KBC BANK SEES LOSS OF €177M FOR 2010 - KBC Bank Ireland has published its results for 2010 this morning. As expected, they reflect the Belgian bank's significant exposure to the Irish property market. The bank made a loss here of €177m in 2010, while its loan impairment costs rose to €525m. The bank says that the Irish economy deteriorated much further last year than it had been expecting.
The chief executive of KBC Bank Ireland, John Reynolds, says the bank is successfully managing its loan book and says that he is moderately optimistic that 2011 will not be as difficult as 2010. He says the loss of €177m is disappointing for the bank but adds that it has come through the last three years of the economic slowdown without the need for any capital injections and has entered 2011 in 'decent shape'. He says that the level of mortgage customers in arrears stand at 6.4%, up from a figure fo 4.4% in 2009. He says the bank is actively working with customers who are finding themselves in financial difficulties and KBC has seen some limited stabilisation in the level of arrears in the second half of 2010. He says the bank repossessed less than ten houses last year.
Mr Reynolds says that KBC Bank Ireland will not be following the route of Bank of Scotland (Ireland) who yesterday announced that it has begun to restructure debts owed by buy-to-let borrowers in Ireland in exceptional circumstances. He says that KBC lends money over a long period of time and expects to get that money back over a long period of time. He says that a full range of options are available to customers to have fallen into arrears on their mortgages and and packages are tailored to their individual needs.
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MORNING BRIEFS - National Irish Bank has reported a pre-tax loss of €618m for 2010 - as it set aside €667m for loan impairment charges. The bank, owned by the Danske Bank Group, said that its pre-tax profits rose by 36% to €865m, while operating profits - before impairment charges - rose by 16% to €49m. NIB said the quality of its €3.5 billion mortgage book remained 'relatively strong' with less than 300 customers in arrears. It also said it had no plans to follow other lenders in increasing its variable mortgage rates.
*** Causing much speculation on the business pages this morning is the story of Bundesbank president Axel Weber and his apparent decision not to run for president of the European Central Bank when the job comes around next year. It had been widely presumed that Mr Weber - a fierce opponent of the ECB's emergency bond purchasing programme - would likely replace Jean-Claude Trichet - should he put himself forward. He was also known to have had difficulty stomaching the large amounts of ECB liquidity that have been extended to Irish banks in exchange for questionable collateral.
*** Guinness owner Diageo has fallen short of forecasts with reported a 9% increase in half-year earnings this morning. The spirits group said the improved performance was down to a recovery in developing markets and increased demand in North America.
*** On the currency markets, the euro is trading at $1.3680 and just over 85 pence sterling.
