'KBC Bank Ireland Q1 2021 performance was strong as demand for mortgage products increased.

New mortgage lending was up 54% year on year to EUR296M. The volume of lending in the first quarter is reflective of the demand among first time buyers, movers and switchers.'

'While the discussions with Bank of Ireland are ongoing, we remain fully committed to offering quality retail banking, investment and insurance services and there is no immediate impact for customers. We are fully conscious of our responsibilities to our customers and colleagues, and we will provide material updates as the process develops.'

Peter Roebben, Chief Executive, KBC Bank Ireland

Q1 2021 Financial Highlights

Net profit of EUR8 million (after tax and impairment)

New mortgage lending of EUR296M in Q1 up 54% YOY

Share of new mortgage lending market increases to 13.8% in Q1 2021

9,600 new current accounts opened, a growth of 2% YOY

Impaired loan stock reduced reduced by EUR43 million (-3%) to EUR1,390 million in Q1 21, representing c.13% of the portfolio

Capital Position at end of Q1 2021: CET 1 Capital Ratio 15.7% (transitional and fully loaded)

KBC Group ended the first quarter of 2021 with a net profit of EUR557 million.

Business Update

KBC Bank Ireland has reported a net profit of EUR8 million after tax and impairments for the first quarter of 2021. KBC Group ended the first quarter of 2021 with a net profit of EUR557 million.

KBC Bank Ireland recorded new mortgage lending of EUR296M in the first quarter of the year, up 54% compared to the same period in 2020. The Bank increased its share of new mortgage lending market to 13.8%, up 44%, year on year in Q1 2021.

Digital Innovation Continues

KBC Bank Ireland added 9,600 new current accounts in Q1 2021, an increase of 2% when compared to the same time last year and the majority of which were opened over the phone or online (83%). Contactless payments through KBC's market-leading range of digital and mobile wallets were up 31% compared to Q1 2020.

KBC Current Account customers can now open an investment fund via the KBC mobile app, 'Tap2Invest' which allows customers to invest from as little as EUR10 a month. In addition, customers can now receive instant mortgage approval in principle through a digital application and decisioning platform online at kbc.ie. KBC's digital pension continued to perform strongly in the first quarter of the year. 23% of customers have been utilising the in app functionality to increase, decrease or pause contributions.

Memorandum of Understanding with Bank of Ireland

On 16 April 2021, in the context of the competitive market conditions in Ireland, KBC Bank Ireland entered into a Memorandum of Understanding with Bank of Ireland that could lead to a transaction where Bank of Ireland commits to acquire substantially all of KBC Bank Ireland's performing loan assets and liabilities. In addition, options for divesting KBC Bank Ireland's portfolio of non-performing mortgage loans are being examined. Successful completion of both transactions may ultimately result in KBC Group's withdrawal from the Irish market. While these discussions are ongoing, KBC Bank Ireland remains committed to offering its existing and new customers retail banking and insurance services of the highest standard through its digital channels and hubs. The transaction remains subject to customary due diligence, further negotiation and agreement of final terms and binding documentation, as well as obtaining all appropriate internal and external regulatory approvals.

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