KBC Bank Ireland PLC, Preliminary Results for year ended 31 December 2015

18/02/16

KBC Bank Ireland reports profit for the year at €75 million (after tax and impairment costs) (FY 2014 net loss of €91 million

  • KBC Group reports net profit of €2,639 million. Profit was boosted by the liquidation of KBC Financial Holding Inc., but tempered by impairment on goodwill. Excluding these two items, the result came to €2,218 million for full-year 2015
  • KBC Bank Ireland reports profit for the year at €75 million (after tax and impairment costs) (FY 2014 net loss of €91 million )
  • Operating profit of €119 million before tax and impairment costs
  • Capital Position at year end: Tier 1 Capital Ratio 13.3%
  • Over 74,000 new customer accounts in 2015; Digital channels accounting for 40% of daily banking salescurrent account is primary driver of new customer acquisition
  • Share of mortgages increased to 14%; enhanced new offering recently announced providing new home buyers with the lowest monthly mortgage repayments
  • Retail & Corporate Deposits grow to €5.1 billion
  • 26% reduction in number of mortgage arrears cases in 2015 (15% in 2014)
  • Physical presence expanded to 15 retail banking hubs nationwide; digital distribution channels enhanced with new responsive website and mobile app

KBC Group reported a net profit of €2,639 million for the full-year 2015 (2014: €1,762 million). KBC Group ended the last quarter of 2015 with an exceptional net profit of €862 million. Excluding liquidation of Financial Holding Inc. and impairments on goodwill the net profit amounted to €2,218 million for the full-year 2015 and €441 million for Q4 2015.

For full-year 2015 KBC Bank Ireland reports an operating profit of €119 million before tax and impairment costs. KBC Bank Ireland reported loan impairment costs of €48 million for 2015.

KBC Bank Ireland experienced strong growth in 2015, attracting over 74,000 new customer accounts during the year by continuing to provide competitive products, value-add offers and innovation for retail banking customers. Strong growth was particularly evident in the bank’s mortgage business, with market share increasing to 14%. Enhanced offerings for new and existing customers were introduced throughout the year, further strengthening the competitiveness of KBC’s mortgage offering. KBC’s latest mortgage proposition now offers new home buyers the lowest monthly mortgage repayments in the Irish market. The bank’s deposit acquisition also continued to grow, with deposits now at €5.1 billion (compared with €4.0 billion end 2014). 

KBC’s Current Account is now the primary driver of new customer acquisition. In 2015 KBC expanded its current account offering with the launch of its Extra Current Account package. Providing greater benefits and value to customers who choose KBC as their main bank, the Extra Current Account offers discounts on home insurancemortgagescredit cards and savings, as well as free day-to-day banking.

The bank invested significantly in its digital channels to enhance the online banking experience for customers. This included the launch of a new responsive website and mobile app, resulting in digital channels accounting for 40% of daily banking sales. Further digital innovation will see KBC’s mobile app facilitate customers who want to open a current account on the go.

KBC further expanded its physical network in 2015 with the opening of new retail banking hubs in key locations, including Wilton (Cork), Waterford, Naas, Kilkenny and Greystones and a flagship digital hub on College Green in Dublin.  KBC currently has 15 retail hubs, which continue to become part of local community life. The hubs are home to customer events throughout the year, and have provided funding and support to 70 innovative community projects to date through the bank’s Bright Ideas programme.

Customer rewards and value offers were a key feature of new product developments in 2015, including KBC’s credit card offer which was enhanced with a cash reward of up to 4% on grocery purchases and online shopping. KBC also launched a new Student Current Account, with students responding strongly to a choice of ‘cash or flight’ incentives.

Customer satisfaction and the quality of KBC’s financial offering and brand reputation were acknowledged externally at a number of awards during the year, including the Business Working Responsibly Mark (Business in the Community). In addition, KBC won ‘best corporate reputation’ in Irish retail banking for the fourth consecutive year (RepTrak), Excellence in Mortgage Lending (PIBA Service Excellence Awards), Best Deposit Bank 2015 (Sunday Times/IrishDeposits.ie) and Best Sales Training Programme 2015 (Irish Sales Champion Awards).

KBC maintained its progress in resolving arrears in its retail mortgage and corporate/SME loan book, offering a range of solutions for customers in difficulty, with a 26% reduction in the number of mortgage arrears cases in 2015. The bank will continue to work with customers in mortgage arrears in the year ahead.

Commenting on the financial results, Wim VerbraekenChief Executive of KBC Bank Ireland said: “We are very satisfied with our financial performance for 2015.We are pleased to see that we are making good progress to delivering on our strategy to become Ireland’s retail bank of the future. By continuing to invest in our digital channels, expand our physical network and develop competitive products, KBC attracted over 74,000 new customer accounts in 2015. This is a significant achievement just three years after becoming Ireland’s newest retail bank, demonstrating that KBC knows the market and understands customers’ banking needs right across current account and deposits, mortgages and loans, investments, credit card and insurance. We also remain fully committed to working closely with customers in financial difficulties to try and establish a suitable resolution.”

“Looking ahead, our focus is to grow our retail business and give customers the best banking experience in the market through our digital and physical channels. Our latest mortgage proposition is highly competitive, offering customers the lowest monthly mortgage repayments in the market today. We are confident that continued investment, innovation, competitive product developments and offers will further cement KBC’s attractiveness to consumers in the coming year.”

Outlining the latest mortgage product developments, Dara Deering, Executive Director and Head of Retail Banking, KBC Bank Ireland said: “Our research shows that consumers budget on a monthly basis and therefore value lower monthly mortgage repayments above everything else. KBC has responded by lowering our monthly mortgage repayments for first time buyers, movers and switchers.  New buyers who draw down a mortgage in conjunction with opening a KBC Current Account will now benefit from the lowest monthly repayments in the market today, irrespective of length of term or loan to value ratio. In addition, customers who choose to fix their mortgage rate at the start of their new mortgage will roll onto new business variable rates when their fixed term ends.” 

KBC Bank Ireland employs over 1,000 people in Ireland with retail banking hubs in Dublin, Cork, Galway, Limerick, Kildare, Waterford, Wicklow and Kilkenny.