KBC strikes deal with investment fund CarVal for €1.1bn non-performing loans

KBC has now announced that investment fund CarVal will get almost all of the rest of its loan book.

KBC Bank said it will transfer €1.1bn of non-performing home loans and landlord buy-to-let mortgages to investment fund giant CarVal, as it comes close to completing the final steps of its exit plan from the Irish banking market.

Pepper Finance has been lined up to deal with customers to service the loans on behalf of CarVal.

The deal is the latest development in the carve up of the loan books of two prominent lenders after the Belgian-owned KBC as well as Ulster Bank, a unit of Britain’s NatWest, rocked the banking industry by announcing last spring their plans to quit banking in the Republic.

As part of that upheaval, KBC had struck an agreement for Bank of Ireland to take the bulk of its Irish loan books consisting of €9bn in performing home mortgage loans.

KBC has now announced that investment fund CarVal will get almost all of the rest of its loan book.

“I’m confident that the agreement we have signed for the sale of substantially all of the remaining non-performing mortgage loan portfolio, and with Pepper managing the loans post completion, offers a good and sustainable solution for our non-performing mortgage loan customers,” said KBC Bank Ireland chief executive Ales Blazek.

KBC said that it would be approaching customers affected by the transaction.