KBC Bank Ireland sold loan portfolio to private equity giant for € 1.1bn

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KBC Bank Ireland sold a portfolio of remaining non-performing mortgages in a € 1.1 billion deal to funds managed by American private equity giant CarVal.

Loans will be processed upon completion of the transaction Pepper Finance Corporation. KBC said consumers will continue to enjoy the same legal and regulatory protections they currently have after the sale.

The bank said there would be no immediate changes to the customers affected by the transaction that need to be contacted prior to the completion of the transaction.

The portfolio consists of a home mortgage loan as well as a small number of non-mortgage loans.

KBC Group Executive Director Johan Teeges said the sale allows the bank to “clear the legacy and further reduce the NPL ratio.”

The portfolio sold represents “virtually all” of the remaining NPL portfolio, KBC Bank Ireland reported.

The bank, which entered the Irish market in 1978 with the acquisition of the Irish Intercontinental Bank (IIB), was forced to invest € 1.4 billion in the unit during the financial crisis to keep it afloat as loan losses rose. He managed to recover only a little over 400 million euros from the bailout funds.

At the end of the first half of 2021, KBC Bank Ireland’s NPL portfolio accounted for 12.8% of its total loan portfolio, down 6% in the first half to € 1.34 billion.

KBC Bank Ireland returned to profit in the first half of the year, despite the Belgian lender pushing forward its plans to exit the republic.

Earlier this month, the bank announced a net profit of € 21 million for the first six months of 2021 as loan impairment costs plunged to zero. KBC Bank Ireland suffered a € 58 million loss in the same period last year due to a write-off of a € 95 million loan that the bank took on in preparation for a spike in bad loans from Covid-19. until they materialized.

In April, the company announced that it was negotiating the sale of its € 9 billion active loan portfolio, almost entirely in mortgages. Bank of Ireland

“I am confident that the agreement we signed to sell virtually the entire remaining portfolio of non-performing mortgage loans, and with Pepper, the post-loan manager, offers a good and sustainable solution for our non-performing mortgage clients. This was announced by the executive director of KBC Bank Ireland Ales Blazek.

“We can ensure that all clients whose loans are included in the transaction will continue to receive the same legal and regulatory protections. Pepper is a well-known player in the Irish market. Affected customers will be contacted shortly about specific steps involved, ”he added.

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