KBC Ireland ‘cannot rule out’ mortgage vulture sales

By Pádraig Hoare

The boss of KBC Bank Ireland has said he “cannot rule in or rule out” potentially selling off of thousands of loans to vulture funds, even where customers are complying with the terms of their restructured payments.

Wim Verbraeken told the Oireachtas Finance Committee that its current mortgage non-performing loan (NPL) ratio was 37%, including €2bn worth of accounts paying restructured loans such as split and interest-only mortgages.

Asked by Senator Rose Conway Walsh if loans could be sold to vulture funds, Mr Verbraeken said he “could not say if they would or could” be sold on, but that the bank was considering a variety of options.

However, he stressed that the bank was satisfied with customers who had complied with the terms of their restructured loans and that while the 37% was “optically quite high”, the bank was “not hung up” on the figure.

NPLs have reduced from €8bn in December 2014 to €4.5bn at the end of the first quarter of 2018, he said.

The bank has preferred to engage with customers on a case-by-case basis to resolve distressed loans and arrears to reduce NPLs, said Mr Verbraeken.

There are more than 2,660 “proposed or concluded” split mortgages and more than 2,670 customers paying interest-only or interest and part capital, according to KBC’s figures.

KBC Ireland has €120m set aside for the tracker mortgage redress and compensation, Mr Verbraeken said, with 80% of the money paid back to customers who had funds wrongly taken from their accounts, and 20% in compensation.

The total number of mortgage accounts identified as impacted at KBC is 2,754, he said. All have been offered a financial package but around 70 customers owed around €40,000 have not yet been traced.

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