Along with other domestic and foreign lenders, KBC got severely burnt during the crisis on its commercial and residential property loans and needed tens of millions of euro from its group to keep afloat.
Though criticised by the Financial Services Union over the length of the review, its parent has concluded the Irish bank has a secure future because the Irish economy has sprung back so strongly.
Ireland chief executive Wim Verbraeken said the economic recovery had helped the bank in its “remarkable turnaround” and it was now poised to build out from its success in mortgage lending. The decision to stay in Ireland was not influenced by short-term considerations such as the Government’s new incentives offered for first time buyers, the bank said.
Mortgage market analysts estimate the bank had secured up to a 12% share of new mortgage lending of around €5.6bn last year because it offers among the lowest variable and fixed rates. That new loans market may reach as much as €7.5bn this year, and KBC said it will at least maintain its market share as new lending grows.
However, Mr Verbraeken said that KBC was now seeking, in time, to grow into other areas, including lending to professionals, which he said had been ignored by traditional lenders in recent years. Citing research, the bank believes it will be able to sell a full range of products because professionals like “one-stop shop”.
To help boost its growth plans, the bank is recruiting to fill 100 new posts this year, but only in “exceptional” circumstances would those plans include increasing its current network of 15 hubs or outlets, it said.
Mr Verbraeken said the bank’s commitment to Ireland implied “an ambition” to replicate the dual bank and insurance business its parent operates across the continent.
He said, however, the bank would grow its relationship with existing insurers — and that acquiring an insurance business would be a long term project. KBC had started to write to tracker customers who it had overcharged but was still completing the process.
Supervised by the Central Bank, lenders are involved in a redress programme for customers.