Belgian bank KBC has said it will retain its business in Ireland and is committed to "long term investment in Ireland".
The announcement follows a review by the bank of its operations. KBC had considered exiting the Irish market as part of that process.
This morning's announcement brings relief for customers and for around 1,000 staff at KBC Bank Ireland.
Following speculation about the company's intentions, the financial services union, which represents a number of its employees, had written to the lender urging it to end the uncertainty and reaffirm its commitment to Ireland.
KBC said today it wanted to deliver sustainable growth in Ireland in what it called a "core market" for the bank in which it will continue to invest.
"As a consequence, KBC Bank Ireland will strive to achieve at least 10% market share in retail and micro SME segments and will plan to develop bank-insurance similar to other core markets of KBC Group," a statement from the bank said.
After years of heavy losses due to bad debts on its mortgage and commercial lending books, KBC recently returned to profitability in Ireland.
Figures released today show it made a net profit of €227m for 2016 after accounting for impairments on loans. This was up from €75m the previous year.
It has also opened 70,000 new customer accounts in that period.
KBC Bank Ireland says 'committed' to Ireland pic.twitter.com/R1UKtxYkDO
— RTÉ Business (@RTEbusiness) February 9, 2017
On its loan loss impairment charges, KBC Bank Ireland saw a net impairment release of €45m for 2016 compared to a net addition of €48m the year before.
The bank said today it plans to recruit additional expertise across domains like business integration, smart data, digital development and testing.
CEO of KBC Bank Ireland Wim Verbraeken said everybody at the bank had worked extremely hard to accomplish a spectacular turnaround in difficult and challenging circumstances.
"We have managed to increase our customer base and deposits by 75% and 109% respectively, in the space of four years," Wim Verbraeken stated.
Mr Verbraeken also said the bank has reached out to a "certain number" of its customers who may have been affected by overcharging issues where banks wrongly prevented people from reverting to their tracker rates after they had fixed their home loans.
Speaking on RTÉ's Morning Ireland, Mr Verbraeken declined to say how many KBC customers may have lost their homes as a result, adding that a loss of ownership is very often multi-factorial and there can be a number of items at play.
He said that KBC Bank Ireland was still working with the Central Bank on the issue.
"We are not in a position yet to come out publicly on the extent of this matter within KBC - we are still in the process of working with the Central Bank," the bank CEO said.
"We have already reached out to a certain number of customers where we have identified that we either made a mistake or failed in our contractual duties," he added.
Noonan says KBC decision is another sign of strong Irish recovery
Minister for Finance Michael Noonan has welcomed the news that KBC will be staying in Ireland and also welcomed the "helpful clarity" for staff and customers alike after a period of uncertainty.
"This is another strong sign of the recovery in Ireland and shows confidence by KBC Ireland in the Irish economy," said Mr Noonan.
"The fact that KBC is committed to remaining in Ireland ensures continuing competition in the Irish banking market which is good for consumers. Such commitment is also a mark of the robust market and of its continuing growth potential into the future," he added.
KBC Bank's Group profits beat expectations
KBC Bank Ireland's parent group posted a better than expected net profit for the final quarter of 2016, as it benefited from higher fee and commission income and strong sales of insurance products.
The group said both loans and deposits increased compared to last year.
For the group as a whole, net profit fell 20% in the fourth quarter to €685m, but was well above the €520m expected in a Reuters poll of 12 analysts.
Net profit was lower than last year because of a large exceptional item in the fourth quarter of 2015, due to the liquidation of a financial holding.
After paying an interim dividend of €1 in November, KBC said it would propose to pay out another €1.80 in May.
