(Adds background, financial impact of deal)
DUBLIN, Oct 22 (Reuters) - Bank of Ireland on
Friday agreed to buy "substantially all" of KBC's Irish
performing assets for 5 billion euros as the Belgian financial
group confirmed it would become the latest lender to leave the
shrinking Irish market.
The two banks announced they were in talks about the deal in
April, just weeks after NatWest began winding down its
Ulster Bank business in the Irish Republic. The departures leave
Ireland with just three retail banks.
Bank of Ireland, the country's largest bank by assets with a
loan book of 77 billion euros, said it would acquire 8.8 billion
euros of performing mortgages, 100 million euros of performing
commercial and consumer loans and 4.4 billion euros of deposits.
A portfolio of around 300 million euros of non-performing
mortgages would also be acquired as part of the transaction, the
joint statement from the two banks said.
"Today's agreement with Bank of Ireland Group regarding the
sale ... of substantially all of the performing loan assets and
deposits of KBC Bank Ireland ... represents an important step in
KBC Group's withdrawal from the Irish market," KBC Group Chief
Executive Johan Thijs said in a statement.
The transaction remains subject to regulatory approvals.
Exits by KBC and NatWest look set to further strengthen Bank
of Ireland and main rival Allied Irish Banks' grip on
their home market. AIB bought 4.2 billion euros of corporate and
commercial loans from NatWest and is in talks to add some
mortgage loans.
The smaller permanent TSB has also taken advantage, buying
25 of Ulster Bank's 88 branches and 7.6 billion euros of the
former number three lender's gross performing loans.
Bank of Ireland said it was acquiring the performing
mortgages for 103.6% of par value and that it expected
incremental net interest income of around 160 million euros in
2023 as a result of the deal.
The exact size of the portfolio and consideration payable
could vary between now and completion based on normal business
flows, but is not expected to be materially different, the
statement said.
(Reporting by Conor Humphries and Padraic Halpin; Editing by
Edmund Blair and David Evans)
Natwest (NWG)
