Johan Thijs, KBC Group CEO, welcomed today’s transaction:
“KBC Bank Ireland has been building down organically its legacy portfolio of non-performing loans in Ireland over the past few years. However, over the last months, there has been a growing interest from the international financial markets for non-performing loan exposures. This is a clear market trend. KBC wishes to accelerate the reduction of non-performing loans by acting upon the increased interest presented in the market.
During the first quarter of the year, we assessed views on market valuations for this type of portfolio. Following this exercise and based on the value of the portfolios, we decided to proceed with a confidential process to maintain the efficiency and minimise the potential disruption to the business and the execution of our strategic plan in Ireland.
The sale of sub-portfolios fully fits within the bank’s strategy and ambition. It will allow KBC Bank Ireland to achieve a NPL ratio reduction of approximately 11%-points (versus end 2Q18), thus accelerating KBC Bank Ireland’s ongoing NPL reduction efforts. Moreover, the sale of the UK Buy-to-Let portfolio allows KBC Bank Ireland to enhance the focus on its core strategy ‘Digital First’ in (Irish) retail and micro SME banking and contributes to a de-risking linked to Brexit. At the same time, the transaction results in balance sheet optimization allowing KBC Bank Ireland to reduce future earnings volatility, to clean up legacy and to fully focus on sustainably and profitably growing its retail and micro SME business."
Wim Verbraeken, CEO KBC Bank Ireland concludes :
“Over the past two years, KBC Bank Ireland has focused on the implementation of its new ‘Digital First’ strategy. KBC Bank Ireland has already launched a broad range of new products and services, now offering a full suite of competitive retail banking products. This has resulted in a continued expansion in the retail market. Going forward, our focus will be on retail and micro SME, as already confirmed during the KBC Group Investor Event and strategy update in Dublin in June 2017."
* This news item contains information that is subject to the transparency regulations for listed companies.