No Ulster Bank link for KBC, says chief
The head of KBC Bank in Brussels told investors that a merger of its Irish unit with a rival is not on the cards.
However, a sale of KBC Ireland could happen after the unit returns to profit, targeted for 2016.
The comments will be seen as a blow to Royal Bank of Scotland's hopes of engineering a tie-up between its Ulster Bank unit in Ireland and a potential partner – possibly KBC or Permanent TSB – to create a so called "challenger" to Allied Irish Banks and Bank of Ireland.
There has also been speculation that RBS is also seeking a cash injection from a private equity firm for the Republic of Ireland operation.
Ulster Bank in Northern Ireland is expected to be brought into closer alignment with RBS' operations in the rest of the UK with the current all-island operation effectively split into two.
KBC did look at the option of merging its Irish banking unit with the Irish unit of another, undisclosed lender, KBC Group chief executive officer Johan Thijs said this week.
However, it opted not to enter talks about a potential deal because, in its view, criteria such as price and capital position meant it was not a realistic option, Mr Thijs said. He was speaking at the bank's Investor Day in Brussels. Earlier, however, the Belgian lender confirmed that it may sell its Irish unit.
The "first priority for Ireland is to become profitable from 2016 onwards", according to a presentation circulated to investors.
After that, options being considered for KBC Ireland include "whether to organically grow a profitable bank, build a captive bank-insurance group or sell a profitable bank," it said.