KBC expects to write extra €100m in new mortgages this year

CEO Wim Verbraeken hopes to fully resolve tracker mortgage overcharging issue in 2017

 Wim Verbraeken, chief executive  of KBC Bank Ireland: “Overall, KBC is very positive about the long-term future in Ireland.” Photograph: Alan Betson

Wim Verbraeken, chief executive of KBC Bank Ireland: “Overall, KBC is very positive about the long-term future in Ireland.” Photograph: Alan Betson

 

KBC Bank Ireland chief executive Wim Verbraeken expects the company to write an additional €100 million in new residential mortgages in 2017.

This would bring its total home loans lending to about €750 million for this year, up from €650 million in 2016, Mr Verbraeken told “Inside Business”, a podcast of The Irish Times.

“We would expect an increase of about 15 per cent [in mortgage lending] this year,” he said.

Mr Verbraeken also said KBC’s Belgian parent company carefully considered the implications of Brexit before committing itself last week to the Irish market following a lengthy strategic review.

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“The Brexit situation has definitely been taken into account in the considerations that KBC made,” he said. “Overall, KBC is very positive about the long-term future in Ireland. We believe that we do not have to be number one, two or three to be very profitable in this market.”

KBC’s Irish subsidiary reported a net profit of €227 million for 2016, up from €75 million a year earlier.

‘Digital first’

Mr Verbraeken said KBC wants to be a “digital first, customer-centric bank” in Ireland, adding it was unlikely to add more than one or two locations to its existing network of 15 hubs here.

KBC opened more than 70,000 new customer accounts in 2016, bringing its total to about 240,000.

Mr Verbraeken acknowledged that KBC was “sub-scale” in terms of consumer finance loans and credit cards. “Our ambition for the future is to have the same relevance on these products [as mortgages] but also on deposits and asset management,” he said, adding a market share of 10 per cent in these products areas was its benchmark.

He declined to be drawn on how many KBC tracker-mortgage customers might have been denied the proper interest rate or overcharged since the crash, and wouldn’t comment on how much this might ultimately cost the bank in financial redress. “Where we have found errors . . . we have already reached out to customers to put it right,” he said.

Will this issue be put to bed in 2017? “I would hope so, yes.”