[ad_1]
The KBC Group sees house prices in the Republic drop 12 percent this year, as the economy faces the coronavirus crisis, the Belgian banking giant said Thursday that it reported that its Irish managed to remain profitable in the first quarter.
The figure is described as a “base case” in a presentation prepared by KBC Group for analysts, as it seeks to identify possible bad loan losses in its markets.
It would be the first decline in Irish residential values since 2012.
Housing prices are expected to rise 8 percent next year, according to KBC Group slides. However, a pessimistic scenario could see home valuations drop 20 percent this year and an additional 5 percent in 2021, he said.
“Irish housing prices and transactions increased at a modest rate in early 2020. However, housing market activity is likely to remain weak until signs of broader economic change emerge,” he said.
Internal business
Problematic loans
The broader KBC Group took on a specific loan charge of € 43 million related to the coronavirus pandemic, based on its views on which sectors will be most affected, and predicts that the full-year related deterioration will reach € 1, 1 billion.
The Irish division’s percentage of impaired and risky loans fell to 15.7 percent in the first quarter from 22.7 percent the previous year. KBC applies the strictest classification of a problem loan on the Irish market, making its figures difficult to compare with other lenders.
“While the Irish economy started 2020 with substantial positive momentum, the Covid-19 pandemic is likely to have a major negative impact on activity reflecting the effects of a significant health-related shutdown on domestic demand, as well as weaker export markets, “KBC said.
“Like other countries, the Irish labor market has had a major impact as a result of the pandemic. While government measures have supported earnings and have tried to maintain workers’ ties to the affected companies, unemployment could end the year at around twice the 5 percent rate seen in early 2020. ”
Pensions
Meanwhile, KBC Bank Ireland announced that it plans to launch a phased pension and life insurance offering from a new local branch of its Belgian insurance unit. KBC had signaled earlier this year that it planned to end a long-term partnership with Irish Life in 2021.
The group operates a bancassurance model in all of its other major markets and had been searching for insurance options since it reaffirmed its commitment to Ireland in 2017 after a strategic review.
.
[ad_2]