs) amounted to €177 million.
  • Loan impairment costs rose to €525 million.
  • Overall loan portfolio reduced to €17.2 billion at year end from €18.0 billion in 2009 reflecting very limited demand.
  • Residential loans amounted to €13.1 billion at year end representing circa 9.6% of the Irish market.
  • Corporate/SME loans amounted to €2.3 billion at year end.
  • Real Estate lending comprised €1.9 billion i.e. 11% of overall loan book, of which Real Estate Development comprised €0.6 billion i.e. 3.5% of overall loan book.
  • Capital Position at year end: Tier 1 Capital Ratio 10.3% and a Capital Adequacy Ratio of 12.7%.
  • No need for externally sourced capital during period 2008 to 2010.

KBC Bank Ireland reports a disappointing loss of €177 million after tax and impairment costs for 2010. The deterioration in the Irish economy went deeper over the course of 2010 than we had anticipated.  While there were some signs of an improvement in externally focused sectors of the economy, domestic activity weakened further and numbers at work continued to fall albeit at a more modest pace than in 2009.

Lending demand of an investment nature was negligible.  Confidence in asset values was impacted by the dampening effect of the banking problems particularly the accelerated deleveraging pressure on Irish banks as a consequence of the EU/IMF assistance programme and additional capitalisation imperatives.

This environment presented difficulties for some of our customers although thankfully the significant majority of both our business and personal customers continue to meet their commitments to the Bank.

The composition of KBC Bank Ireland's loan portfolio, with relatively low exposure to the particularly troubled real estate development market, has allowed the bank to remain self sufficient in capital during 2010 as was the case in the previous two years of the economic downturn.

As a Belgian owned but domestically active participant in the Irish market, this relatively unique capital self sufficiency to date has enabled KBC Bank Ireland to look forward with confidence on its prospects within the Irish market place for the next few years.

Speaking about today’s results Mr. John Reynolds, Chief Executive of KBC Bank Ireland said;

"We have recently launched attractive product offerings in the retail deposit market and look forward to extending our presence in both the personal and commercial deposits market as well as increasing our residential mortgage and business lending over the year.  We will do so in a controlled and responsible manner seeking opportunities that fit within our risk appetite which has served us well over the course of our thirty plus years of banking in Ireland.

We anticipate 2011 being another tough year for it and its customers.  We are committed to working with those customers in difficulties.  We also wish to do more business with viable borrowers and to provide a first class service to all our customers.” 

We remain optimistic in the medium term about the economy's capacity to recover positive momentum.

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Issued on behalf of KBC Bank Ireland by MKC Communications. For reference:

Laurie Mannix
MKC Communications
Tel: 01 703 8620
Mobile: 086 814 3710

NOTE TO EDITORS

CORPORATE PROFILE
KBC Bank Ireland Plc

About

KBC Bank Ireland plc (“KBC Ireland”) is a wholly owned subsidiary of KBC group, an integrated bancassurance organization headquartered in Brussels, catering mainly for retail customers, small and medium-sized enterprises and private banking clientele. KBC holds leading positions in its key markets of Belgium and Central Europe as well as a selective presence in the rest of the world. KBC Bank Ireland has a strong presence in Ireland where it has been operating for over 30 years providing lending and treasury services. Employing c. 470 people, and headquartered in Dublin, KBC Bank Ireland has regional offices in Belfast, Cork, Galway and Limerick.  

KBC group Press Releases are available at www.kbc.com

ENDS

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