Mr. Ale? Bla?ek:

Chairman, Deputies and Senators, as the CEO of KBC Ireland I am grateful for the opportunity to address this committee. I am accompanied today by Barry D’Arcy who is our director of risk and an executive director of KBC Ireland, KBCI. We are looking forward to a discussion and will be answering questions. I will now cover the key summary points of my opening statement shared with the committee earlier.

On 22 October 2021, KBCI confirmed that it had entered into a legally binding agreement with Bank of Ireland following the entering into a memorandum of understanding, MOU, between the two groups on 16 April 2021. This transaction remains subject to respective regulatory approvals. It is our intention to be as comprehensive as possible in answering any questions, while fully respecting the boundaries set by the ongoing approval processes. While it is our intention to withdraw from the Irish market, I wish to reiterate our strong commitment of support and responsibility towards our customers, colleagues, communities and all stakeholders within Irish society. We intend that any exit will be carried out in an orderly and responsible manner fully respecting all of the obligations we hold.

We see Ireland as a progressive, open economy that is very successful with an outward-looking society that is attractive to international investment. At the same time, the model of retail banking is evolving in Ireland and across Europe in response to how consumers want to access financial products and services. This transformation is also driven by technological changes and new forms of delivering banking and financial services. This evolution presents challenge and opportunity in equal measure for all retail banks in all markets. Included in these challenges is the ability to achieve reasonable and sustainable returns on investment. In this respect, we welcome the recent publication of the terms of reference for the retail banking review and we will contribute positively to that review.

While we believe we have been a positive force in the Irish market since 1973, the tracker mortgage issue is a hugely regrettable chapter in what we have done in Ireland. We have learned significant lessons from our mistakes. We have apologised in this forum for those wrongs we have caused our customers and I now apologise again here. At the same time, KBC Bank has gone through substantial cultural change, re-embedding responsible behaviour frameworks in its activities. Our customers remain central to every action we take and our exit from the Irish market will not be considered complete until we do right by each of them. Our mission for our customers is to support them in any action we are required to take. We will ensure customers are provided with plenty of notice of any impact or changes to their account in line with all legal and regulatory protections. Service remains our top priority.

We maintain strong lines of communication with our colleagues directly or through an employee council. We agreed on strong terms of voluntary redundancy with the employee council that reflect our deep appreciation of the service given by our employees. On the transfer of undertakings, TUPE, KBC will, of course, fully comply with its duties to provide choice to entitled employees.

We have strengthened our employee well-being programme, providing a range of support to staff to help them manage their own resilience and well-being in this time of uncertainty. We are also supporting staff in preparing them for their future careers with management programmes and career coaching workshops to discuss options available to them when transitioning into the labour market.

We will continue engage comprehensively with all stakeholders in Ireland. The board and executive committee of KBC Bank Ireland are fully conscious of their responsibilities to our customers and employees and we are committed to fulfil these responsibilities.

Thank you for hearing our perspective and we are now happy to answer any questions.