The competition watchdog has cleared the sale of KBC Bank Ireland’s loan portfolio to Bank of Ireland, marking another step towards KBC’s exit from the Irish market.
But the deal is subject to a number of binding conditions, including making €1bn of funding available to non-bank lenders in the Irish mortgage market through the purchase of securities they issue; provide funding of €1 million to companies involved in the development of relevant innovations for the mortgage credit markets; and honor certain rates and discounts currently available to KBC customers, as well as offering variable rates equivalent to those of migrated KBC variable rate customers, as well as fixed rate options, to KBC fixed rate mortgage customers on their first post-migration roll-over.
After carrying out a thorough assessment of the Bank of Ireland transaction, the Competition and Consumer Protection Commission (CCPC) said that the acquisition of the loan portfolio would not significantly reduce competition in Ireland.
As part of the deal, Bank of Ireland will acquire nearly €9 billion of performing loan assets from KBC and a small number of non-performing mortgages. It also absorbs 4.4 billion euros in deposits. However, KBC current account customers will need to make other banking arrangements.
Bank of Ireland welcomed CCPC’s announcement and said it would continue to work closely with KBC to transfer customers.
“Bank of Ireland has been part of the business, economic and social fabric of Ireland for nearly 240 years, and we look forward to providing a great long-term home for KBC Bank Ireland customers,” said Francesca McDonagh, group chief executive. Bank of Ireland. “We are committed to providing a smooth and seamless migration for KBC customers, ensuring strong customer protection and financial stability within the Irish banking industry and broader economy.”
Dilosk, formerly ICS Mortgages, is one of two recipients of €500 million in funding over the next three years. The company currently manages approximately 1.4 billion euros in mortgage loans.
“This availability of funding is a positive development for the Irish mortgage market which will support ICS Mortgages’ growth and ambitions to achieve 10% market share over the next few years,” said Managing Director Fergal McGrath. “We also welcome the CCPC’s recognition of the key role that non-bank lenders such as ICS Mortgages have now and will play in the medium term in promoting competition and providing Irish consumers with an alternative choice for their needs. mortgages. »