KBC Bank Ireland is attracting new business with its low mortgage rates and will compete with any new mortgage entrants on price, its chief executive has vowed.
Wim Verbraeken said the Irish unit, which has aggressively competed in recent years with the big three home loan lenders, AIB, Permanent TSB and Bank of Ireland, had contributed €34.2m to the €392m net profits earned by the Belgian group in the first three months of the year.
Mr Verbraeken said its announcement of cuts in its fixed and variable interest rates was long in the planning and was not a reaction to cuts by AIB.
KBC Ireland had added 16,800 accounts in the quarter, helping it capture 14% of the new home loans market, up from a retail mortgage share of 10.6%.
He would not comment on pledges made by Fianna Fáil and Sinn Féin politicians to table legislation to facilitate the introduction of some sort of cap on variable mortgage rates here.
Independent Alliance TDs, who have joined the government, have also highlighted the high levels of mortgage interest rates.
“New buyers who draw down a mortgage and open a KBC current account benefit from one of the lowest monthly repayments in the market, irrespective of loan-to-value ratio,” KBC said.
Yesterday, Fine Gael MEP Brian Hayes said in Belgium, home loan borrowers can borrow for 20 years at a fixed rate of 3.15%, and, in France last year, people could fix at 2.4%. “Fixed interest mortgages should be the future in Ireland,” Mr Hayes said.
Analyst Emer Lang at Davy Stockbrokers said KBC Group kept its options open for the future of the Irish unit. She said KBC’s Irish loans contracted, while its deposits rose in the quarter
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