Bank of Ireland has been cleared to acquire €9 billion worth of loans from KBC Bank Ireland by the competition watchdog, subject to certain conditions being met. This decision marks another step towards KBC’s exit of the Irish market.
The agreement is subject to a number of binding conditions, including making €1 billion of funding available to non-bank lenders in the Irish mortgage market through the purchasing of securities issued by them. It must also provide €1 million in funding to companies involved in developing innovations relevant to the mortgage markets, and honour certain rates and discounts currently available to KBC customers, as well as offering variable rates equivalent to that of KBC migrated variable rate customers, as well as fixed rate options, to KBC mortgage customers on fixed rates on their first roll-over post-migration.
After carrying out an in-depth assessment of the Bank of Ireland transaction, the Competition and Consumer Protection Commission (CCPC) said the acquisition of the loan portfolio would not substantially lessen competition in Ireland.
Under the deal, Bank of Ireland will acquire almost €9 billion of KBC’s performing loan assets and a small number of non-performing mortgages. It is also taking on €4.4 billion in deposits. However, KBC’s current account customers will have to make alternative banking arrangements.
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