KBC Bank Ireland looks set to leave the Irish market after announcing talks with Bank of Ireland.
KBC Bank Ireland has entered into a Memorandum of Understanding (MoU) with Bank of Ireland, which could lead to "a transaction whereby Bank of Ireland commits to acquire substantially all of KBC Bank Ireland's performing loan assets and liabilities".
In a joint statement the banks said: "The transaction remains subject to customary due diligence, further negotiation and agreement of final terms and binding documentation, as well as obtaining all appropriate internal and external regulatory approvals."
KBC Bank said its remaining non-performing mortgage loan portfolio, which is not part of the MoU, is currently being analysed whereby KBC Group is reviewing its options to divest the NPL portfolio.
Finance Minister Paschal Donohoe described the decision taken by KBC Bank Ireland as “regrettable”, particularly as it comes so soon after NatWest’s decision to withdraw Ulster Bank Ireland DAC from the Irish banking sector.
KBC first entered the Irish market in 1978 through the majority acquisition of Irish Intercontinental Bank.
Mr Donohoe said:
“The news that discussions have commenced with Bank of Ireland regarding substantially all of the performing loan assets and liabilities is welcome. It is my hope that these negotiations are concluded quickly and prioritise the continuation of financial services for these customers and the preservation of jobs.
“Neither the Government nor I have any role in decisions such as these which are a matter for the relevant banks and their independent boards.
“Robust consumer protections are in place in the event of a bank withdrawing from the Irish market, including the Central Bank’s Codes of Conduct and that the terms of any contract currently in place with KBC remains in place into the future.”