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KBC has reached an agreement to sell its remaining activities in Ireland to rival Bank of Ireland. If the authorities approve the deal worth about €5 billion, KBC’s withdrawal from Ireland will be a reality, KBC spokeswoman Vivian Huybrecht confirms.
mtmSource: Belgian
The parties had already announced a preliminary agreement in April, which has now been converted into a “legally binding agreement,” according to a press release. The Bank of Ireland will receive approximately 9 billion euros in health loans from KBC Ireland, in addition to its deposit portfolio of 4.4 billion euros and a small portion of non-performing loans (about 300 million euros). The announcement does not immediately affect KBC clients in Ireland.
The transaction is subject to approval by Irish regulators and competition authorities. The latter announced earlier this week that it would scrutinize the deal “to determine whether the deal could lead to a significant reduction in competition in Ireland”.
KBC expects the sale to initially have a negative impact of €200 million due to, among other things, depreciation and provisions for restructuring costs and impairment. These will be booked in the third quarter. But after completion, it is expected to have a positive impact of €200 million.
KBC announced in April that it wanted to withdraw from Ireland after more than 40 years. In August, it was announced that almost the entire loan portfolio would be sold out with repayment problems.
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