KBC Ireland boss says arson attacks haven’t dented market commitment

Belgian-owned reveals 21% more customers affected by tracker mortgage debacle

Photograph: Bryan O’Brien

Photograph: Bryan O’Brien

 

KBC Bank Ireland’s chief executive, Wim Verbraeken, insisted on Thursday that high-profile arson attacks sustained by some of its properties before Christmas have not dented its Belgian parent’s commitment to the market.

The company’s Dublin headquarters and two branches were subject to arson attacks late last year. The occurred after the lender moved to repossess a farm in Strokestown, Co Roscommon, almost a decade after it took proceedings against farmer Michael Anthony McGann seeking to recover money owed. The McGann family have stated they condemn “all forms of violence”.

While Mr Verbraeken declined to comment on the Roscommon case, he told The Irish Times: “The most concerning part was obviously the attacks and threats that were levelled against the bank. I’m not making any statement about links or causality, but it happened in the same timeframe.”

“We absolutely believe in the system in Ireland and it gives me an opportunity to reiterate that repossessions are really only used as an absolute last resort when other options ... have been exhausted,” he said.

Net profit dipped

Mr Verbraeken’s first public comments on the matter came as KBC Bank Ireland reported full-year results, which showed that its net profit dipped to €162 million in 2018 from €183 million a year earlier. The wider KBC Group, which affirmed its commitment to the Irish market two years’ ago, following a review of the operation, posted a €2.57 billion profit last year.

The chief executive said that staff security has been KBC Bank Ireland’s “top priority” since the attacks and it has engaged frequently and in-depth with employees on measures to protect them. He said a refusal to engage with the Financial Services Union (FSU), which has a number of members at KBC, on its concerns was justified as the bank does not recognise labour unions.

KBC Bank Ireland’s earnings were underpinned last year as it freed up €112 million of bad loan provisions, as the economy grew and lenders continued to restructure problem loans, its parent said in a separate statement. That was down from €215 million of provisions that were released in 2017. The bank expects provisions releases to fall to between €5 million and €25 million this year.

Additional customers

The lender also revealed that on Thursday that it had identified an additional 661 customers that were hit by the State’s tracker mortgage scandal. That means that the Belgian-owned bank has identified a total of 3,737 tracker cases. The Central Bank said last week that the number of accounts caught up in the debacle across the industry had risen by 1,400 to 39,800 since last August.

The wider tracker issue relates to where borrowers were either wrongly denied their right to a cheap mortgage linked to the European Central Bank’s main rate, or put on the wrong rate – going back as far as 2008. Mr Verbraeken said KBC’s latest cases comprise borrowers who are being compensated for a brief period about a decade ago when they were on fixed-rate mortgages when they would have benefitted more from being on cheaper tracker rates.

Meanwhile, KBC Bank Ireland also saw its non-performing loans (NPLs) ratio fall by almost 12 percentage points to 23.1 per cent in the final quarter of 2018, mainly as it sold €1.9 billion of impaired buy-to-let mortgages and corporate loans to Wall Street giant Goldman Sachs.

KBC Bank Ireland’s number of customers rose by 24,000 in 2018, bringing its total number to 286,000, while new mortgage lending for the year amounted to €942 million.