KBC continues technical talks with Bank of Ireland as it waits for deal approval

Belgian lender expects regulatory decision on sale in second quarter of 2022, says CEO

 KBC Bank Ireland’s office on  Sandwith Street, Dublin. Photograph: Nick Bradshaw

KBC Bank Ireland’s office on Sandwith Street, Dublin. Photograph: Nick Bradshaw

 

KBC Bank Ireland has entered detailed talks with Bank of Ireland on the technical aspects of transferring its performing loan assets and deposits, pending regulatory and ministerial approval of the deal between the two lenders.

“Those discussions are at the moment continuing and we will probably have, in the near future, the results of those discussions,” KBC Bank Ireland chief executive Ales Blazek told an Oireachtas hearing on Wednesday.

He said KBC Bank Ireland and Bank of Ireland were both engaging with the Competition and Consumer Protection Commission (CCPC), which is carrying out a full phase-two investigation of the proposed sale of the Belgian lender’s assets to Bank of Ireland.

“That dialogue is continuing as we speak, in a written format,” Mr Blazek said, adding that he could not assess when the CCPC would make its decision on the case.

“We assume, and that’s an assumption that may not be fully correct, that at the beginning of the second quarter next year, we will know the decision of the CCPC on this review,” he told the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach.

If the approval is granted in this timeframe, its assets are expected to migrate to Bank of Ireland in the second half, and most likely the fourth quarter, of 2022.

KBC Bank Ireland announced in October that it had entered a legally binding agreement to sell its performing loans and its deposit book to Bank of Ireland for about €5 billion. It had earlier agreed to sell €1.1 billion of its non-performing loans to US distressed debt investment firm CarVal Investors.

Tracker cases

Mr Blazek, who was appointed to his role in March this year, said KBC was “working proactively” to resolve outstanding cases of borrowers who were pushed to give up tracker mortgages to the benefit of the bank. KBC was fined €18.3 million by the Central Bank for its part in the scandal.

He assured the committee that borrowers with non-performing loans would continue to be protected by financial regulation following the transfer of those assets to CarVal and the management of their loans by Pepper Finance.

“I have no reason to believe that general customers would be in any worse position than they are in with KBCI.”