KBC Bank Ireland has said it is aiming to leave the Irish market.
The Belgian bank said it hopes to sell “substantially all” of its performing loan assets and liabilities to Bank of Ireland.
The two banks have entered into a memorandum of understanding (MoU) on the deal; however, it is still subject to, “customary due diligence, further negotiation and agreement of final terms and binding documentation.”
The banks will also have to obtain regulatory approval for the deal to go ahead.
The bank’s non-performing mortgage loan portfolio is not part of the proposed deal and KBC said it is currently reviewing its options for their sale.
KBC said it remains committed to offering its customers, "services of the highest level through its digital channels and hubs" while the negotiations are ongoing.
It said the plan will not impact on customers’ products or services and they do not need to take any action as a result of this announcement.
Announcing the plans, KBC Group CEO, Johan Thijs, said the bank had come to its decision, “given the challenging operational context for European banks.”
“We have reached an agreement with Bank of Ireland Group regarding the potential sale to Bank of Ireland Group of substantially all of the performing loan assets and liabilities of KBC Bank Ireland,” he said.
“Next to this MoU, KBC Bank Ireland’s remaining non-performing mortgage loan portfolio is currently being reviewed for potential divestment.”
Bank of Ireland Group CEO Francesca McDonagh said the proposal is a good fit for KBC customers and Bank of Ireland.
“We would be very pleased to provide KBC Ireland customers with a good home and look forward to progressing our discussions with KBC over the coming period,” she said.
It comes after Ulster Bank earlier this year announced plans to leave the Irish market and sell its performing commercial loans to AIB.
It is also in talks with Permanent TSB (PTSB) over the sale of some of its retail and SME (Small to Medium Enterprise) assets.
The bank has been operating in Ireland for more than 160 years.