KBC remains aloof of loan sales

By Eamon Quinn

KBC Ireland said it can remain aloof from other banks selling off loan books for the time being, saying it had reduced its substantial amount of non-performing loans (NPLs) by €1.3bn in the past year by working through its books.

Chief executive Wim Verbraeken said the bank had one of the most conservative approaches to NPLs in the Irish market and that although it had not ruled out sales, they were not a priority at this time.

It comes as AIB said it sold €1.1bn of investment property loans at a discount to a group that included vulture fund Cerberus, while Permanent TSB said earlier this week it would sell a pared-back €2.2bn of troubled home and investment loans by the end of the year.

Ulster Bank last week said it had started the auction of 6,500 mortgage loans worth €1.6bn. AIB’s sale, which involves 800 customers, will raise €800m for the bank.

Debt advisers and opposition politicians have warned about the sales to new vulture fund buyers despite the process securing implicit backing from the Central Bank and the Government. Banks say they are under pressure from the ECB to reduce their crisis-era soured loans. KBC said its net profit of €59m in the three months to the end of March — down from €70.4m a year earlier — marked a “solid financial performance”.

After selling €198m in new mortgages in the quarter, Mr Verbraeken said it had slightly increased its mortgage share of over 10%. He would not say whether there was room to cut mortgage rates but noted that 80% of its mortgages were on fixed rates as customers were “locking in”.

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