Ireland a level playing pitch for foreign banks, says KBC

THE CHIEF executive of Belgian-owned KBC Bank Ireland has said he disagrees with the view of Rabobank, owner of Irish lender ACCBank, that foreign banks can no longer compete in Ireland.

John Reynolds said KBC had been trading in Ireland for 30 years, endured previous recessions, and would continue to operate and make profits in Ireland. He said that he didn’t understand Rabobank’s view. “That is not our experience,” he said.

Rabobank said at its half-year results presentation on Wednesday that Government supports for the banks such as the creation of the Nama “bad bank” plan was “not available to non-Irish banks” so foreign institutions “have to take care of themselves”.

The bank’s chief financial officer, Bert Bruggink, said there was “little hope that the Irish economy will recover in the near future” given Ireland’s medium-term economic prospects. “It is not really possible for non-Irish banks to compete on that market any more,” he said.

Rabobank plans to reduce its Irish operations gradually but has not said it will exit Ireland fully.

Mr Reynolds said that while KBC (formerly IIB) did not plan to participate in Nama, the bank would work with the agency if some of its developer customers have other loans moving into it.

The bank has development loans of €600 million.

“Do I see the business of Nama making our business in Ireland untenable? No,” said Mr Reynolds.

Mr Reynolds said that the Government did not introduce the bank guarantee scheme or Nama plan to put foreign banks at a disadvantage consciously and that the State permitted non-Irish banks to apply in both cases.

“We don’t perceive that as the establishment of an uneven playing field in any deliberate fashion,” he said.

Mr Reynolds said that governments around the world have had to introduce support measures such as guarantees and state investments to protect their own indigenous banks, and that Ireland was no different to other states.

He said that KBC always had access and dialogue with the Government and State agencies.