KBC Ireland halves losses but faces many challenges in returning to profit

KBC Ireland made an after-tax loss of €77m for the first three months of the year, compared with a €148m loss for the same period last year. Loan loss provisions for the quarter were €99m compared with €195m for the first three months of 2012.

However, the Belgian-owned bank faces formidable challenges in returning to profitability. Mortgage arrears are still rising, although the pace of increase is showing signs of stabilisation, albeit at very high levels.

The bank has a residential mortgage book of €9.2bn with arrears reaching 18.1% at the end of March. There is a €3.1bn mortgage book in the buy-to-let sector with arrears running at 30.6%. There are €1.7bn of SME and corporate loans, of which arrears are running at 19.5%.