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Two more banks count cost of COVID-19

Two more banks, AIB and KBC Bank Ireland, have outlined the effects of COVID-19 disruption on their financial position in the first half of this year.

In its first-half results, AIB has taken a charge of €1.2 billion for expected loan losses, with chief executive Colin Hunt (pictured) saying the pandemic had provoked a “severe and rapid deterioration” in the global and national economy.

Payment breaks

The provision, which meant the bank recorded an after-tax loss of €700m, includes the cost of 64,000 loan payment breaks for customers.

AIB said lending fell across all sectors during the six months, with the total amount of new lending down by 27%.

It also had exceptional costs of €75m, which included costs related to the Central Bank’s tracker mortgage probe, voluntary severance payments and measures necessary for COVID-19 guidelines.

KBC

Meanwhile, KBC Bank Ireland made a first-half loss of €55m, hit by a €95m charge to deal with the effects of COVID-19 on its loan book.

The bank says it has processed around 6,400 payment breaks on mortgages and loans.