Johan Thijs - Chief Executive Officer
We recorded a net profit of 556 million euros in the first quarter of 2018. A very good result indeed, despite the fact that we booked the bulk of the bank taxes for the full year in the first quarter (371 million euros in 1Q2018). Driven by the commercial performance of our core activities, our total income was up quarter-on-quarter, while costs
– excluding bank taxes – were down on the seasonally high last quarter of the year. Both our life and non-life businesses grew significantly year-on-year. Finally, we were able to release some loan loss provisions once again, due mainly to our Irish mortgage book.
In the quarter under review, we completed the acquisition of the remaining 40% stake in the life insurance joint venture between our subsidiary UBB and MetLife in Bulgaria. This reaffirms our position as a strong, local market player that is able to offer a full range of bank-insurance products to our Bulgarian clients in an omni-channel environment. It will undoubtedly help in making UBB and DZI a genuine reference bank-insurance group in Bulgaria, which will ultimately benefit its clients, employees and all other stakeholders.
With the aim of further improving client experience, we have continued developing innovative client-centric solutions that make our clients’ lives easier. To name just one example, we were the first bank in Belgium to add multi-banking possibilities to our KBC Mobile app following the opportunities created by PSD2. A few weeks after their introduction, we are delighted to say that we received an enthusiastic response from our clients.
We also strive to make a positive contribution to society through our financing activities. For example, it is our ambition to increase our renewable energy portfolio to over 50% of our total energy sector portfolio by 2030 (currently this stands at 41%). Moreover, at the beginning of this year, we decided to update various KBC sustainability policies, which will be implemented in June. Finally, as part of our new KBC credit energy policy, we announced that we would exit the coal sector and reduce the current exposure to coal-based electricity production to zero by 2023 at the latest.
Last but not least, the European economic environment has remained attractive, with solid growth and low inflation. However, now that sentiment indicators have fallen from their recent highs, the period of accelerating growth has probably come to an end. The risk of further economic de-globalisation, with escalating trade conflicts and geopolitical tensions are the main factors that could impede European economic growth. We are convinced, however, that we have a more than solid starting position in that economic arena, thanks to the sustained efforts we have made in recent years to put the client at the centre of everything we do, coupled with our excellent solvency and liquidity position.
In closing, I'd like to take this opportunity again to thank all the stakeholders who have put their trust in us and assure them that we will do everything possible to move even closer to achieving our ultimate goal of being the reference bank-insurer in all our core markets.
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