Éamon Ó Cuív (Galway West, Fianna Fail)
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226. To ask the Minister for Finance the discussions that have taken place between him or his officials with a bank (details supplied) in relation to its planned exit from operations here; the timescale for same; if the bank has outlined its plans in relation to human resource issues or the disposal of the loan book to his Department; and if he will make a statement on the matter. [23770/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Last month, KBC confirmed that it has entered into a Memorandum of Understanding with Bank of Ireland, which could potentially lead to a transaction where Bank of Ireland acquires a substantial amount of KBC Bank Ireland’s performing loan assets and liabilities. KBC has stated that it is also reviewing its options to divest KBC Bank Ireland’s remaining non-performing mortgage loan portfolio. The execution of these two transactions would ultimately result in KBC Group’s withdrawal from the Irish market.

The Government regrets the decision made by KBC however neither the Government nor I have any role in decisions such as these, which are a matter for the relevant banks and their independent boards. The decision will have a significant impact on staff, customers and, potentially, the level of competition in retail financial services. The news that discussions have commenced with Bank of Ireland regarding it potentially acquiring substantially all of KBC’s performing loan assets and liabilities is welcome and the Government hopes negotiations are concluded quickly and prioritise the continuation of financial services for customers and the preservation of jobs. It is critical that both KBC engages with and keeps all its stakeholders, especially its staff and customers, fully informed in a timely manner as decisions are made.

Last week officials from my Department met with representatives from KBC as part of the normal engagements with the banking sector. In light of the recent announcement, KBC confirmed that work on negotiations are underway, as provided for in the Memorandum of Understanding. However, the KBC representatives outlined that they were not in a position to provide a likely timescale or discuss details of the negotiations until an agreement is reached in due course. KBC emphasised that it has had continuous engagement with staff in relation to the announcement.

Éamon Ó Cuív (Galway West, Fianna Fail)
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227. To ask the Minister for Finance if he has raised the issue with either a bank (details supplied) or the Central Bank regarding the position of mortgage holders that have a special discount on their mortgages due to the fact they also have their current account with the bank in the event of the loan book and current account operations of the bank being sold to different bidders; if the normal assurances that the terms of such mortgages would be protected in reality in such a scenario; and if he will make a statement on the matter. [23771/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank has advised that it does not comment on the commercial decisions of individual regulated entities.

Where a loan is sold or transferred to another regulated entity, it will be subject to the terms of the credit agreement and the protections that were available to borrowers prior to the transaction will also continue to be in place with the new owner. It is worth noting that under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 if a loan is transferred or sold, the holder of the legal title to the credit must be regulated and must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers whose loans are sold or transferred, maintain the same regulatory protections that they had, including under the various Central Bank statutory Codes of Conduct, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013 (CCMA).

In circumstances where a regulated entity offers an incentive to a consumer when taking out a mortgage, Provision 6.12 the Consumer Protection Code 2012 requires that the regulated entity must provide the personal consumer, on paper or on another durable medium, with the information needed to consider the incentive being offered.

This information must:

a) Quantify the implications for the personal consumer of availing of the incentive including an indicative cost comparison of the total cost of the existing mortgage or new mortgage credit if they do not avail of the incentive and the total cost of the mortgage if they avail of the incentive;

b) Clearly set out the length of time during which the incentive will be available;

c) Clearly set out any assumptions used, which must be reasonable and justifiable;

d) Set out the advantages and disadvantages to the personal consumer of availing of the incentive;

e) Include other key information which the personal consumer should have available to them when considering the incentive; and

f) Include a statement that the personal consumer may wish to seek independent advice prior to availing of the incentive.

The continued application of preferential mortgage rates is governed by the underlying terms and conditions of the mortgage contract.