KBC Bank has said it will not be following Bank of Scotland’s lead and offering to write off debts of hard-up customers.

KBC Bank has said it will not be following Bank of Scotland’s lead and offer to write off debts of hard-up mortgage customers.

Chief executive of KBC Ireland John Reynolds told Morning Ireland that this was not a viable option but that it would work with customers who are in difficulties on a “case by case basis”.

He said: “The principle we adopt is we lend people money over a long period of time and we expect to get it back over a long period of time.”

Bank of Scotland said this week it was prepared to work with buy-to-let customers who had fallen into negative equity in exceptional circumstances.

The bank pulled out of Ireland in December but was one of the most aggressive lenders in the market in the mid 2000s when it introduced tracker mortgages to the market.

Mr Reynolds said: “It’s also important to remember the context that you’ve got a bank that followed lending policies that mean that it’s gone out of business. So I don’t think we’ll be taking their lead, one way or t’other.”

He said fewer than 10 homes had been repossessed in 2010.

Mr Reynolds was speaking as the bank increased its fixed-rate mortgage interest rate by 0.7% for new and existing customers.

He said he could not guarantee that there would not be further increases for those on variable rates.

“We are very much affected by what happens in the broader global economy. The general consensus unfortunately from our perspective that interest rates have an upward trajectory over the course of the next couple of years… We do have to pass on our funding costs.”

The bank’s five-year rate for new customers will now go up to 5.20 % - one of the highest in the market.

It will add as much as €41 a month for every €100,000 borrowed.

Its standard variable rate unchanged at 3.85pc.

Mr Reynolds said the number of non-performing loans was 6.4 per cent, compared to 4.3 per cent at the end of 2009.

“There are people encountering difficulties and we’re working with them,” he said.

The bank reported "disappointing" losses of €177m for the year 2010.