Belgian bank-insurance group KBC has unveiled plans for a €1bn payout to shareholders following the sale of most of its mortgage, personal loans and other assets to Bank of Ireland.
Last week, Bank of Ireland announced that it completed its takeover of the majority of KBC Ireland’s mortgages, personal loans and other assets, a transaction that involved around 150,000 Irish customers.
The loans comprise of around €7.6bn worth of performing mortgages with around €100m each of SME and consumer loans and €100m of non-performing loans.
“In addition, a small portfolio of non-performing mortgages and credit card balances was acquired by Bank of Ireland,” said chief executive Johan Thijs.
“The deal marks a major step in KBC’s orderly and phased withdrawal from the Irish market.”
Mr Thijs said that the closing of the sale to Bank of Ireland will lead to a capital relief on the group’s balance sheet of around €1bn, which KBC aims to distribute to investors in the form of a share buyback or an extraordinary dividend.
The decision is set to be made by the board of directors in the first half of the year and will be subject to approval from the European Central Bank.
According to the results published today, the group’s Irish division recorded a €33m profit in the final quarter of 2022 as it prepares to exit the Irish market.
The results included €9m in one-off payments.
The bank also made a profit in its Belgian, Czech and international markets units in the final quarter of 2022.
Overall, net profits at KBC group came in at €2.8bn for 2022, the lender said on Thursday.
“Total income benefited from higher levels of net interest income, trading and fair value income and net other income, all of which was partly offset by lower technical insurance income, dividend income and net fee and commission income,” Mr Thijs said.
"Costs were higher, partly seasonal, and we recorded a net impairment charge on our loan book, due in part to an increase in the reserve for geopolitical and emerging risks.”
