The bank’s results show a stabilisation in its finances driven by an improving impairment situation and mortgage growth. KBC had loan impairment costs of €16m in the second quarter of 2015 compared to €62m for the same period of last year.
The full-year outlook on impairments has also improved with guidance narrowed to the lower end of the bank’s previous €50m — €100m guidance. Turning a profit of €18m is also a significant achievement given the €34m loss recorded for the same period last year.
The ongoing market recovery coupled a 0.2% reduction for current account customers and an extension of its legal fees contribution to switching customers to €2,000 have helped its mortgage market share rise to 15%.
The customer loan book contracted 1% in the second quarter of the year and 4% on an annual basis to €11.5bn — 50% of which is classified as impaired.
Mortgage arrears fell 14% when compared to the same time last year while deposits increased by more than a quarter to €5bn over the same timeframe.
“The financial results and impairments are in line with our expectations and we remain on track to return to full year profitability by 2016, so our guidance remains the same as previously stated,” said KBC Ireland chief executive Wim Verbraeken.
At group level, KBC recorded a net profit of €666m — a rise of more than €150m since the previous set of quarterly results and €332m since the second quarter of 2014.