KBC Bank Ireland reports net profit of €44.4 million for Q3 2016 (after tax and impairment)

17/11/16

KBC Bank Ireland PLC, Financial Results for Q3 2016 (to 30th September)

  • KBC Bank Ireland reports net profit of €44.4 million for Q3 2016 (after tax and impairment)
    • Operating profit of €17.1 million before tax and impairment, down from €33.9 million in Q3 2015
    • Capital Position at end of Q3 2016: CET 1 Capital Ratio 13.6%
    • Stock of impaired loans reduced by 13% to €6.0 billion from €6.9 billion since Q3 2015
  • 16,900 new customer accounts in Q3 2016, bringing to 49,900 the total added in the first nine months of the year
  • New competitive mortgage offers with compelling fixed & variable rates for new & existing customers  
  • Digital growth continues with one third of new current accounts opened through digital channels, in addition mobile and online usage has increased by 109% on the same quarter last year   
  • First retail bank to offer virtual reality property viewings through myhome.ie; ongoing innovation to provide greater customer experience
  • Strong momentum continues in reducing number of mortgage arrears cases
  • KBC Group reports net profit of €629 million for Q3 2016 

KBC Bank Ireland reported a net profit of €44.4 million after tax and impairments for Q3 2016, compared to a profit of €24.6 million for the same period in 2015. In the 12 months to 30th September 2016 the Bank reduced its impaired loans from €6.9 billion to €6.0 billion, a 13% reduction on its position a year earlier. KBC Group ended the third quarter of 2016 with a net profit of €629 million, compared with €600 million for the same period last year.

KBC Bank Ireland added 49,900 new customer accounts in the first nine months of the year. Driving this continued growth is KBC’s competitive current account and mortgage offering.  

In the latest move to ensure a compelling mortgage offering, KBC Bank Ireland has lowered its fixed and variable mortgage rates for both new to bank and current KBC mortgage customers. The changes are part of the Bank’s ongoing commitment to help ensure customers have the lowest monthly repayments possible. These rates make KBC mortgages the most competitive in the market today.

The Bank also reported ongoing growth in its Deposit (Retail and Corporate) base, which now stands at €5.3bn (compared with €5.0bn at end Q3 2015). The response to KBC’s investment product range, Privileged Portfolio Pro, has been so strong that a further tranche of the floor protection funds has just been released. The floor protection funds now account for just over 40% of KBC’s overall investment fund sales. In the current interest rate environment, the funds’ appeal lies in their unique floor monitoring model, which provides added protection by keeping the value of investments above a pre-determined floor price at all times.

Bolstering KBC’s expanding suite of investment products is ‘Start2Invest’, a new product launched earlier this month whereby customers can choose to invest at monthly intervals as opposed to  a lump sum basis. This gives customers flexibility to invest at more regular or opportune moments, using smaller amounts spread over a longer period of time.

During the quarter, KBC has led the market with its offer of €100 to students who open a KBC Student Current Account, activate their online banking and make at least 10 debit card transactions before year end. The Current Account is at the centre of the bank’s competitive offering for customers, providing discounts and incentives on a range of products including savingsmortgages and personal loans.

Earlier in the year, KBC became the first retail bank in Ireland with digital mobile and desktop current account openings. As a result, one in every three current account openings this quarter occurred via a digital channel, with customers embracing new ways to bank online. At a general level, customer usage of online banking has increased significantly with the number of KBC customers logging on and using online/mobile banking increasing by 109% on the same quarter last year.

In the latest expansion of its digital capabilities, KBC became the first retail bank in Ireland to introduce virtual reality property viewings. In a new digital partnership with myhome.ie, KBC’s pilot scheme gives house hunters the opportunity to take 360-degree virtual tours of properties for sale on desktop and smartphones. The initiative highlights KBC’s ongoing investment and innovation in both the digital and mortgage markets as KBC presses ahead with its multi-year investment plan of over €100 million in digital channels, banking systems and the Bank’s physical presence in Ireland.

KBC’s retail network of 15 hubs complements the Bank’s digital network and provides a focal point for customer initiatives and events, most notably Bright Ideas in the third quarter. The community funding programme attracted a record number of entries from over 400 individuals and community groups. The 2016 winner, as voted by the public, was Waterford Marine Search & Rescue. To date, Bright Ideas has helped over 120 unique projects thrive in local communities across Ireland and has provided a quarter of a million euro in funding.

KBC has maintained progress in resolving arrears cases in its retail mortgage and corporate/SME loan book in the third quarter of 2016, and to date has offered a range of solutions to circa 95% of customers in difficulty. 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: “I am pleased to report strong profitability across all areas of the business with the continued support and investment of our shareholder.”

“We remain firmly focused on developing products and services that are truly innovative, offer value for money and stand out in today’s market. The enduring popularity of our combined current account and mortgage offering and recent mortgage rate reductions best exemplify that commitment to our customers. Looking ahead, we remain firmly focused on meeting customers’ needs for innovative, competitively priced banking products and growing market share across our business.”  

“It is encouraging to note our significant progress in offering resolutions to some 95% of our distressed customers. We continue to work closely with any customers in financial difficulties to try and reach suitable, sustainable resolutions.”
KBC Bank Ireland employs over 1,000 people in Ireland with retail banking hubs in Dublin, Cork, Galway, Limerick, Kildare, Waterford, Wicklow and Kilkenny.