THE IRISH business of Belgian financial services group KBC saw a sharp decline in the level of loan impairments recorded in the second quarter of 2010, and expects to remain profitable over the full year.
KBC Bank Ireland charged €28 million in loan impairments in the second quarter of the year, compared to €142 million in the previous quarter.
Almost 23 per cent of KBC’s Irish loan book is now classified as high risk (14.8 per cent) or non-performing (7.7 per cent). The level of non-performing loans rose slightly from the first quarter due to a continued increase in arrears, primarily among residential customers. “This reflects the . . . lag in employment, income and GDP recovery following initial signs of the Irish economy emerging from recession,” KBC said.
John Reynolds, chief executive of KBC Bank Ireland, said it is interested in doing more business in the business and home loans sector. However, there is “very little demand” in these areas, and so the bank is lending less than it would like, Mr Reynolds said.
The trends seen in the bank’s loan book in the second quarter were anticipated, he said. He expected 2010 to be the worst year for the business. “We would like to think in 2011 we will start to see, first of all a period of stability, and then a period of improvement.”
Overall the KBC group, which has received € 7 billion in state aid, beat expectations in the second quarter.
