KBC exiting Ireland

howiya

sebdavis wrote: »

None of the parties have tried, it seems every election the plan is to run on a campaign of “more freebies”

Personally I would prefer a better plan not based on taking every penny from people working. Proper financial planning for the country

I'd be interested in hearing more details of your better plan.

Specifically how would enforcing more evictions result in BOI reducing their mortgage rates.

sebdavis

howiya wrote: »

I'd be interested in hearing more details of your better plan.

Specifically how would enforcing more evictions result in BOI reducing their mortgage rates.

When did I say I knew how to force BOI to reduce their rates?

howiya

sebdavis wrote: »

When did I say I knew how to force BOI to reduce their rates?

What is it you want the politicians to change then?

Apologies if I misread you but I thought you were of the opinion that politicians should change something so that banks will reduce their mortgage rates.

sebdavis

howiya wrote: »

What is it you want the politicians to change then?

Apologies if I misread you but I thought you were of the opinion that politicians should change something so that banks will reduce their mortgage rates.

BOI are a company, they are entitled to charge what they want. I personally do no banking with BOI and if KBC sells to BOI I will review then

What needs to change is the entire system, BoI can’t change that, the ability for people to take out mortgages they can never afford safe in the knowledge they can hang around for years not paying the mortgage.

It was posted earlier in the thread in terms of what other countries have in place, even NI has a better system. So implement that, that should encourage more banks and hopefully reduce rates

If BOI at that stage can still charge higher rates, that’s great for them as a company

howiya

sebdavis wrote: »

BOI are a company, they are entitled to charge what they want. I personally do no banking with BOI and if KBC sells to BOI I will review then

What needs to change is the entire system, BoI can’t change that, the ability for people to take out mortgages they can never afford safe in the knowledge they can hang around for years not paying the mortgage.

It was posted earlier in the thread in terms of what other countries have in place, even NI has a better system. So implement that, that should encourage more banks and hopefully reduce rates

If BOI at that stage can still charge higher rates, that’s great for them as a company

That's more or less what I thought your opinion was. As you say BOI can charge what they want. So there's no votes in implementing change.

Pascal or whoever can't run an election saying we're going to enforce evictions for those who won't pay and those who do pay will see lower mortgage rates. Status quo continues.

thomas 123

Jinglejangle69 wrote: »

When you have the Bríd Smyths and Paul Murphys of the world on the radio everyday pushing a narrative then this is the result.

Eoin O Broin and Richard Boyd Barrett.

This country really is weak.

Way to blame... amazing that you managed to blame 4 people who have not been in a position to touch any legislation(aside from the odd committee or dail vote) leading to the economic conditions that made it a tenable business decision for KBC to end its operations in Ireland.

sebdavis

howiya wrote: »

That's more or less what I thought your opinion was. As you say BOI can charge what they want. So there's no votes in implementing change.

Pascal or whoever can't run an election saying we're going to enforce evictions for those who won't pay and those who do pay will see lower mortgage rates. Status quo continues.

Sorry I am confused. One minute you are talking about BOI and the next you are talking about government policy.

They are completely different. A political party running a campaign based on increasing competition in the market so reduced rates should be available is completely different to a political party running a campaign saying they are going to tell BOI & other banks in Ireland they have to reduce it rates

howiya

sebdavis wrote: »

Sorry I am confused. One minute you are talking about BOI and the next you are talking about government policy.

They are completely different. A political party running a campaign based on increasing competition in the market so reduced rates should be available is completely different to a political party running a campaign saying they are going to tell BOI & other banks in Ireland they have to reduce it rates

The point is that the political party can't actually increase competition in the market. The same way they can't tell a bank to reduce its mortgage rates. Its not in their gift.

Varik

howiya wrote: »

That's more or less what I thought your opinion was. As you say BOI can charge what they want. So there's no votes in implementing change.

Pascal or whoever can't run an election saying we're going to enforce evictions for those who won't pay and those who do pay will see lower mortgage rates. Status quo continues.

Irish mortgage rates are high (avg 2.71 vs EU avg of 1,35), by any normal standard we'd have EU banks fighting tooth and nail to get a piece of that but we don't they're just trying to get out.

If repossession were simpler, we'd have more entrants into the market to get at those higher rates and eventually competition would drive them down.

Right now risk is high, costs are high, and those are driving competition out.

feelings

Can the banks in that market call in loans and mortgages without a drawn out legal battle that can go on for years?

McGiver wrote: »

Very bad. There's literally no competition here. There's gonna be rip-off again, fees etc. Three banks....

