Bank of Ireland to help fund smaller rivals as part of KBC deal

div classBodysc17zpet90 cdBBJodivpDUBLIN Reuters – Bank of Ireland has committed to make up to 1 billion euros 1.07 billion in total funding available to two smaller nonbank lenders as part of competition clearance granted on Tuesday for its deal to buy most of KBCs Irish assets.p

pBank of Ireland, the country‘s largest bank by assets, agreed in October to a 5 billion euro deal to buy “substantially all” of KBC’s Irish performing assets as the Belgian financial group become the latest lender to leave the shrinking Irish market.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pTo ameliorate any effects on competition, Bank of Ireland committed to purchase up to 1 billion euros of residential mortgage backed securities to be issued in the future by Finance Ireland and Dilosk, Irelands competition regulator said.p

pBank of Ireland said the remedies will not materially impact the overall financial benefits of the acquisition. Analysts at Goodbody Strockbrokers said there had been some concern in the market that the regulator would impose stricter conditions.p

pDilosk, whose ICS Mortgages brand has over 1.4 billion euros of mortgages under management, said in a statement that the agreement would reduce the cost of funding and boost its ambition to reach a 10 market share over the next few years.p

pBank of Ireland, Allied Irish Banks and Permanent TSB had a combined 70 share of the mortgage market at the end of last year. The three are the only high street banks remaining in Ireland following the exits of KBC and NatWests Ulster Bank.p

p1 0.9324 eurosp

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pp Reporting by Padraic Halpin Editing by Muralikumar Anantharamanp

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