KBC Bank Ireland has reported a net loss of €48m, after tax and impairment, for the year to the end of December on the back of the exceptional impairment loss booked in the first half of the year due to the impact of Covid-19.

This compares to net profits of €32.3m after tax and impairments for 2019, which in turn was down from €162m a year earlier.

The bank said it had granted a total of 6,843 payment breaks on mortgages and loans for personal and SME customers. At the end of the year, 94% of these had rolled off the payment breaks it added.

KBC Bank Ireland CEO, Peter Roebben, described these figures as "very encouraging," as they had initially expected to have to provide breaks to around 10,000 customers.

"There is a very limited inflow of additional customers in arrears over the last quarter, not more than you would have I would say in a normal year," he told RTÉ News.

As a result the bank has been able to release €4m of the €95m in impairment charges it set aside at the beginning of the pandemic.

This, Mr Roebben said, was because the general economic predictions and forecasts it had made had not proven as negative as the bank had expected when it made the provision in the second quarter of last year.

"When you start making those adjustments it is clear that the buffer is sufficiently conservative, so actually fine tuning that a little bit downwards is justified," he said.

The bank also reported a "resilient" year for mortgage lending with new mortgage lending of €1.05 billion for 2020.

New mortgage lending came to €386m in the fourth quarter, up 30% on a quarterly basis and the strongest quarter on record since the start of the retail bank here in 2013. Its share of the mortgage market increased to 12.6% during 2020.

Mr Roebben indicated there were no plans to reduce mortgage interest rates, but added that the situation is under constant review.

He said the bank had adjusted mortgage prices at the beginning of last year and that offer had proven well positioned and very competitive, with a broad range of options for customers

It said its impaired loan stock reduced by €223m (13%) to €1.433 billion, which represented about 14% of its total loan portfolio.

The lender opened 34,000 new current accounts during the year, up 16% compared to 2019. It noted that 77% of these accounts were opened over the phone or online. 

KBC Bank Ireland also noted a significant rise in the use of digital wallets as a result of the pandemic, up 57% year on year compared to 2019.  

Asked whether KBC would be interested in buying parts of Ulster Bank's business, should it decide to exit the Irish market, Mr Roebben said he didn't want to speculate on what was a speculative question.

"Really our focus is on what we know and what is at hand and what we know and is at hand is an opportunity to grow our business," he said.

"It is good for customers to have choice and I think that is what we should focus on."

"There is always rumour and speculation. If something really happens of course we will always take stock and note and that is all I can say about that really."

Probed about whether KBC had hired advisors in relation to Ulster Bank and whether it has had contact with it or its parent NatWest, Mr Roebben said: "We’re focused on running our day-to-day business so we’re not in any formal process whatsoever."

On the question of whether KBC is considering imposing negative rates on retail deposits, Mr Roebben said at this point in time it is not.

"We’ll see how in the future how the negative interest rates play out, how long the situation continues to last," he said.

The bank boss also said its strategy of maintaining a small number of hubs or branches for staff to meet customers had not changed as a result of the move to digital banking caused by the pandemic.

In September, the Central Bank fined KBC Bank Ireland more than €18.3m and reprimanded it over its role in the tracker mortgage controversy following an investigation into its conduct. 

The regulator said the Belgian owned bank had been responsible for "serious failings" that affected the holders of 3,741 customer accounts between June 2008 and October 2019.