KBC Bank Ireland PLC, Financial Results for Q3 2015 (to 30th September 2015)

11/16/15

Commenting on the financial results, Wim Verbraeken, Chief Executive of KBC Bank Ireland said: “The financial results and impairments are in line with our expectations and we remain on track to return to full year profitability by 2016"

  • KBC Bank Ireland reports profit (after tax and impairment costs) of €25 million for Q3 2015 (compared to a loss of €14 million in Q3 2014)
  • Remains on track to return to full year profitability by 2016
  • 59,000 new customer accounts added in first nine months of 2015; current account is the primary driver of new customer acquisition
  • Digital channels building momentum with new Website and Mobile App now accounting for 40% of daily banking sales
  • Share of new mortgage lending remains at 14%, Standard Variable Rate reduced for all customers irrespective of LTV or repayment status
  • 20% reduction in the number of mortgage arrears cases in first nine months of 2015 following a reduction of 15% in 2014
  • KBC Group ends Q3 2015 with a net profit of €600 million

KBC Bank Ireland reports a profit of €25 million after tax and impairment costs for Q3 2015, compared to a loss of €14 million for the same period in 2014. The bank had loan impairment costs of €9 million for Q3 2015, compared to €47 million for the same period in 2014.

KBC Group ended the third quarter of 2015 with a net profit of €600 million, compared with €666 million in the previous quarter and net profit of €608 million in the third quarter of 2014.

KBC Bank Ireland continued its retail banking expansion and investment with the development of new and innovative products. The bank recently introduced a new Extra Current Account package, which delivers greater value to KBC customers, featuring a host of benefits with discounts on home insurancemortgagescredit cards and savings as well as free day to day banking. In addition, KBC launched a new Student Current Account, introduced advanced new MasterPass technology for all card holders and extended its 4% cash reward on credit cards.

Following the launch of a new responsive website and mobile app, digital channels are now a strong source of new customer applications. 40% of daily banking sales are now coming through digital channels.
KBC also extended its popular €2,000 mortgage switcher offer to movers and first time buyers who draw-down by the end of this year. KBC’s mortgage business continued to grow strongly, achieving 14.2% market share year to date, driven by the bank’s competitive offering and the ongoing market recovery.

In addition, KBC reduced its standard variable rate for all PDH standard variable rate mortgage customers irrespective of loan to value or repayment status. With effect from 1st December 2015 the standard variable rate will automatically reduce by 25bps with customers having the option to reduce their rate by a further 20 bps if they open a current account with KBC. The new rate of 4.25%, which when combined with the current account discount of 0.20% results in a customer rate of 4.05%.

KBC Bank Ireland continued its successful deposit acquisition with deposits (Retail & Corporate) now at €5 billion, a growth of €0.2 billion over the last quarter.

KBC maintained its progress in resolving arrears in its retail mortgage and corporate/SME loan books, offering a range of solutions for customers in difficulty, with a 20% reduction in the number of mortgage arrears cases in the first nine months of 2015, representing a significant step up versus 2014.

During the quarter, the bank also provided €100,000 funding and support to over 40 community groups through KBC’s Bright Ideas programme, which attracted over 300 applications in its second year. 

Commenting on the financial results, Wim Verbraeken, Chief Executive of KBC Bank Ireland said: “The financial results and impairments are in line with our expectations and we remain on track to return to full year profitability by 2016, so our guidance remains the same as previously stated”.

“We adopted a strategy three years ago to become Ireland’s newest retail bank with a full suite of competitive products and a clear focus on digital distribution channels supported by a light physical network. We are extremely pleased to see that our strategy is working, and with the significant progress we have made. The strong response from customers is testament to that, and evident across all channels and product segments, from current accounts and deposits, to mortgages, investments and insurance.”

As Ireland’s retail bank of the future, we will continue to invest in our retail expansion with a particular focus on enhancing the digital banking experience for consumers. Our five new Hub openings so far this year include a flagship Hub on College Green, which provides an interactive digital experience for customers. Our new website and mobile app are also gathering momentum, with 40% of daily online banking sales now coming from mobile devices.”

Looking ahead, we are focused on growing our retail business; our mortgage business is strong, driven by a compelling offering and recent enhancements including new 2, 3 and 5 year fixed rate options to help customers lower their interest rates. Retail deposits increased in Q3 and we are confident that our Extra Current Account package will further appeal to customers, offering additional discounts and savings on a range of products, such as savings, mortgages, personal loans and free day to day banking.”

“With 59,000 new customer accounts opened this year, joining the many that have been with us more long term, we appreciate and acknowledge the loyalty of all our customers. With the ongoing support and strength of our shareholder KBC Group and our focus on competitive products, offers and innovation, we are well positioned to further grow our customer base in 2015.”

KBC Bank Ireland employs over 1,069 people in Ireland with retail banking hubs in Dublin, Cork, Galway, Limerick, Kildare, Waterford, Wicklow and Kilkenny