Image Bank of Ireland agrees deal to purchase KBC's loan book
Image Rob Flynn
Staff Writer

The deal will see Bank of Ireland pay about €5 billion for all of KBC’s performing loans, which includes mortgages and business and consumer loans. If fully approved, it will ultimately result in KBC's exit from the Irish market.

It’s not a particularly good outlook for banking customers here in Ireland, especially considering both Ulster Bank and KBC are planing to leave the country here soon.

Back in July Ulster Bank agreed to sell its mortgages to Permanent TSB ahead of the long-time financial institution closing up shop here.

And now it’s KBC’s turn, with the bank finally agreeing a deal with none other than Bank of Ireland to take control of its performing loan assets and liabilities.

The sale, which includes KBC’s existing mortgage loan book, is worth about €5 billion.

Here’s what you need to know.

BOI secures purchase from KBC

In a surprise to most consumers KBC Bank Ireland announced in April that it was considering leaving the Irish market and was in talks with Bank of Ireland about the sale of its performing loans and liabilities.

Bank of Ireland has now agreed on a deal with the Belgian Bank in a sale that’s worth approximately €5 billion.

Included in the sale are the following:

  • All KBC’s performing loans & deposit book
  • KBC’s performing mortgage book
  • €100m worth of performing commercial and consumer loans
  • €300m of non-performing loans from KBC Bank Ireland

However, the deal remains subject to regulatory approvals, including from the Irish Competition and Consumer Protection Commission (CCPC).

Announcing the agreement, KBC Group CEO, Johan Thijs, said: 

Today’s agreement with Bank of Ireland Group regarding the sale to Bank of Ireland Group of substantially all of the performing loan assets and deposits of KBC Bank Ireland and a small portfolio of non-performing mortgages 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. We remain committed to managing this process responsibly over the coming period.

Key messages for customers

In a statement released by the bank, it announced a number of important things for existing KBC customers.

KBC Bank Ireland said its customers do not need to take any immediate action as a result of today's news as the sale remains subject to all the relevant regulatory approvals.

It also said, should customers wish to apply for any of its retail banking products (current account, mortgage, deposit, personal loan/credit card) or insurance products (life, home and car insurance) it remains open for business as usual.

It will however ​pause the acceptance of new applications for PRSAs, investments, personal and business overdrafts and business credit cards.

KBC’s branches (of which it has 12) will also remain open for customers for now but will likely close closer to the time of the bank’s exit.

Additionally, the bank said all customers will continue to be afforded all legal and regulatory protections under the law.

Will there be changes?

In short yes, but this isn’t something KBC customers should be concerned with right now.

When there are further updates KBC will write to customers with any additional information and support they may require. But eventually, all performing loans, deposits and mortgages will be moved over to Bank of Ireland.

If you have a mortgage with KBC the sale won’t affect your repayments or rate either.

Customers will also be provided with plenty of notice should any changes to their account be made, and in line with all legal and regulatory protections.

KBC gave no specific reasons for wanting to exit the Irish market back in April, but mentioned "the challenging operational context for European banks".

All of this being said, if you are a KBC current account or credit card customer you will likely need to switch your accounts to a new banking provider eventually…

Compare current accounts on bonkers.ie

If you’re a KBC customer and are looking to switch providers, you can use our current account comparison service to easily compare different current account features and charges from all of Ireland’s main providers.

More and more people are opting to carry out their everyday banking through digital banks. If you’re considering signing up for a digital bank, take a look at our comparison on N26 versus Revolut for a comprehensive review of the two most popular options. We also discussed both fintechs in a recent episode of our bonkers.ie podcast, Current accounts: a deep dive.

Read our guide on eight things to consider when choosing a new current account provider for information and what to take into account when looking for a new home for your current account.

Before making the switch, you might want to consult our guide on how to switch current accounts or take a look at the recent piece we wrote on who is offering the best value current accounts in 2021.  

Get in touch

What do you think of the news from KBC? We’d love to hear your thoughts in the comments below!

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