KBC Bank Ireland PLC, Financial Results for Q3 2019 (to 30th September)


“At KBC, we continue on our journey to further develop and build a bank that offers innovative and competitive banking services and solutions in Ireland. As today’s results show, our strong 2019 performance continues, with consistent growth in new mortgage lending and current accounts.

This quarter, we added 22,000 more customer accounts and reached a milestone for our business by surpassing 300,000 customers who now bank with us. This growth shows that people are actively seeking out KBC as their alternative banking choice and I would like to take this opportunity to thank our new and existing customers.”
Peter Roebben, Chief Executive, KBC Bank Ireland

Key Financial Highlights

  • New mortgage lending of €800 million, a YOY increase of 21% compared to 2018 and outperforming market growth of 11%
  • Mortgage applications also outperforming the market with applications up 14%
  • KBC’s YTD 2019 mortgage market share is 11.7%, up from 10.9% in 2018
  • Current Account growth up 14% year on year with more than 30,000 new current accounts opened in 2019 as more and more people choose KBC’s competitive Extra Current Account
  • 22,000 new customer accounts in the third quarter of 2019, bringing total number of new customer accounts added in 2019 to over 60,000
  • Total number of customers has increased 8% year on year now standing at 301,000
  • Digital activity on the KBC mobile app rose by 49% year-on-year
  • Net profit of €4.4 million for Q3 2019 and €29.3m YTD 2019 after tax and impairment
  • Impaired loans stock reduced by 8% in Q3 2019 to €1.7 billion
  • Capital Position at end of Q3: CET 1 Capital Ratio 15.87% fully loaded
  • KBC Group ended Q3 2019 with a net profit of €612 million

Key Business Initiatives over Q3

  • KBC announced its €50 million Strategic Banking Corporation of Ireland (SBCI) Future Growth Loan Scheme Fund in August; to date KBC has received €9m in applications from professional micro businesses and SMEs, accounting for more than 18% of the total KBC fund
  • KBC’s Socially Responsible Investment (SRI) funds now account for 11% of all investment sales, offering more investment opportunities to socially conscious consumers  

Financial Highlights
KBC Bank Ireland has reported a net profit of €4.4 million after tax and impairments for Q3 2019 compared to a net profit of €33.6 million for Q3 2018 (after tax and impairment).

Net profit in Q3 2019 was impacted by an additional €18 million relating to the industry wide tracker mortgage examination and investigation, of which €14 million is a provision for a potential sanction.

KBC Group ended the third quarter of 2019 with a net profit of €612 million, compared with €701 million in the third quarter of 2018.
Competitive Mortgage Offering
First time buyers, switchers and movers continue to benefit from even more choice and better long-term value following the reduction to KBC’s 2 and 10-year fixed rates by between 0.20% and 0.55% in August. KBC offers customers market leading fixed 1 and 10-year rates, while offering some of the most competitive 2, 3 and 5-year fixed rate options.
KBC recently announced the extension of its switcher offer with support for customers moving their mortgage to KBC, with €3,000 available to help with the costs associated with switching before 30th June 2020.
Digital and Product Innovation
Last quarter, KBC introduced free day-to-day banking for KBC Extra Current Account holders who make a monthly lodgement of €2,000, with no requirement to maintain a minimum balance. Irish people are responding to KBC’s competitive current account offering, including students, with 30,000 new current accounts opened 2019, an increase of 14%  when compared to 2018. 

In September, the second Payment Services Directive (PSD2) came into effect, introducing compulsory Second Customer Authentification (SCA) measures for accessing all online payments. As a digital-first bank, KBC has always applied rigorous, market-leading secure authentication across its digital banking services, and KBC’s existing authentication process is fully compliant with the new European regulatory requirement. Digital activity on the KBC mobile app rose by 49% year-on-year.

Sustainability, at the Core of our Business Model
KBC launched its Socially Responsible Investment funds to the Irish market in May, offering more investment opportunities to socially conscious consumers, with take up strong and now accounting for 11 percent of all investment sales.  A pioneer in this space, KBC Group has been offering a wide range of sustainable funds for over 20 years. Internationally, KBC now has 110 different SRI funds, totalling €10 billion assets under management.

KBC has also partnered with the SBCI as part of the Government of Ireland’s ‘Future Growth Loan Scheme’. The scheme, which will see the roll out of an overall fund of €300 million delivered by the SBCI and supported by the European Investment Fund, is available to businesses that meet SBCI eligibility. The SBCI has allocated €50 million of the fund to KBC and over the past ten weeks, KBC has received €9m in applications from a broad range of professional micro businesses and SMEs.

KBC continued to support Health and Wellbeing initiatives in the third quarter of the year, positively impacting on the lives of employees, customers and communities. KBC’s sponsorship of the KBC Dublin Marathon continued at pace in the last quarter. The KBC Dublin Marathon Race Series attracted over 15,000 runners in the build up to the main marathon event. On the 27th October the KBC Dublin Marathon saw almost 20,000 people take to the streets in what has become known as the worlds ‘friendliest’ marathon.