KBC Bank Ireland has reported a 'disappointing' loss of €177m after tax and bad debt charges for the year to the end of December.
The bank said that its loan impairment charges rose to €525m as the deterioration in the Irish economy went deeper than the bank had previously anticipated. The bank had reported loan losses of €176m in 2009.
KBC said its overall loan portfolio stood at €17.2 billion by the end of the year compared to €18 billion in 2009, reflecting 'very limited demand'.
The bank, owned by the Belgian bank KBC, said that residential loans amounted to €13.1 billion by the end of 2010, representing almost 10% of the Irish market.
The bank said the composition of its loan portfolio, with its relatively low exposure to the 'particularly troubled real estate property development market', allowed it to remain self sufficient in capital during 2010 as was the case in the previous two years.
The chief executive of KBC Bank Ireland, John Reynolds, said the bank anticipates that 2011 will be another tough year for it and its customers. 'We are committed to working with those customers in difficulties. We also wish to do more business with viable borrowers and to provide a first class service to all our customers,' he added.
'We remain optimistic in the medium term about the country's capacity to recover positive momentum,' he added.
Earlier this week, the bank said it was increasing the interest charged on its fixed-rate mortgages by up to 0.7 percentage points for new and existing customers. The move will see its five-year rate for new customers go up to 5.2%.
Existing customers who want to fix for five years will now be charged 5.5%, up from 5.2%.
