KBC Group: Fourth-quarter result of 1 116 million euros

• Net interest income increased by 3% quarter-on-quarter and by 5% year-on-year. The net interest margin for the quarter under review amounted to 2.08%, stable compared to the previous quarter and up 9 basis points on the year-earlier quarter. Customer loan volumes were up 2% quarter-on-quarter and 5% year-on-year. Customer deposits – excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches – were up 2% quarter-on-quarter and 7% year-on-year (with the latter figure benefiting from the inflow of core customer money in the third quarter after the Belgian state note had matured).

• The insurance service result (insurance revenues before reinsurance - insurance service expenses before reinsurance + net result from reinsurance contracts held) amounted to 125 million euros (compared to 81 million euros and 100 million euros in the previous and year-earlier quarters, respectively) and breaks down into 76 million euros for non-life insurance and 49 million euros for life insurance. Our non-life insurance result rebounded strongly on the previous quarter, which had been impacted by Storm Boris in Central Europe. The non-life insurance combined ratio for full-year 2024 amounted to 90% (88% when excluding the net impact of -33 million euros of Storm Boris), compared to 87% for full-year 2023. Non-life insurance sales increased by 8% year-on-year. Life insurance sales were down 8% on the very high level recorded in the previous quarter and up 7% on their level in the year-earlier quarter.

• Net fee and commission income was up 9% and 17% on its level in the previous and year-earlier quarters, respectively. In both cases, the increase came about thanks to the higher level of fees for our asset management activities and banking services. Assets under management were up 2% quarter-on-quarter and 13% year-on-year.

• Trading & fair value income and insurance finance income and expense was down 31 million euros and 34 million euros on the figures for the previous and year-earlier quarters, respectively. Net other income was below its normal run rate due mainly to a negative 28-million-euro one-off item relating to a legal case in Hungary.

• Operating expenses excluding bank and insurance taxes were up 6% and 3% on their level in the previous and year-earlier quarters, respectively. The cost/income ratio for full-year 2024 came to 47%, compared to 49% for full-year 2023. In that calculation, certain non-operating items have been excluded. When excluding all bank and insurance taxes, the cost/income ratio for full-year 2024 amounted to 43%, the same as for full-year 2023. Full-year 2024 operating expenses excluding bank and insurance taxes but including insurance commissions paid rose by 1.6% compared to full-year 2023, in line with our guidance of an increase below 1.7% year-on-year.

• Loan loss impairment charges amounted to 50 million euros, compared to 61 million euros in the previous quarter and a release of 5 million euros in the year-earlier quarter. The credit cost ratio for full-year 2024 amounted to 0.10%, compared to 0.00% for full-year 2023. Impairment on assets other than loans amounted to 28 million euros in the quarter under review, compared to 7 million euros in the previous quarter and 175 million euros in the year-earlier quarter (including a 109-million-euro impairment on goodwill in the Czech Republic).

• Income tax expenses were positively impacted in the quarter under review by a one-off tax benefit of 318 million euros, due to the forthcoming liquidation of Exicon (the remaining activities of KBC Bank Ireland).

• Our liquidity position remained strong, with an LCR of 158% and NSFR of 139%. Our capital base remained robust, with a fully loaded common equity ratio of 15.0% (which includes the impact of the proposed dividend payment).

See full press release in attachment

Johan Thijs, Chief Executive Officer KBC Group:

‘We recorded a net profit of 1 116 million euros in the last quarter of 2024. Compared to the result of the previous quarter, our total income benefited from several factors, including higher net interest income, increased insurance revenues and sharply higher net fee and commission income driven by an excellent business performance. This clearly illustrates how our integrated customer offering strongly contributes to income growth and income diversification. These items were partly offset by a decrease in trading & fair value income and lower net other income.

Our loan portfolio continued to expand, increasing by 2% quarter-on-quarter and by 5% year-on-year. Customer deposits – excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches – were up 2% quarter-on-quarter and 7% year-on-year, with the latter figure benefiting from the successful return of customer funds after the Belgian state note had matured in the previous quarter.

Operational expenses were up in the quarter under review but remained perfectly within our full-year 2024 guidance. Insurance service expenses were lower, as the previous quarter had been impacted by storms and floods in Central Europe (especially Storm Boris). Loan loss impairment charges, excluding the reserve for geopolitical and macroeconomic uncertainties, were down on the level recorded in the previous quarter, leading to a credit cost ratio of 16 basis points for full-year 2024, well below our guidance figure. Including the reserve for geopolitical and macroeconomic uncertainties, the credit cost ratio stood at 10 basis points for full-year 2024. We also recorded a one-off tax benefit of 318 million euros in the quarter under review, due to the forthcoming liquidation of Exicon (the remaining activities of KBC Bank Ireland).

Consequently, when adding up the four quarters of the year, our full-year net profit amounted to an excellent 3 415 million euros, slightly up year-on-year.

On the sustainability front, we are proud to be included for the third consecutive year in the CDP Climate A List. This recognition highlights KBC's leading role in climate-related disclosures and actions.

Our solvency position remained strong, with a fully loaded common equity ratio of 15.0% at the end of December 2024. Our liquidity position remained very solid too, as illustrated by an LCR of 158% and NSFR of 139%. Our Board of Directors has decided to propose a total gross dividend of 4.85 euros per share to the General Meeting of Shareholders for the accounting year 2024. That amount includes 0.70 euro per share already paid in May 2024, reflecting the surplus capital above the 15% fully loaded CET1 threshold per end 2023 and 4.15 euros per share, of which an interim dividend of 1 euro per share was already paid in November 2024 and the remaining 3.15 euros per share to be paid in May 2025. When including the proposed dividend of 4.15 euros per share and additional tier-1 coupon, the pay-out ratio would amount to approximately 51% of 2024 net profit.

Lastly, we have also updated our short-term financial guidance. For 2025, we are aiming to achieve an annual growth rate of at least 5.5% for total income and an annual growth rate of below 2.5% for operating expenses excluding bank and insurance taxes. Furthermore, we also want to achieve a combined ratio of maximum 91% in non-life insurance.

In closing, I would like to sincerely thank all our customers, employees, shareholders and all other stakeholders for their trust and support, and assure them that we remain committed to being the reference in bank-insurance, innovation and digitalisation in all our home markets.’

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

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