KBC Ireland mortgage lending soars 67% in third quarter

KBC Bank Ireland said its mortgage lending soared 67 per cent to €297 million in the third quarter from the previous three months, with the Belgian-owned lender fielding a record number of home loan applications as the economy continued to open up from the Covid-19 lockdown.

While mortgage completions remained down 16 per cent for the first nine months of the year, at €677 million, this was better than the 20 per cent decline of the wider Irish market.

The bank posted a €41 million net loss for the first nine months, driven by a €95 million provision taken in the first half of the year for an expected surge in bad-loan losses due to the economic shock.

The company, part of Brussels-based KBC Group, posted a €14.4 million profit for the third quarter even after taking an additional €4 million charge for its role in the State’s tracker mortgage scandal, as the Central Bank fined it €18.3 million. KBC Ireland had previously set aside €14 million for an expected sanction.

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“Despite the difficult economic environment, KBC Bank Ireland has continued to deliver a strong performance, particularly around new mortgage lending which saw sustained growth across the quarter,” said the bank’s chief executive, Peter Roebben.

“As we continue to navigate Covid-19, many Irish people and businesses are managing unprecedented personal and financial difficulties and we are committed to helping our customers with the challenges they face at each stage of this pandemic. In response to this current phase of Covid-19 we have designed a range of tailored solutions to support customers who are vulnerable or find themselves in financial difficulty.”

Mr Roebben said three-quarters of the 6,900 KBC Ireland borrowers who availed of payment breaks between March and September have since returned to normal monthly payments. More are scheduled to roll off the relief programme in the coming months, though “a number of customers” will need further forbearance and restructuring.

The chief executive said Level 5 restrictions introduced late last month and set to run until the beginning of December, which have resulted in the closure of non-essential retail outlets, are not having a “major effect” on the bank’s loan book.

“While there’s been good news this week on the vaccine front, there is still so much uncertainty out there,” he said, referring to the announcement on Monday that Pfizer and its partner BioNTech had seen their Covid-19 vaccine candidate prove more than 90 per cent effective in advanced clinical trials.