KBC Bank Ireland PLC. Preliminary results for the year ended 31 December 2011
09 February 2012
KBC Bank Ireland PLC. Preliminary results for the year ended 31 December 2011
KBC Group:
Core earnings power intact
• Net underlying profit amounted to €1,098 million
• Net reported profit of €13 million after divestments and impairment charges
Comfortable capital position and solid liquidity position
• Group Tier-1 ratio: 12.3% (Core Tier-1 ratio: 10.6%)
• Loan to deposit ratio KBC Bank: 94%
KBC Bank Ireland plc:
• Loss (after tax and impairment costs) amounted to €269 million
• Loan impairment costs of €510 million (€525 million 2010)
• Net operating profit (before loan impairments) of €241 million
• Low cost / operating income ratio of 23%
• Successful retail deposit campaign with over 5,000 customers added in 2011, total retail deposits approach €1 billion
• Further investment in retail product range and distribution channels
• Continuing commitment to support customers in difficulty
• Capital Position at year end: Tier 1 Capital Ratio 11.0%
KBC Bank Ireland reports a loss of €269 million after tax and impairment costs for 2011, which represented a further year of heightened credit costs for the Bank. The year was characterised by growing mortgage arrears in the residential loan book and the effects of a stagnant commercial property market on the Corporate Banking portfolio. At the same time, the Bank successfully expanded its retail banking presence in the market.
As a consequence of weak confidence and uncertainty regarding asset values, the demand for lending of an investment nature continued to be muted. KBC Bank Ireland devoted its resources therefore to, on the one hand, responding to the needs of its customers in mortgage arrears and those facing business difficulty, and on the other hand, servicing the banking needs of our many other customers.
The overall loan portfolio reduced to €16.7 billion at year end from €17.3 billion in 2010 reflecting limited new business demand and loan repayments and redemptions.
On 8th December 2011, Standard & Poor's reported in regard to KBC Bank Ireland:
"We view the bank's management and strategy as generally favourable relative to domestic peers. This, together with financial support from its parent, KBC Bank N.V. (KBC; A-/Stable/A-2), has helped business stability. In particular, we consider that KBCI's commercial property risk appetite was more restrained in the years prior to the severe dislocation in the Irish banking system that began in 2008 and that KBCI's business has been managed satisfactorily since."
Speaking about today’s results Mr. John Reynolds, Chief Executive of KBC Bank Ireland said:
“The past year was a difficult year for both our customers and the Bank. We are committed to support those customers facing financial difficulties. Notwithstanding our expectations for another tough year in 2012, we remain optimistic about the prospects of economic stability returning to Ireland by 2013 followed by tangible recovery signs offering both the Bank and its customers better prospects in the medium term.
KBC Bank Ireland continued to develop its retail banking activities and envisages expanding its market position in this regard over the coming years. We will also seek to provide new and competitive products for deposit customers.
Reflecting the expansion of our retail banking activities and continuing commitment to support our customers, KBC Bank Ireland employee numbers increased from 452 to 521 during the year.”
CORPORATE PROFILE
KBC Bank Ireland Plc
KBC Bank Ireland plc (“KBC Ireland”) is a wholly owned subsidiary of KBC Group NV, an integrated bancassurance organisation 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 Ireland has a strong presence in Ireland where it has been operating for over 30 years providing lending and treasury services. Employing c. 500 people, and headquartered in Dublin, KBC Ireland has regional offices in Belfast, Cork, Galway and Limerick.
KBC Group Press Releases are available at www.kbc.com
ENDS
