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KBC Bank Ireland PLC, Financial Results for Q3 2018 (to 30th September)

15 November 2018

KBC Bank Ireland reports net profit of €33.6 million for Q3 2018 (after tax and impairment)

"KBC is changing the way the people of Ireland bank by providing instant, accessible financial products and services." Wim Verbraeken, Chief Executive, KBC Bank Ireland

Key Financial Developments  
  • KBC Bank Ireland reports net profit of €33.6 million for Q3 2018 (after tax and impairment).
  • Operating profit of €23.4 million (before tax and impairment).
Customer and Market Developments
  • Almost 20,000 new customer accounts were added in the third quarter of 2018, bringing the total number of new customer accounts added in the first nine months of 2018 to over 60,000, primarily driven by market leading products and digital innovation.
  • New mortgage lending in Q3 of 2018 of over €240 million bringing lending to €662 million in the first nine months of 2018. KBC now offers some of the most competitive rates in the market for both short-and long-term fixed rate options.
  • New innovative app developed with feedback from consumers and launched in late August has seen digital activity increase by 47% compared to Q3 of 2017.
  • KBC will add further innovation to the KBC App allowing customers to benefit from the opportunities afforded by Open Banking (PSD2 - the Payments Services Directive) with the launch of multibanking next month.
Wim Verbraeken, Chief Executive, KBC Bank Ireland said:  
KBC is changing the way the people of Ireland bank by providing instant, accessible financial products and services. Today’s results confirm that our approach to disrupt the banking sector is working with almost 20,000 new customer accounts opened in the past three months, bringing the total number of new accounts added in 2018 to over 60,000. We now have over 278,000 customers who have chosen KBC as their banking provider and we are thankful for their support. Customer-centric innovation is at the core of everything we are doing in Ireland and it is reassuring to see that our investment and dedication to innovation is resonating with our existing and new customers.

“We look forward to launching the first phase of multibanking next month, whereby it will enable customers add accounts from other banks to our app. When we launch, customers will be able to check the balance of current accounts they hold with other financial institutions and we will add more functionality to our already market leading digital wallet. At KBC, we are always looking for ways to make banking easier and more efficient and this new addition clearly reinforces the pioneering and forward-looking role that KBC plays in challenging the status quo of traditional banking in Ireland.”

Financial Highlights

KBC Bank Ireland has reported a net profit of €33.6 million after tax and impairments for Q3 2018 compared to a net profit of €2.6 million in Q3 2017.  KBC Group ended the third quarter of 2018 with a net profit of €701 million. Combined with the €1,248 million reported at the H1, this brings KBC Group’s net result for the first nine months of 2018 to €1,948 million.
Customer Acquisition driven by Digital and Product Innovation

The third quarter of 2018 saw almost 20,000 new customer accounts opened, bringing the total number of new customer accounts added in the first nine months of 2018 to over 60,000. This marks a new milestone of over 278,000 customers attracted to KBC Bank Ireland’s competitive offering, digital solutions and commitment to innovation in product development and customer experience.

As the only bank in Ireland to offer the full suite of digital wallets, KBC’s recent statistics on digital wallet transactions illustrate the increased demand for customers to adopt new payment technology. Overall, the number of mobile wallet transactions increased by 183 percent when compared to the same period last year. The value of those transactions also grew exponentially, up 287 percent quarter on quarter.

KBC’s new app, which was announced in August, creates an unrivalled banking experience with a range of market first digital capabilities designed to meet customers’ needs including, Instant Credit Card, Digital Personal Loans and a new first to market Lost/Stolen instant digital card replacement service. These new features are experienced by customers through a market-leading user interface and experience. The app’s official launch follows intensive consumer consultation and research with KBC consumers and staff providing a unique comprehensive experience.

Competitive Mortgage Proposition

New mortgage lending by KBC was over €240 million in Q3 2018, as first-time buyers, movers and switchers responded to the offers of lower monthly repayments and better long-term value. Lending in the first nine months of 2018 reached €662 million. KBC also extended its mortgage Switcher offer which entitles customers to €3,000 when they switch their mortgage to KBC before 31st December 2018.

In September, KBC Bank introduced new rates for first-time buyers, movers and switchers . The reduction sees the bank reduce its 1, 2, 3 and 5-year fixed rates by between 0.25% and 0.55%, while maintaining its market leading 10-year fixed rates.

Dara Deering, Executive Director, Retail Banking, KBC Bank Ireland, said:
We are very proud of the hard work and dedication of the KBC Ireland team in putting customers first and developing best in class ways to bank, this was typified by our new app launch in August. We have set ourselves a very ambitious customer target of 425,000 by 2020 and this quarter keeps us on track to deliver the best banking in Ireland to these people.
The reduction to our fixed mortgage rates, providing homebuyers and switchers with better long-term value and lower mortgage repayments while maintaining our market leading 10-year fixed rates also came into play in September. These low rates, coupled with our ongoing investment to make our best in market digital offering even better, is ensuring that KBC is the force for innovation that Ireland’s traditional banking sector needs.”

Sustainability Programme

KBC’s continued commitment to health and wellbeing initiatives was underpinned by its recommitment to the sponsorship of the Wellgood programme and its announcement as headline sponsor of the Dublin Marathon from 2019.

KBC’s Sustainability Programme aims to make a positive impact on the lives of employees, customers and communities. Following on from an extensive audit of KBC throughout Q3 by Business in the Community (BITC), KBC was once again accredited with the Business Working Responsibly Mark which now includes all KBC hubs around Ireland.

KBC sponsored the Irish Early Career Awards for the second year running, recognising the achievements of young professionals in Ireland and rewarding innovation and best practice across a broad range of industries. As part of the sponsorship, the inaugural KBC Early Career Bursary, a fund designed to support young entrepreneurs, was awarded to Jennifer Hourihane, CEO and Founder of Oathello, which is leading the modernisation of the notary and document certification market.