The mortgage and small-business lender KBC Bank Ireland has virtually shut down its sales function and has been internally re-assigning staff to credit control as it tries to get control of a deteriorating arrears situation.

One senior manager at a large Dublin mortgage broker told the Sunday Tribune "nearly everybody" in KBC had been moved to credit control, with even account managers spending parts of every week chasing loan payments, rather than chasing up new business. The bank declined to comment.

A spokesman did confirm management was also seeking 15 redundancies at its Dublin base. Staff are reported to be receiving seven weeks' pay for every year of service. The spokesman could not say whether there would be more job losses on the way for the nearly 700 employees of the bank.

The moves come amid Moody's credit downgrade of KBC Group, the bank's Belgian parent, last week – partly because of its exposure to the Irish property market – and a €2bn capital bail-out from the Flemish government. Ireland has the highest share of non-performing loans across eight countries in which the bank does business.