KBC Bank Ireland records Q3 losses of €80 million

KBC Bank Ireland has recorded a reduction in third-quarter losses of some €13 million on last year and anticipates a return to profitability by 2016.

The results came as chief executive John Reynolds announced his departure from the company, to be replaced by chief financial and operations officer Wim Verbraeken. Mr Reynolds has not revealed his plans although he says he intends to seek a new challenge.

“Four good hard years at the helm is a lot in a crisis environment,” he said, adding that he was leaving with the bank heading in the right direction.

Figures published yesterday showed KBCI losses after tax of €80 million for the third quarter of the year, down from €93 million in 2012. There were loan impairment costs of €98 million for the quarter compared to €129 million for the same period last year.

Additional impairment
An additional impairment of up to €671 million is expected for the fourth quarter, on top of the guided €104 million, totalling around €775 million.

KBC Group, however, recorded a net profit of €272 million for the quarter with adjusted net profit amounting to €457 million. "In the context of the changing regulatory environment, KBCI is taking a more conservative approach to impairments by providing for an additional €671 million in quarter four of 2013," Mr Reynolds said.

“This is partly driven by the reassessment and review of the loan book under the new guidelines as set out by the Central Bank and on the corporate business side, a more conservative outlook on future cash flows given the slower than expected recovery in Ireland.”

KBCI has also launched an advertising campaign s aimed at capturing former Danske customers following the closure of its personal banking service.

KBCI’s total retail deposits now stand at €2.9 billion (an increase of €0.8 billion since the end of 2012) with more than 7,000 new customer accounts added in the last three months.

On its retail strategy, Mr Reynolds said: “We have done a lot of general advertising to say we are open for business. We are in a growth mode so we have been promoting the brand to the world at large.”

Danske customers
However, it was too soon to tell what proportion of former Danske customers it would ultimately win over.

“We consciously haven’t put a number on it. Our perspective is we are not sure what the quantum will be. We didn’t have an insight as to whether the Danske customers were multi-banked already.”