Mr. Frank Jansen:

I welcome the opportunity to address the committee. I am accompanied by my colleagues, Barry D’Arcy, executive director and chief risk officer; Darragh Lennon, director of retail distribution; and Brian Buckley, who heads our current account programme. We look forward to a constructive discussion regarding the current account closure process and related issues as KBC continues an orderly exit from the Irish market.

Since we last met with the committee in October 2022, the agreement relating to the sale to Bank of Ireland received approval from the Minister for Finance. The completion of the remaining technical steps and customer migration will mark the conclusion of the sale process to Bank of Ireland. We remain absolutely committed to managing this process responsibly over the coming period and we will work with Bank of Ireland to keep our customers and staff updated on the process and timelines.

We understand that this year is bringing significant change for KBC customers as we begin to wind down our operations in Ireland, and this includes managing and progressing the current account closure process. As this committee is aware, KBC current accounts are not part of the transaction with Bank of Ireland, which means that customers are required to move and close current accounts. We understand the critical importance of a functioning current account in people's daily financial lives, which is why we have dedicated a significant number of colleagues to ensure the process is as simple as possible.

I would like to provide this committee with an update on the current account programme. While we believe progress is being made, we understand there is work to do over the next number of months. In May last year, we estimated, based on our data, that 52,000 of the 130,000 total number of KBC current account holders would need to open a new account or move to a new provider. Based on the same analysis, we estimated that the remaining 78,000 already had an account with another provider. Today, our estimates show that the number who need to open an account or move to a new provider is already down 50% to 26,000. I can confirm that all current account customers have now received account closure notices. At the very start of the process, we focused on taking care of priority customers, including those in a vulnerable position and people over 65. They were prioritised from the outset and we can confirm that more than 90% of those accounts are now inactive.

While there is more work to be done, we have made good progress on closing current accounts and helping our customers move their daily banking to new providers.

I will give some statistics. There has been a 178% increase in current accounts with a zero balance. To date, more than 40,000 current accounts have been closed or are now blocked. We have seen a significant decline in overall activity across current accounts with debit card transactions down 61%, account balances down 50% and direct debits down 62% to 82,000. Another key indicator of declining activity is the level of social welfare payments paid into current accounts. That has decreased by 75%, with just 3,200 accounts remaining in receipt of such payments.

As we outlined to the committee last October, the first wave of current account closures, which consisted of 3,000 inactive accounts, commenced in December following a series of communications with the holders of the accounts over a six-month period. This process is ongoing and will accelerate in the coming months as notice periods begin to expire, continuing up to the third quarter of this year. We continue to work with and support customers as they move their accounts, ensuring they have all the information they need and understand the actions they are required to take and the timelines associated with those actions.

In addition to the six months’ notice of closure, we are monitoring current accounts to ensure that those with active incoming payments, direct debits, standing orders, social welfare payments or overdrafts are given additional time. These customers receive follow-up engagement from our team to support them in moving their accounts. In order to facilitate customers to the greatest extent possible, KBC Bank Ireland has put in place a process whereby accounts, prior to final closure, are blocked for a three-week period, enabling engaging customers to reopen them if really required.

As our data demonstrate, customers are taking action in moving their current accounts. As of today, all formal notices have been issued and our team will continue to do all it can to guide customers through the closure process. As I said here before, our customers are our customers until they are not.

Our 12 hubs will remain open until customers have transferred to Bank of Ireland. Visits to our hubs are down 50% since June 2022 and we understand from customer behaviour that KBC’s contact centre is their preferred choice, with over 90% of customer service queries handled through the contact centre. The average wait time for a call from a customer to be answered was 26 seconds last year and we are confident that we will be able to continue to support our customers in a timely manner as we wind down our operations in Ireland.

Following the transfer to Bank of Ireland and as part of the wind-down of our business in Ireland, we will ensure that we have the necessary staff in place to support the needs of customers, while respecting the needs of our colleagues. We have met with all our staff on an individual basis and provided guidance on their expected departure dates. In this and next year, staff will depart on a phased basis in line with the needs of the business to ensure that we continue to provide the same level of support and service to our customers as we progress through our wind-down plan. I recognise the enormous work and efforts of our colleagues in their support for customers since we announced our plan to exit the Irish market.

A successful engagement process with the employee council, which represents staff interests, culminated in that body securing a redundancy package that compares very favourably in the sector. We continue the principle of consulting and communicating with staff directly on an ongoing basis.

On the subject of TUPE and the transfer of staff to Bank of Ireland, I can confirm and said last time that the consultation with Bank of Ireland concluded in July last year. All eligible staff have been communicated with directly regarding the transfer of their role and how their employment terms and conditions have been protected. It is too early to state the final number of employees who have chosen to transfer to Bank of Ireland as they are entitled to change their decision up to the point of migration. Our estimate is that about 50 colleagues will make that choice.

I express my deep gratitude to all my KBC Bank colleagues who, over the past two years, have worked to the highest standard in providing continued support to customers during a period that is also challenging for them. My colleagues and I are happy to take any questions members might have.