KBC tells staff they will have jobs until at least end of October

KBC Bank Ireland told its 1,300 staff on Tuesday that they will remain secure in their jobs until at least the end of October, though it did not give any indication on whether roles will transfer with the planned disposal of its €10.4 billion loan book.

The Belgian-owned bank revealed last month that it was in talks to sell its almost €9 billion of performing loans, mainly mortgages, to Bank of Ireland and would seek to sell its €1.4 billion impaired loans elsewhere under a plan that will see it exit the market after more than four decades.

“We think it is realistic that we can get certainty on the process in roughly six months or so, say end of October,” the bank said in an internal email on Tuesday, as it reported first-quarter figures.

"The board of directors of KBC Group and the board of directors of KBC Bank Ireland therefore agreed to make a public and formal commitment of job security until at least until October 31st, 2021. This commitment will continue to run thereafter until such time that both the transactions ... have been signed by all parties and have received full regulatory approval, or until one or both have been cancelled."

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The email said that period of job security may be extended beyond October. Elsewhere, KBC Group executives told analysts on a call that they did not expect either deal to close until next year. Their reference during the call to an “incentive plan” being put in place for KBC Bank Ireland led to some confusion, with it transpiring that this only amounted to job security until the end of October.

A spokeswoman for the bank declined to comment on what she termed “the particulars of our human resources policies or terms of employment”.

Mortgage demand

KBC Bank Ireland said demand for mortgages increased in the first three months of the year, with new lending up 54 per cent to €296 million.

The unit said net profit was €8 million after tax and impairments in the quarter ended March 31st. KBC Bank Ireland reduced its impaired loan stock by 3 per cent to €1.39 billion, or some 13 per cent of its portfolio.

The bank saw its share of new mortgage lending market increase to 13.8 per cent in the first quarter of the year from 12.6 per cent for 2020, while the number of current accounts opened at the bank rose 2 per cent, or 9,600.

News last month that KBC Group was plotting an exit from the Irish market came just weeks after UK-based NatWest Group confirmed that it was putting its Ulster Bank unit in the Republic into wind-down.

AIB is in talks to buy €4 billion of corporate and business loans out of Ulster Bank's total €19.8 billion portfolio. Permanent TSB is also negotiating to buy a portion of Ulster Bank's portfolio, with analysts estimating that it may end up acquiring about €9 billion of loans.

Ulster Bank chief executive Jane Howard has said that job transfers "will be core to any negotiations" on loan sales. An AIB deal is expected to amount to 300 jobs moving.

An Ulster Bank spokesperson said on Tuesday that the company is also currently “rolling out a comprehensive career development and wellbeing programme for all colleagues” as it continues to plan its phased withdrawal from the market.