Bank of Ireland stays on course to complete KBC mortgage loans by end of March

Bank of Ireland posted an underlying profit of €419m and a small decline in non-performing loans to €4.2bn.
Bank of Ireland stays on course to complete KBC mortgage loans by end of March

Bank of Ireland said it is well down the road to appointing a new CEO to replace Francesca McDonagh who announced this year she was leaving to join Credit Suisse.

Bank of Ireland said it expects to have completed the €9bn acquisition of the mortgage loan books from rival KBC Bank by the end of next March. KBC is one of two rival lenders that are closing in the Republic.

Outgoing CEO of Bank of Ireland Francesca McDonagh said the acquisition of the KBC loans and other deals involving the closure of Ulster Bank mark a fundamental restructuring of “the Irish banking landscape”.

In its earnings statement for the first six months of the year, the bank said it is well down the road to appointing a new CEO to replace Ms McDonagh who announced this year she was leaving to join Credit Suisse. Bank of Ireland plans to name an interim CEO in the meantime.

At the half-way stage, the bank reported net income was “modestly higher” than a year earlier as it posted an underlying profit of €419m and a small decline in non-performing loans to €4.2bn. Net lending rose 7% in the period. On the outlook, Bank of Ireland said it expects income to be “modestly higher” for the whole of 2022.

“On the KBC acquisition, the financial effects remain in line with previous guidance… Subject to regulatory clearances, the KBC portfolio acquisition is expected to complete by end Q1 2023,” the bank said.

The plan by Bank of Ireland to secure €9bn mortgage loans from KBC was approved by the competition watchdog in March.

The Commission for Competition and Consumer Protection has also approved two other big deals involving banks that are shutting their doors in the Republic. AIB plans to acquire €3.7bn in commercial loans from Ulster, while Permanent TSB will acquire €7.6bn in non-tracker mortgage loans and 25 branches from Ulster Bank.

The watchdog will also likely investigate AIB plans to also get tracker loans from Ulster Bank.

Bank of Ireland also said on Wednesday it had fully completed the acquisition of Davy, Ireland’s largest stockbroker, which it bought for €440m last year, and released details of the profitability of Davy for the first time.

“On a pro-forma basis, assuming Davy was part of the group from 1 January 2022, underlying profit of €12m would have arisen in H1 2022 reflecting income of circa €86m and costs of circa €74m. A similar performance for Davy is expected in H2 2022,” it said.

More in this section

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Home Delivery
logo-ie

HOME DELIVERY SERVICE

Have the Irish Examiner delivered to your door. No delivery charge. Just pay the cover price.

Revoiced
Newsletter

Some of the best bits from irishexaminer.com direct to your inbox every Monday.

Sign up