KBC expects profit by 2016

KBC Ireland remains confident of turning a profit by 2016 despite reporting a second-quarter loss of €34m after tax and impairment costs yesterday.

KBC expects profit by 2016

Loan impairment costs of €62m contributed heavily to the bank’s overall losses despite falling by 30% compared with the same period last year.

Commenting on the mid-year results, KBC Ireland chief executive Wim Verbraeken said the results and impairments were in line with expectations. The bank maintained its prediction of a return to profitability by 2016.

The bank’s retail deposits grew to about €3.2bn in the first half of the year following the addition of more than 20,000 new customer accounts, representing an increase of more than 15% in deposits since the end of 2013.

Analysing the results, Investec noted its surprise in the bank’s improvement in net interest income from €31m in the first quarter of the year to €38m in the second.

“There are a few surprises in this update, with positive momentum in deposits and margins, while the overall quantum of the loan book looks to be heading towards stabilisation,” a note from the specialist bank read.

KBC continued its retail expansion with the opening of a further three hubs in Dublin and recruitment of 100 staff, with another 80 planned by year end.

“We advanced our strategic objectives through the delivery of an enhanced mobile banking offering, the opening of new hubs in Dublin and the launch of new products, including a competitive credit card to complement our current account,” Mr Verbraeken said.

KBC Group ended the second quarter of 2014 with a net profit of €317m, compared with €397m in the previous quarter and €517m in the second quarter of 2013.

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