Sinn Féin spokesperson on Finance Pearse Doherty TD has described today’s announcement by KBC Bank that it has entered into a ‘Memorandum of Understanding’ with Bank of Ireland, leading ultimately to its withdrawal from the Irish market, as another blow to the Irish banking sector.

The Donegal TD has called on Bank of Ireland to clarify if it instigated this development, and for any transaction to protect the jobs of KBC staff and the well-being of KBC customers and borrowers.

Speaking this morning, Teachta Doherty said:

“The announcement by KBC that it has entered an Memorandum of Understanding with Bank of Ireland would ultimately result in its exit from the Irish market.

“Coming not even two months after Ulster Bank’s announced exit from the market, this is another blow to consumers, customers and KBC staff.

“This move would reduce competition in an already concentrated market even further, risking higher interest rates for consumers and weaker credit availability.

“Already facing the second highest mortgage interest rates in Europe, KBC’s exit would further consolidate a virtual duopoly between AIB and Bank of Ireland that does nothing to further the interests of consumers.

“Clarity is now needed as to whether this move was a KBC initiative or the result of an offer made by Bank of Ireland.

“Given its impact on KBC staff, customers and the market more broadly, this would be highly inappropriate, and requires immediate clarification from Bank of Ireland and its largest shareholder, the Minister for Finance.

“I am alarmed to learn that KBC’s non-performing loan portfolio is not part of its MoU with Bank of Ireland, risking these loans being sold to vulture funds.

“Many of these loans may have become non-performing as a result of the pandemic’s impact on the borrowers, through no fault of their own.

“Any move by Bank of Ireland to acquire KBC’s loan book should include its non-performing loans, to provide certainty and security for those borrowers.

“The manner in which this development has been communicated to KBC staff has been disgraceful and unacceptable, with no warning or consultation.

“Indeed the CEO of KBC provided assurances in February that the bank had no plans to leave the Irish market.

“Staff will be starting their day facing an uncertain future.

“Any Transfer of Undertakings between KBC and Bank of Ireland should therefore secure the jobs of as many members of staff as possible.

“Staff have a right to immediate clarity on their positions.

“Finally, Sinn Féin have been vocal in calling for the establishment of a ‘Future of Banking Forum’, involving all stakeholders to discuss the state of the Irish banking sector and chart a path forward.

“Today’s announcement only intensifies the need for this forum to be established at the earliest opportunity.”