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Sam Boal

KBC Bank pushed into €41 million loss for 2020 despite positive third quarter figures

However, the Belgian-owned bank saw a ‘record number’ of mortgage applications in the third quarter.

KBC BANK HAS lost €41 million in 2020 so far, despite a pick-up in new lending, mortgage drawdowns and applications in the third quarter of the year.

The loss is mostly driven by the bank’s decision to write down the value of its loan book by €95 million in anticipation of a potential pandemic-linked surge in bad loans, the Belgian-owned bank said in its third-quarter trading update.

The bank also took a €4 million charge as a result of an €18.3 million fine it received from the Central Bank in September over its role in the tracker mortgage scandal.

Like its competitors, KBC’s fortunes improved in the third quarter of the year as large parts of the economy reopened.

Mortgage applications jumped 63% quarter-on-quarter while drawdowns were up 67% from the second quarter of the year.

The bank reported new lending of €297 million on foot of what it described as “a record number of applications”.

Mortgage completions remained down 16% for the first nine months of 2020, at €677 million. This compared favourably with 20% decline observed across the broader Irish market.

“Despite the difficult economic environment, KBC Bank Ireland has continued to deliver a strong performance, particularly around new mortgage lending which saw sustained growth across the quarter,” said Peter Roebben, the bank’s chief executive.

“The volume of new mortgage applications in Q3 were some of the strongest results since the launch of the retail bank and Q3 mortgage applications are up 66% quarter on quarter, reflecting the value and choice we are offering people.”

Tracker mortgages

KBC, the smallest of the five retail banks operating in Ireland, also took a €4m charge in the third quarter due to Central Bank sanctions over its role in the Tracker Mortgage scandal.

A Central Bank investigation found that in 2008 — when tracker mortgages were becoming less profitable for the Belgian-owned bank against the backdrop of the financial crisis — KBC began to withdraw its tracker products.

In the process, the Central Bank said that KBC failed to adequately warn customers who were moved from trackers to fixed-rate mortgages that they would be unable to return to their tracker rates.

KBC was also criticised for its “deeply unsatisfactory” engagement with the Central Bank’s investigation.

The regulator described the impact of KBC’s failings on its customers as “devastating and included significant overcharging and the loss of 66 properties” — including 11 family homes. 

Central Bank investigations into Bank of Ireland, AIB and Ulster Bank are yet to be completed. 

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    Mute Jimmyjoe Wallace
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    Jan 2nd 2017, 9:31 PM

    I’ve been loving you a long time Down all the years, down all the days And I’ve cried for all your troubles Smiled at your funny little ways We watched our friends grow up together And we saw them as they fell Some of them fell into Heaven Some of them fell into Hell

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    Mute Padraig Piarais Mac AnTsaoir
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    Jan 2nd 2017, 10:07 PM

    @Jimmyjoe Wallace: Why would anyone redthumb that, some of the greatest lyrics of this or any other century.

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    Mute Jimmyjoe Wallace
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    Jan 2nd 2017, 10:09 PM

    It sure is Padraig, and I thought is was apt under the circumstances.

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    Mute Brown Boots
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    Jan 2nd 2017, 11:04 PM

    Well played Jimmy… And a sad loss. Hope to see Shane back in action soon

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    Mute Dave O Keeffe
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    Jan 3rd 2017, 4:28 AM

    Are the lyrics from this century though?

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    Mute Mary Murphy
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    Jan 2nd 2017, 9:08 PM

    Shane bless you in the day ahead. Your Mam is now your wing person. So sorry for you loss

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    Mute FlopFlipU
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    Jan 2nd 2017, 8:51 PM

    RIP not a great start to the year

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    Mute winston smith
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    Jan 2nd 2017, 10:11 PM

    From the newspaper photo he is the image of his mother. Sad time.

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    Mute Derek Hughes
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    Jan 3rd 2017, 1:44 AM

    Shane has given a lot of joy and happiness to me and untold numbers of others through his music and talent. He is his mother’s son. May God comfort him at this difficult time. Shane may you be blessed and comforted secure in the knowledge, that our support is a drop in the ocean when compared with the gifts you and your Mum have shared with us. May she Rest In Peace.

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    Mute Jamie McCormack
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    Jan 3rd 2017, 1:02 AM

    Awful tragedy. The headlines splashed across the tabloids today were nothing short of disgusting.

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    Mute Linda Hughes
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    Jan 3rd 2017, 1:29 AM

    So sad Rip x

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