KBC Bank Ireland has reported a net loss of €298m loss for 2021 after paying some heavy one-off charges ahead of its planned exit from the Irish market later this year.
The Belgian bank's Irish arm took a €183m impairment charge against its €10bn loan book after agreeing to sell the majority of its portfolio to Bank of Ireland and €1.1bn worth of non-performing loans to CarVel Investors.
Operating expenses at the lender rose by €85m to €313m, mainly due to staff restructuring costs, with significant redundancies expected among its workforce of 1,300 despite protections being agreed with Bank of Ireland to allow staff to move over with the asset sale. KBC said in November that it had already eaten €81m in such costs.
The bank also booked a €55m tax charge, cancelling out tax benefit accrued from losses made during the financial crisis, and set aside an additional €18m for the tracker mortgage review.
The Competition and Consumer Protection Commission is expected to announce the outcome of its investigation into the Bank of Ireland's planned purchase of €8.8bn in performing loans from KBC in March or April, and the deal will likely go through in the second half of 2022.
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While KBC Bank Ireland reported a net loss of €37m for the fourth quarter, the Brussels-based KBC Group reported a profit after tax of €663m for the year-ending three-month period, up from €538m the same time last year, from income of €2.6bn
"Costs, excluding bank taxes, increased by 3% compared to the previous quarter and by 10% compared to the year-earlier quarter. In both cases, this was mainly due to higher staff expenses in most countries and one-off costs in Ireland due to the pending sale transactions there," KBC Group said in its accounts.
"Income taxes were down by 47% quarter-on-quarter, due in part to the derecognition of deferred tax assets consequent on the pending sale transactions in Ireland in the previous quarter."
KBC has forecast income of €8.2bn for 2022, including the €200m profit it expects to make from the sale of its performing loans to Bank of Ireland.