I'm from a larger market, albeit only twice as large, and we've got 20 commercial banks minimum. They all offer free current accounts. The shift happened 10-12 years ago when a new player entered the market, disrupted it, people started pushing for free accounts voting with their feet, it was all over the media and the other banks just had to adapt. Fast forward, it's absolutely unacceptable for any bank charging fees for current accounts now, and anyone trying so would be laughed at.

Just a story of why competition is good.

sebdavis

howiya wrote: »

The point is that the political party can't actually increase competition in the market. The same way they can't tell a bank to reduce its mortgage rates. Its not in their gift.

You currently have one political party which is in opposition running on a campaign to change the laws to make it more difficult for banks to remove non paying people

A political party can increase competition in a market place, of course they can, they can make that market place attractive to companies

As pointed out loads of times on this thread this is not the current Irish market....maybe read the thread

Infini

JTMan wrote: »

Sunday Times have said that KBC's exit will probably be complete much quicker than Ulster's exit. It will not be a case of "years" but rather "months" ...

I'll wait and see what happens first but if it comes down to it I'll likely just reopen an account with N26 unless the transfer to BoI means I keep my existing free banking terms and conditions. All wait and see if course but if BoI want my buisness the have to offer to maintain the same T&C's I signed up to with KBC and the free current account is a make or break condition.

sebdavis

If KBC is closing quicker I’m sure the remaining companies in ireland will provide offers to the more attractive loans with KBC.....avant as mentioned have started up and they will be rubbing hands to grab this business

antix80

Given the messing getting money off ppl who don't pay, are we really surprised?
Same for landlords. Toxic market.

tastyt

Are BOI taking on the staff too or is this a story of 1400 people losing their jobs aswell?

sebdavis

tastyt wrote: »

Are BOI taking on the staff too or is this a story of 1400 people losing their jobs aswell?

I would expect the majority will lose their jobs

howiya

Varik wrote: »

Irish mortgage rates are high (avg 2.71 vs EU avg of 1,35), by any normal standard we'd have EU banks fighting tooth and nail to get a piece of that but we don't they're just trying to get out.

If repossession were simpler, we'd have more entrants into the market to get at those higher rates and eventually competition would drive them down.

Right now risk is high, costs are high, and those are driving competition out.

There are high barriers to entry that are based on the past sins of our dominant market participants, amongst others. That in itself discourages competition.

Too many people are falling for the if only we could evict people line.

And KBC, the retail bank with the highest percentage of non performing loans are the bank with the lowest mortgage rate in the market, having taken into account the risks you've mentioned. It doesn't add up.

AngeloArgue

sebdavis wrote: »

If KBC is closing quicker I’m sure the remaining companies in ireland will provide offers to the more attractive loans with KBC.....avant as mentioned have started up and they will be rubbing hands to grab this business

Avant which is the Irish operation of Spains 'Bankinter' are relatively new to the Irish market. It should be noted that they provide loan and credit business only, they don't handle current or deposit accounts and don't have a branch network.

So they are already a slimmed down operation that does loans exclusively. So if they have confidence in the Irish loan, business and property markets how is it that the other European players don't?

If Irish loan market was considered toxic from Non-performance, Moral hazard and expensive asset recovery. Then why are Bankinter getting involved? Is it that they are just behind the curve with the other banks or is there something else at play?

Bob24

AngeloArgue wrote: »

Avant which is the Irish operation of Spains 'Bankinter' are relatively new to the Irish market. It should be noted that they provide loan and credit business only, they don't handle current or deposit accounts and don't have a branch network.

So they are already a slimmed down operation that does loans exclusively. So if they have confidence in the Irish loan, business and property markets how is it that the other European players don't?

If Irish loan market was considered toxic from Non-performance, Moral hazard and expensive asset recovery. Then why are Bankinter getting involved? Is it that they are just behind the curve with the other banks or is there something else at play?

I would put it differently: once in a while we have a foreign player trying its luck with our banking/mortgage market. But it doesn't happen very ofter and usually ends up with that player exiting he market after a few years.

So the questions I would ask is: what is it about our market which makes it unsustainable for those players? Especially since the Irish market allows them to charge significantly higher rates to the consumer than their home market (i.e. they are making a killing here with the high interest rates they are charging v.s. their home market, but very few are coming and they end up leaving eventually, so there has to be an issue specific to our our market making their operations unsustainable).

