Readers like you keep news free for everyone.
More than 5,000 readers have already pitched in to keep free access to The Journal.
For the price of one cup of coffee each week you can help keep paywalls away.
RollingNews.ie
# KBC
KBC to sell most of its loans to Bank of Ireland in €5 billion deal
KBC Bank Ireland said the transaction would ultimately result in KBC Group’s withdrawal from the Irish market.
BANK OF IRELAND is to acquire almost all of KBC Bank Ireland’s performing loan assets and liabilities in a deal worth €5 billion.
In a statement this morning, the banks announced that they were in talks since April, and have confirmed that they have entered into a legally-binding agreement.
KBC Bank Ireland said the transaction would ultimately result in KBC Group’s withdrawal from the Irish market.
The deal will see Bank of Ireland acquire around €8.8 billion worth of performing mortgages, €100m worth of mainly performing commercial and consumer loans, €4.4 billion of deposits and around €300m of non-performing mortgages.
KBC Bank Ireland said customers do not need to take any immediate action following the deal.
“Customers can continue to access KBC Bank Ireland’s retail banking and insurance products through its digital channels and hubs,” KBC said in a statement.
“Customers will also continue to be afforded all legal and regulatory protections. KBC Bank Ireland is focused on ensuring that the migration of its customers to Bank of Ireland Group is carried out in an orderly manner.”
The bank said it has been “very focused on the welfare of its employees” during the process of leaving the Irish market.
“KBC Bank Ireland remains acutely aware of the need to maintain open lines of communication with its employees and to provide as much certainty as possible in the context of this transaction,” the bank said.
“In this regard, KBC Bank Ireland has recently engaged in a Redundancy Consultation process with its Employee Council resulting in strong terms that compare very favourably in the sector and reflect the bank’s deep appreciation for the service given by its employees.”
The transaction remains subject to regulatory, including Irish competition, approvals.
KBC Group CEO Johan Thijs said today’s deal with Bank of Ireland represents an important step in KBC Group’s withdrawal from the Irish market.
“The transaction remains subject to regulatory approvals. Yet, I’m confident that together with Bank of Ireland Group our customers will be provided with a good home, whilst continuing to enjoy the same legal and regulatory protections,” he said.
“We remain committed to managing this process responsibly over the coming period,” said Thijs.
KBC Bank Ireland CEO Ales Blazek said: “I would like to reassure our customers that they do not need to take any immediate action at this point as a result of this announcement.”
“KBC Bank Ireland remains committed to servicing customers of its retail banking and insurance products through its digital channels and hubs.
“We will communicate to our customers well in advance of any actual steps that may be taken with respect to their products or if our customers need to take any action at any point,” he said.
Group CEO of Bank of Ireland, Francesca McDonagh, said: “We are delighted to have reached agreement with KBC on this important transaction. This acquisition is a positive development for our business and consistent with our growth strategy. We look forward to supporting our new customers on their important financial decisions over the years ahead.”
In April, KBC said it was analysing this portfolio and reviewing its options for divestment, leading to concerns over the bank’s withdrawal from the Irish market.
The Financial Services Union, a trade union for staff in the financial sector, at the time said it was a “deeply worrying development” and called on the banks to publish their Memorandum of Understanding.
