KBC Bank Ireland PLC preliminary results for the year ended 31 December 2009
11 February 2010
KBC Bank Ireland PLC preliminary results for the year ended 31 December 2009
Key Points
- Profit (after tax and impairment costs) amounted to €92 million.
- Credit impairment costs rise to €176 million (96bps).
- Overall loan portfolio amounted to €18 billion at year end, reflecting very limited demand.
- Home loans and residential investment loans amounted to €13.4 billion at year end
representing circa 9% of the Irish market. - Business loans amounted to €2.9 billion at year end. Real estate lending comprised €1.7 billion i.e. 9.4% 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: Core Tier 1 Ratio 9.3% and a Capital Adequacy Ratio of 10.3%, without the need for externally sourced capital during 2009.
Context
- 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 report acceptable profits for 2009. That said, KBC Bank Ireland incurred substantially increased impairment costs, reflecting the difficulties evident in the Irish economy.
- KBC Bank Ireland operates within KBC group’s integrated liquidity policy under which KBC Bank Ireland has access to the strong liquidity position and retail and corporate deposit capacity of the Group.
- The core business model of KBC Group remained largely untouched by the Strategic plan of KBC Group, approved by the EU Commission in November 2009. While the plan included the divestment of certain identified Group entities and a reduction in international and corporate lending, KBC Ireland was not earmarked for divestment or reduction in scale and continues its longstanding position within the KBC Group. Our aim in terms of business development is to provide our customers with a competitive alternative to whatever status quo emerges from the restructuring of the Irish banking market.
- The arrears statistics in both the home loans and business categories showed a marked increase in the first half of 2009 reflecting the sharp deterioration in the economic environment. The rate of increase moderated in the second half of the year, when some signs of stabilisation, particularly in Q4, became evident, although KBC Ireland remains cautious about the extent to which this represents a trend.
- KBC Bank Ireland is a committed subscriber to the Code of Conduct on Mortgage Arrears and the Code of Conduct on SME Lending which is reflected in our support of customers during 2009 when 5.8% of the lending portfolio has been restructured.
Press Release 11th February 2010
2010
- KBC Bank Ireland’s underlying profitability remains robust and our loan portfolios are carefully managed to withstand the ongoing effects of the poor economic climate.
- It is our policy to work constructively with borrowers to ensure we have offered them every possibility of meeting their obligations to us.
- We look forward to supporting home buyers with finance and viable businesses with investment funding in 2010, when we expect demand to return to the market.
Executive Commentary
Speaking about today’s results Mr. John Reynolds, Chief Executive of KBC Bank Ireland said;
“While we are satisfied with having achieved substantial profitability in 2009, we have found the credit and funding environment for our business very challenging”.
“Our key consideration in 2010 is to support customers during what we believe will be another tough year and to generate an acceptable return for our shareholders. Our aim is to remain a long term, relevant lender to Irish personal and business customers. We intend to achieve this through the continuing application of our sustainable business model, responsible lending criteria, stable funding, fair and competitive pricing and sensitive customer management. We believe that our experience of over thirty years in the Irish market will assist us in achieving our objectives.”
“In summary, our underlying profitability remains solid and we are looking forward positively towards our business over 2010. We expect the economy to show signs of moderate recovery towards the end of this year with the reasonable prospect of better times in 2011”.
ENDS.
Issued on behalf of KBC Bank Ireland by MKC Communications. For reference:
Laurie Mannix
MKC Communications
Tel: 01 703 8620
Mobile: 086 814 3710
Charles Hogan
MKC Communications
Tel: 01 703 8609
Mobile: 086 043 6328
Anne Marie Collins
KBC Bank Ireland
Tel: 01 664 6244
Mobile: 087 6571526
NOTE TO EDITORS
CORPORATE PROFILE
KBC Bank Ireland Plc
About
KBC Bank Ireland plc (“KBC Ireland”) is a wholly owned subsidiary of KBC Group NV, 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 Ireland has a strong presence in Ireland where it has been operating for over 30 years providing lending and treasury services. Employing c. 450 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.
