KBC injects €100m into Irish entity

Belgian bank KBC has pumped another €100 million into its Irish bank after loan losses remained high and it made an after-tax loss of €71 million in the third quarter.

Provisions for bad debts on KBC Bank Ireland’s €16 billion loans fell to €129 million from €136 million during the previous quarter. KBC still expects loan impairment charges of between €500 million and €600 million in Ireland this year.

Arrears of 90 days or more stood at 22.5 per cent of loans at the end of September, up from 21.4 per cent at the end of June. The bank said 9.3 per cent of loans in Ireland were “high risk” and another 12.5 per cent had been restructured.

On KBC’s €9.4 billion of owner-occupier mortgages, 16.9 per cent of loans were 90 days or more in arrears up from 15.9 per cent in June. Non-performing loans on KBC’s €3.2 billion buy-to-let mortgages rose to 28 per cent from 26.7 per cent.

Nearly 18 per cent of KBC’s €1.8 billion SME/corporate loans were in arrears of 90 days or more. Almost 91 per cent of KBC’s €500 million property development loans were non-performing. It said loan losses in Ireland were “still sizeable”.

The housing market “may have bottomed out” but it remained challenging, KBC said.

The lender pumped €75 million into the Irish bank earlier this year, the first injection since the banking crisis.