KBC Bank to sell €260m corporate loans to Bank of Ireland

Portfolio sale set to close in coming months as seller shifts focus to retail, SME clients

The bank said the transaction would have a negligible impact on KBC Group’s profit and loss and capital ratio. Photograph: Bryan O’Brien

The bank said the transaction would have a negligible impact on KBC Group’s profit and loss and capital ratio. Photograph: Bryan O’Brien

 

KBC Bank Ireland has agreed to sell its legacy performing corporate loan portfolio of about €260 million to Bank of Ireland.

The move is part of efforts by KBC to continue shifting its core business focus to retail and micro SME clients.

The bank said the transaction, which is expected to close in the course of 2019, would have a negligible impact on KBC Group’s profit and loss and capital ratio.

KBC Bank Ireland said it would contact the corporate customers involved before closing the transaction to inform them that their loans are being transferred, and to confirm that existing legal and regulatory protections remain in place with Bank of Ireland.

KBC Group chief executive Johan Thijs welcomed the transaction. “KBC Bank Ireland’s strategic ambition to become KBC Group’s digital frontrunner focussing on retail and micro SME clients has resulted in a gradual building down of the bank’s performing and non-performing corporate loan portfolio in Ireland over the past few years,” he said.

“Last year’s sale of a major part of this portfolio has now been complemented with the transfer of a large part the remaining corporate portfolio to another strategic player, Bank of Ireland.

“At the same time, this transaction results in further balance sheet optimisation, allowing KBC Bank Ireland to reduce future earnings volatility, to clean up legacy and to fully focus on sustainably and profitably growing its retail and micro SME business.”

BoI ambitions

Bank of Ireland said the acquisition was consistent with its plan to grow its lending volumes.

Gavin Kelly, chief executive, Retail Ireland, Bank of Ireland said: “We are pleased to announce this transaction which is a positive development for our business.

“This is a strong portfolio of performing commercial loans and it further strengthens our business banking portfolio.

“As Ireland’s leading retail and commercial bank – with operations in Ireland, the UK, the wider European Union and the United States – Bank of Ireland looks forward to welcoming these new customers to the group when the transaction closes.

“We will be communicating directly with all customers and setting out the range of products and services we can offer to support their growth ambitions.”