Bank of Ireland Group has signed off on a binding agreement with KBC Bank Ireland for the acquisition KBC’s loan book and deposits.
The deal comprises c.€8.8bn of performing mortgages, c.€100m of performing commercial and consumer loans, and c.€4.4bn of deposits.
The acquisition was initially announced last April as a Memorandum of Understanding, and was followed by a period of due diligence.
The deal was notified to the Consumer and Competition Protection Commission on 16 April 2021. Earlier this week, on October 20, the CCPC announced that it had decided to carry out a full Phase 2 investigation into the ‘proposed acquisition’, following an extended preliminary investigation.
The regulator stated: “The CCPC has determined that a full investigation is required in order to establish if the proposed transaction could lead to a substantial lessening of competition in the State. The CCPC received a number of third-party submissions during the Phase 1 investigation.”
In Association with
The CCPC is also currently reviewing Bank of Ireland’s proposed acquisition of the wealth management and capital markets divisions of Davy, which was notified on 20 August 2021.
Another banking matter in the CCPC’s in-tray is the proposed acquisition of certain assets of Ulster Bank Ireland by AIB, which was notified on 30 July 2021.
Included in the BoI/KBC purchase agreement is c.€300m of non-performing mortgages. The bank said the total consideration is c.€5.0bn across all portfolios (net of deposits), and will be funded through ‘excess cash’.
Group CEO of Bank of Ireland, Francesca McDonagh (pictured), commented: “We are delighted to have reached agreement with KBC on this important transaction. This acquisition is a positive development for our business and consistent with our growth strategy. We look forward to supporting our new customers on their important financial decisions over the years ahead.”
KBC Group CEO,Johan Thijs said: “The transaction remains subject to regulatory approvals. Yet I’m confident that together with Bank of Ireland Group our customers will be provided with a good home, whilst continuing to enjoy the same legal and regulatory protections. We remain committed to managing this process responsibly over the coming period.”
KBC Bank Ireland CEO Ales Blazek added: “I would like to reassure our customers that they do not need to take any immediate action at this point as a result of this announcement. We will communicate to our customers well in advance of any actual steps that may be taken with respect to their products or if our customers need to take any action at any point.”
Bank of Ireland was advised by Credit Suisse International and IBI Corporate Finance, with Citigroup Global Markets providing further support.
