Written answers

Tuesday, 23 April 2013

Department of Finance

Banking Sector Issues

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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214. To ask the Minister for Finance if he has any concerns for the future of KBC Ireland which recently reported an additional bailout by its parent of €380m for 2012 after another year’s losses and which now has €2.7 billion of Irish deposits and €14 billion of Irish loans, having grown its deposit book by 60% in 2012 with relatively high deposit interest rates. [18469/13]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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Ultimately decisions by foreign institutions to remain active in the Irish market are taken at the level of the parent entity. In the specific case of KBC Ireland, the bank is regulated by the Central Bank of Ireland as a Credit Institution in the Republic of Ireland. In addition its parent, KBC Group, is profitable and has a strong liquidity position and the Group is currently providing the necessary capital and liquidity to its Irish subsidiary. These are challenging times for the whole banking sector in Ireland, not just for the domestic banks. KBC Ireland is an important provider of credit to the Irish housing market and as the Deputy rightly points out the Bank has extended some €14 billion of credit to the Irish economy. This is a very significant investment in Ireland, predominantly in the residential mortgage market.

It should be noted that KBC Ireland anticipate that increasing economic stability will lead to more sustainable conditions in 2013 with the bank hoping for reduced credit costs in the year ahead. I welcome KBC Group’s commitment to the Irish market and note that they are planning to develop their business in Ireland further with new retail branches and distribution platforms to be rolled out in 2013 and continued expansion of their retail product portfolio. This will add welcome competition in the retail banking market in Ireland.

In the first quarter of 2013 the parent company invested €125m in its Irish subsidiary to support on-going business development. In April KBC Ireland opened a new high street retail office in Cork, which is its first new office outside of Dublin. The Cork office, I understand, will employ 28 people initially and the Bank has said they have plans to open new offices in other cities during the course of 2013. Since 2011, employment numbers at KBC Ireland have increased from 521 to 650.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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215. To ask the Minister for Finance if he will provide an assessment of the risk to the financial health and profitability of Permanent TSB as well as to the public interest, from the announced resignation of persons (details supplie) from the board of PTSB in May 2013; and if he will make a statement on the matter. [18470/13]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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As the Deputy will be aware it is a matter for the Chairman of Permanent TSB to ensure that the board of directors is of sufficient size and has an appropriate mix of expertise to comply with governance, company law and regulatory requirements. I have been informed that the current board complies with all relevant requirements but is subject to on-going review and renewal as required. As the Deputy will be aware the directors have fiduciary obligations to the company and have obligations under Section 48 of the Credit Institutions (Stabilisation) Act.

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