KBC planning to exit Irish market

Friday, April 16

(Photo: Aidan Crawley/Bloomberg via Getty Images)

KBC Bank Ireland has announced that it is in discussions about the possible sale of its performing loan assets and liabilities to Bank of Ireland.

They said the deal would ultimately result in the bank's withdrawal from the Irish market.

KBC has entered into a Memorandum of Understanding with Bank of Ireland, which could see Bank of Ireland committing to buying "substantially" all of KBC Bank Ireland's performing loan assets and liabilities.

The deal is subject to due diligence, further negotiation and agreement of final terms and binding documentation.

The agreement would also be subject to regulatory approvals.

In the meantime, KBC says they are committed to continue to offer retail banking and insurance services to its existing and new customers.

The Belgian bank first entered the Irish market in 1978 and has 1,260 employees across its 12 locations around the country.

KBC has a 12.6% share of the mortgage market and about 320,000 customers at the end of 2020.

The bank gave no specific reasons for wanting to exit the Irish market but in a statement cited "the challenging operational context for European banks".

Finance Minister Paschal Donohoe said that KBC's decision to leave the Irish market is regrettable, particularly as it comes so soon after NatWest's decision to withdraw Ulster Bank from the country.