Varik

Just going to repeat that back to you.

howiya wrote: »

There are high barriers to entry that are based on the past sins of our dominant market participants, amongst others. That in itself discourages competition.

high barriers to entry and yet those who are established are leaving.

howiya wrote: »

And KBC, the retail bank with the highest percentage of non performing loans are the bank with the lowest mortgage rate in the market, having taken into account the risks you've mentioned. It doesn't add up.

KBC the bank with the highest percentage of non performing loans and lowest mortgage rate in the Irish market are leaving.

Charging just short of double the EU average and that's not good enough, almost like having such a high percentage of non performing loans is a bad thing.

They can't do much about the non performing loans, and their only option is to try to balance it off with new customers right up until they decided to cut their losses.

Jim2007

Bob24 wrote: »

I
So the questions I would ask is: what is it about our market which makes it unsustainable for those players? Especially since the Irish market allows them to charge significantly higher rates to the consumer than their home market (i.e. they are making a killing here with the high interest rates they are charging v.s. their home market, but very few are coming and they end up leaving eventually, so there has to be an issue specific to our our market making their operations unsustainable).

There is nothing special about the Irish market one way or the other. The same thing happens in other markets as well. I was involved in the early stages of cross border activities in France, German and Italy at different times and they were all eventually closed down as loss makers.


Outside of their home markets banks don't seem to be able to do retail banking. Asset Management they do well, Investment Banking if they are in the top 3 in the market. But Retail Banking....


I suspect it is more to do with the typical management profile of those chosen to oversee it.

sebdavis

sebdavis wrote: »

I would expect the majority will lose their jobs

I fear for the future of this country

sebdavis

AngeloArgue wrote: »

Avant which is the Irish operation of Spains 'Bankinter' are relatively new to the Irish market. It should be noted that they provide loan and credit business only, they don't handle current or deposit accounts and don't have a branch network.

So they are already a slimmed down operation that does loans exclusively. So if they have confidence in the Irish loan, business and property markets how is it that the other European players don't?

If Irish loan market was considered toxic from Non-performance, Moral hazard and expensive asset recovery. Then why are Bankinter getting involved? Is it that they are just behind the curve with the other banks or is there something else at play?

I had a credit card off MBNA back in 2000. So they are in the market since then. Ok they changed name but I left and came back to them for a credit card, only after I joined did I figure out the link

Why they have moved into mortgages now I don't know, back when I was first with them they only done credit cards and only started loans recently

sebdavis

Deleted User wrote: »

I fear for the future of this country

Do they really have 1400 staff? I have been with them for years and everything was done via a call centre/online. Seems a lot of staff even if including back office staff.

AndrewJRenko

sebdavis wrote: »

I would expect the majority will lose their jobs

That would result in very substantial redundancy costs for BOI, and huge loss of goodwill amongst both staff and customers.

sebdavis

AndrewJRenko wrote: »

That would result in very substantial redundancy costs for BOI, and huge loss of goodwill amongst both staff and customers.

TUPE* of course is a consideration and that will be worked out between companies but do you think these people, even if transferred, will be kept in BOI? KBC might have to do a large redundancy program now before closing down

BOI let 1700 staff go last year.

*The Irish version of TUPE which I can never remember

McGiver

feelings wrote: »

Can the banks in that market call in loans and mortgages without a drawn out legal battle that can go on for years?

Yep, in fact they're on the opposite end of the spectrum, it's easy to get people indebted (by accumulating extra fees, legal fees, court fees etc) and repossession is quite easy. In fact, legislation was brought in there to balance it bit more in favour of the consumer vs lenders.

I suppose a reasonable middle ground is the best...

Bob24

Jim2007 wrote: »

Outside of their home markets banks don't seem to be able to do retail banking. Asset Management they do well, Investment Banking if they are in the top 3 in the market. But Retail Banking....

As an exemple, I believe BNP Paribas has sustained retail banking business in many countries. So does HSBC and i am sure there must be others.

Darc19

AngeloArgue wrote: »

If Irish loan market was considered toxic from Non-performance, Moral hazard and expensive asset recovery. Then why are Bankinter getting involved? Is it that they are just behind the curve with the other banks or is there something else at play?

Central Bank rules that max is 3.5 earnings has meant that current mortgages (last few years) do not have the non payment issues of previous mortgages

Avant are also very picky.

Remember in 2005 you could get 40 year mortgages with 8+ x times earnings at 100% of house value

Slutmonkey57b

AndrewJRenko wrote: »

That would result in very substantial redundancy costs for BOI, and huge loss of goodwill amongst both staff and customers.

Boi are buying the loans and accounts, not the operations. Redundancies are kbc's problem.