Belgian-owned KBC Bank Ireland opens its first high-street retail branch today as part of plans to open a further five outlets and double the number of mortgage customers over three to five years.
The branch, which is located in the former Aviva branch on Lower Baggot Street, will be followed by new retail outlets opening in Cork, Limerick, Galway this year and two other regional towns, which have yet to be decided by the bank.
John Reynolds, chief executive of KBC Bank, said the new Dublin branch would be a “test base” for what the bank would offer customers next year.
KBC has been in business in Ireland for 40 years but had largely concentrated on corporate lending before moving into the area of home loans, he said.
The bank has operated through offices in Dublin, Cork, Limerick, Galway and Belfast, selling many mortgages through brokers.
The bank didn’t operate the same large branch networks and numbers of staff which rivals were trying to reduce under heavy cost-cutting plans to make themselves profitable and self-funded again, he said.
No legacy infrastructure
“Because we don’t have any legacy infrastructure to dismantle, we can respond to the current customer needs,” he said.
Mr Reynolds said he made a pitch to his bosses in KBC in Belgium three years to grow the bank’s Irish operation into a bigger retail business to take advantage of opportunities opening up in Irish banking.
The Irish subsidiary was reclassified by KBC as a core part of the Belgian bank’s business in October, paving the way for Mr Reynolds to expand the bank into the retail business.
“There is an opportunity here for somebody and there aren’t too many people coming into Ireland, so we should take advantage of that,” he said.
KBC was planning to add another 70 staff to a 700-strong workforce, said Mr Reynolds, who is also president of the Irish Banking Federation.
He believes the bank, which has a 10 per cent share of the mortgage market, can grow to become the fourth-largest bank in the country, competing strongly against Bank of Ireland, AIB and Ulster Bank.
He wants to increase the number of mortgage customers from 125,000 to 250,000.
The bank, the fifth-biggest mortgage lender in the boom, has €13 billion worth of mortgages. Arrears of 90 days or more amounted to 16.9 per cent of KBC’s €9.4 billion of owner-occupier mortgages in September and 28 per cent of €3.2 billion of buy-to-let mortgages.
Mr Reynolds noted that a big positive for the bank was that mortgage arrears had dropped for the first time in five years during October and November, though the decline was small.
