KBC Group: First-quarter result of 557 million euros

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Net interest income increased by 4% quarter-on-quarter and by 18% year-on-year (2% and 15%, respectively, excluding the recent acquisitions of 365.Bank and Business Lease). The net interest margin for the quarter under review amounted to 2.17%, up 6 basis points on the previous quarter and 12 basis points year-on-year (up 3 basis points and 9 basis points, respectively, excluding the recent acquisitions). Customer loan volumes increased organically 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 and up by 3% year-on-year.

The insurance service result (insurance revenues before reinsurance - insurance service expenses before reinsurance + net result from reinsurance contracts held) amounted to 172 million euros, compared to 166 million euros recorded in the previous quarter and 142 million euros in the year-earlier quarter. The insurance service result for the quarter under review breaks down into 118 million euros for non-life insurance and 54 million euros for life insurance. The non-life insurance combined ratio for the first quarter of 2026 came to an excellent 84%, compared to 87% for full-year 2025. Sales of non-life insurance products grew by 7% year-on-year, while life insurance sales were up 9% on the level recorded in the previous quarter and 15% on the level in the year-earlier quarter.

Net fee and commission income was up 1% quarter-on-quarter, despite the geopolitical turmoil, and up 6% year-on-year. Excluding the recent acquisitions, it was down 2% and up 3%, respectively. Assets under management were down 1% quarter-on-quarter and up 8% year-on-year.

Trading & fair value income and insurance finance income and expense was down 97 million euros and 73 million euros on the figure for the previous and year-earlier quarters, respectively. Net other income was above its normal run rate, due to a one-off element, among other things.

Operating expenses excluding bank and insurance taxes were down 1% quarter-on-quarter (partly seasonal effect) and up 10% year-on-year (down 3% and up 7%, respectively, excluding the recent acquisitions). Bank and insurance taxes amounted to 549 million euros, since the first quarter of the year traditionally includes the bulk of the bank and insurance taxes for the entire year. The cost/income ratio for the first quarter of 2026 came to 44%, compared to 46% for full-year 2025. In that calculation, certain non-operating items have been excluded and bank and insurance taxes were spread evenly throughout the year. When excluding all bank and insurance taxes, the cost/income ratio for the quarter under review amounted to 41%, the same as for full-year 2025.

Loan loss impairment charges amounted to 164 million euros (154 million euros excluding the recent acquisitions) in the quarter under review. The figure for the quarter under review included 89 million euros for the loan book, slightly up quarter-on-quarter, as well as a 75-million-euro increase of the reserve (ECL and management overlay) for geopolitical and macroeconomic uncertainties. Note that this had a positive impact on the common equity ratio of 4 basis points (by lowering the IRB shortfall within common equity capital). Excluding the reserve (ECL and management overlay) for geopolitical and macroeconomic uncertainties and the recent acquisition of 365.bank, the credit cost ratio for the quarter under review amounted to 0.15%, compared to 0.13% for full-year 2025. Impairment on assets other than loans amounted to a mere 1 million euros in the quarter under review, compared to 48 million euros in the previous quarter and nil in the year-earlier quarter.

Our liquidity position remained strong, with an LCR of 159% and NSFR of 135%. Our capital base remained robust, with an unfloored fully loaded common equity ratio of 14.4%*. The latter includes a -0.5-percentage-point impact of the recent acquisitions.

* The ‘unfloored fully loaded common equity ratio’ takes into account the total impact of Basel IV on risk-weighted assets, excluding the output floor impact.

See full press release in attachment

Johan Thijs, Chief Executive Officer KBC Group:

We recorded a net profit of 557 million euros in the first quarter of 2026. Compared to the previous quarter, our total income benefited from strong net interest income, higher insurance revenues, slightly higher net fee and commission income despite the geopolitical turmoil and increased net other income, while trading & fair value income and dividend income were down. Our loan portfolio continued to expand, growing organically by 2% quarter-on-quarter and by as much as 7% year-on-year. Customer deposits – excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches – were stable quarter-on-quarter and up 3% year-on-year. As usual, the first quarter of the year included the bulk of the bank and insurance taxes for the entire year. Operating expenses excluding bank and insurance taxes were down slightly on the previous quarter, due in part to seasonal effects, while insurance service expenses after reinsurance were slightly up. Loan loss impairment charges for our lending book were slightly up on the level recorded in the previous quarter, and due to the geopolitical turmoil we increased the reserve (ECL and management overlay) for geopolitical and macroeconomic uncertainties by 75 million euros, resulting in a total reserve of 175 million euros.

The past few months have also seen us make considerable progress in implementing our strategy. We finalised the acquisitions of 365.bank in Slovakia and Business Lease in the Czech Republic and Slovakia. These acquisitions contributed 13 million euros to profit in the first quarter of 2026. They had an impact of -0.5 percentage points on our capital position, bringing our unfloored fully loaded common equity ratio under Basel IV to a strong 14.4% at the end of March 2026. Our liquidity position remained very solid too, as illustrated by an LCR of 159% and an NSFR of 135%. As approved by the General Meeting of Shareholders on 7 May 2026, we will pay a final dividend of 4.1 euros per share on 20 May 2026, bringing the total dividend for full-year 2025 to 5.1 euros per share and the pay-out ratio to 60% of 2025 net profit.

We aim to lead the way in digital innovation and in this regard are delighted that Kate, our AI-powered personal digital assistant, has now reached 6.1 million customers, up 11% on the year-earlier figure, with over 70% of customer queries in our core markets being solved autonomously. In Belgium and the Czech Republic, the ‘MyMobility’ ecosphere has already onboarded close to 340 000 customers to date. Customers retrieve useful information, guidance and support for their mobility questions. Simulations and advice are partially Kate-driven. During this digital interaction, customers share their plans and needs, which serves as useful leads for KBC to reach out and set up a dialogue, either through Kate or one of our employees or insurance agents. The same goes for the MyHome ecosphere of KBC Mobile, which already onboarded close to 40 000 customers to date in Belgium. Furthermore, responding to the growing demand for secure crypto investment solutions, we made it possible for private investors to purchase and sell crypto assets on Bolero, KBC’s online investment platform, in a secure and regulated environment – a first in Belgium. And even more recently, KBC Asset Management entered Europe’s rapidly growing Exchange Traded Fund (ETF) market with the launch of a unique CZK-hedged ETF for our Czech investors. This milestone supports KBC’s broader strategy to provide innovative investment solutions that are convenient, valuable and reliable for a wide range of customers.

Our goal remains to be the reference bank‑insurer across all our core markets. We work towards achieving this ambition through a customer‑centric approach and a firm commitment to digital innovation, but most importantly based on the confidence our customers, employees, shareholders and other stakeholders place in us. That trust is deeply valued and something I am sincerely grateful for.

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