Chairman's Statement

2017 saw another robust performance by the Irish economy which went from strength to strength with broad based increases seen in business activity as well as employment. The main driver was a continuing improvement in domestic demand which prompted further gains in employment and sustained a declining trend in unemployment.

With conditions in Ireland’s main trading partners proving stronger than expected, exports also performed well. These circumstances translated into a further reduction in Government borrowing and in key public debt ratios. As a result, financial market sentiment towards Ireland continued to improve.
Throughout the year, KBC in Ireland went from strength to strength. Our total customer base now stands at 262,000 with over 75,000 new customer accounts opened over the last 12 months. For the sixth year running, the Bank also maintained its number one ranking as having the best reputation of any retail bank in Ireland by RepTrak and our staff continue to deliver great service and experience to our customers on a daily basis.

We have embedded ourselves across Ireland’s local communities with KBC opening its 16th hub in 2017 in Blanchardstown. This hub is the first one to open seven days a week. KBC is also the first bank in Ireland to offer 24/7 customer service providing a banking experience that truly works for our customers.
The financial performance of the Bank for the year was very satisfactory as it reported an operating profit of €112m excluding the exceptional provision of €115.9m recognised in respect of the Tracker Mortgage Examination. Net Profit after Impairments and Tax was €182.7m due in part to the release of loan provisions. The Bank’s capital base has remained solid with a fully loaded CET 1 Capital Ratio of 14.0% as at 31 December 2017.
On the 9th of February 2017, the Board of KBC Group announced its commitment to the Irish market as Ireland became one of the Group’s core markets, alongside Belgium, Czech Republic, Bulgaria, Slovakia and Hungary. KBC Bank Ireland will be a digital-first customer-centric bank where digitisation will support a greater customer experience.

In addition to this the Bank will be the frontrunner in the digital transformation of KBC Group where solutions will be tested for further group-wide rollout. Ireland will be a core market in which KBC will continue to invest.
With this market positioning I am delighted to say that KBC in Ireland realized significant digital improvements in 2017 with the establishment of a dedicated digital innovation unit that allows the team to develop and bring innovation to the market quicker than our competitors.

2017 saw KBC Bank Ireland introduce Android Pay, Apple Pay and Fit Bit Pay – all of which allow customers to pay digitally using their mobile devices. In September 2017,

KBC Bank Ireland also launched its new mobile on-boarding app that allows customers avail of a current account and digital card in just 5 minutes. This was a market first within Ireland and has also received both external and international recognition.
The staff of KBC Bank Ireland have the skills, energy and determination to be the digital frontrunner and the KBC Group is ready to support them. In the medium and long-term this customer-centric approach, combined with differentiation through innovation, partnerships and collaboration will result in a sustainable future-proof business model and financial results to the benefit of its customers, staff and all other stakeholders.

I would like to extend my thanks to CEO Wim Verbraeken, his management team and staff who have led the organisation over the past year as it transformed itself into a relevant retail bank in the Irish landscape. I am convinced that both the customers and the employees of KBC Bank Ireland as well as all other stakeholders will benefit significantly from our decision to have Ireland as the digital front-runner for the KBC Group.

KBC wants to play an increasingly important role in supporting the local Irish economy and society and help Irish retail and micro SME customers realise their ambitions.
I would like to thank Mr. Gary Britton for his significant contribution and service to the Bank as Non-Executive Director over the past number of years. I would also like to acknowledge the key role that all of our Non–Executive directors play in guiding the overall performance and strategic direction of the organisation.

I look forward to 2018 with great enthusiasm and positivity as the bank continues to
grow from strength to strength in Ireland.

Luc Popelier
March 2018