KBC Bank Ireland has announced plans to divest all its performing loan assets and its deposit book to the Bank of Ireland for nearly €5bn.

As per the agreement, Bank of Ireland will buy nearly €8.8bn of performing mortgages, €100m of mainly performing commercial and consumer loans, and approximately €4.4bn of deposits.

The deal also includes a small portfolio of non-performing mortgages (NPEs), which is worth nearly €300m.

The transaction, which is subject to regulatory approval, will be funded by Bank of Ireland’s existing resources.

KBC Group CEO Johan Thijs said that the agreement with Bank of Ireland Group is “an important step in KBC Group’s withdrawal from the Irish market.”

In April this year, KBC Bank Ireland reached a memorandum of understanding (MOU) with Bank of Ireland for the sale of its entire performing loan assets and liabilities.

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Bank of Ireland group CEO Francesca McDonagh said: “This acquisition is a positive development for our business and consistent with our growth strategy. We look forward to supporting our new customers on their important financial decisions over the years ahead.”

In August, the Belgian lender reached an agreement to sell its non-performing mortgage loan portfolio of roughly €1.1bn to funds managed by CarVal Investors.

Earlier, UK’s NatWest Group agreed to sell the retail business of Irish unit Ulster Bank to financial services group Permanent TSB.