KBC Group: First-quarter result of 546 million euros

• Net interest income slightly decreased by 1% quarter-on-quarter and went up by 4% yearon- year. The net interest margin for the quarter under review amounted to 2.05%, down 3 basis points compared to the previous and year-earlier quarters, respectively. Customer loan volumes were up 2% quarter-on-quarter and 7% year-on-year. Customer deposits, excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches, were stable quarter-on-quarter (with a shift from term deposits to savings accounts) and up 7% year-on-year.

• The insurance service result (insurance revenues before reinsurance - insurance service expenses before reinsurance + net result from reinsurance contracts held) amounted to 142 million euros (compared to 125 million euros and 134 million euros in the previous and year-earlier quarters, respectively) and breaks down into 96 million euros for non-life insurance and 45 million euros for life insurance. The non-life insurance combined ratio for the quarter under review amounted to an excellent 86%, compared to 90% for full-year 2024. Non-life insurance sales increased by 8% year-on-year, while life insurance sales were up 39% on the level recorded in the previous quarter and up 32% on their level in the year-earlier quarter.

• Net fee and commission income was slightly down (-1%) quarter-on-quarter, due entirely to seasonality and positive year-end effects in the previous quarter. Net fee and commission income was up 12% year-on-year, thanks to higher fees for asset management activities and banking services. Assets under management were down 1% quarter-on-quarter and up 6% year-on-year.

• Trading & fair value income and insurance finance income and expense was up 29 million euros and 10 million euros on the figures for the previous and year-earlier quarters, respectively. Net other income was above its normal run rate due mainly to higher-than average gains on the sale of real estate.

• Operating expenses excluding bank and insurance taxes were down 8% quarter-on-quarter and up 4% year-on-year. The first quarter of the year traditionally includes the bulk of the bank and insurance taxes for the full year (539 million euros in the first quarter of 2025). The cost/income ratio for the first quarter of 2025 came to 46%, compared to 47% for full-year 2024. In that calculation, certain non-operating items have been excluded and bank and insurance taxes spread evenly throughout the year. When excluding all bank and insurance taxes, the cost/income ratio for the first quarter of 2025 amounted to 41%, compared to 43% for full-year 2024.

• Loan loss impairment charges amounted to 38 million euros, compared to 50 million euros in the previous quarter and 16 million euros in the year-earlier quarter. The credit cost ratio for the quarter under review amounted to 0.08%, compared to 0.10% for full-year 2024. Impairment on assets other than loans was virtually zero in the quarter under review.

• Our liquidity position remained strong, with an LCR of 157% and NSFR of 140%. Our capital base remained robust, with an unfloored fully loaded common equity ratio of 14.5%*.

* For the fully loaded common equity ratio as of the first quarter of 2025, KBC focuses on the so-called unfloored fully loaded common equity ratio, which takes into account the total risk-weighted assets impact of Basel IV, excluding the output floor impact.

See full press release in attachment

Johan Thijs, Chief Executive Officer KBC Group:

​'We recorded a net profit of 546 million euros in the first quarter of 2025. Compared to the result of the previous quarter, our total income benefited from several factors, including increased insurance revenues, trading and fair value income and net other income, while net interest income and net fee and commission income were slightly down as a result of seasonality and some positive year-end effects in the fourth quarter of 2024.
​Our loan portfolio continued to expand, increasing by 2% quarter-on-quarter and by 7% year-on-year. Customer deposits – excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches – were stable quarter-on-quarter (with a shift from term deposits to savings accounts) and up 7% year-on-year.
​Operating expenses were up, since the bulk of the bank and insurance taxes for the full year are recorded – as usual – in the first quarter. Disregarding bank and insurance taxes, operating expenses fell by 8% quarter-on-quarter. Insurance service expenses also fell, as did loan loss impairment charges, resulting in a very favourable credit cost ratio of just 8 basis points for the quarter under review (16 basis points excluding the changes in the reserve for geopolitical and macroeconomic uncertainties).
​Our solvency position remained strong, with an unfloored fully loaded common equity ratio under Basel IV of 14.5% at the end of March 2025. Our liquidity position remained very solid too, as illustrated by an LCR of 157% and NSFR of 140%.

​On 8 May 2025, we paid a final dividend of 3.15 euros per share, bringing the total dividend for full-year 2024 to 4.85 euros per share. We also updated our dividend and capital deployment policy. As from 2025, we will pay a dividend of between 50% and 65% of our consolidated result, 1 euro of which will be paid in November as an interim dividend. We aim to remain amongst the better capitalised financial institutions in Europe. Each year, when announcing the full-year results, our Board will take a decision – at its discretion - on capital deployment. The focus will predominantly be on further organic growth alongside mergers and acquisitions. We see a 13% unfloored fully loaded common equity ratio as the minimum.

​Furthermore, KBC reached an agreement to acquire 98.45% of 365.bank in Slovakia based on a total value for 365.bank of 761 million euros. This investment will allow us to further strengthen our position in the Slovak market while closing the gap with the top three players in the banking sector. 365.bank is a retail-focused bank with subsidiaries in asset management and consumer finance and is very complementary to the business of KBC’s existing Slovak subsidiary ČSOB, leading to significant cost, revenue (cross-selling) and funding synergies. KBC will particularly strengthen its reach in retail banking as well as benefit from access to the unique client base and distribution network of 365.bank and its exclusive partnership with Slovak Post. Closure of the deal is subject to regulatory approval and will reduce our unfloored fully loaded common equity ratio by approximately 50 basis points upon closing, which is expected by the end of this year.

​Recent weeks have been characterised by unprecedented macro-economic (trade) uncertainty as a result of the US policy on trade tariffs and its repercussions on the financial markets. Nevertheless, we confirm our short-term and longterm financial guidance. Last but not least, I would like to express my sincerest gratitude towards our customers, employees, shareholders and all other stakeholders for their continued trust in our group.’

*This news item contains information that is subject to the transparency regulations for listed companies.

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