KBC Group: Second-quarter result of 1 018 million euros

• Net interest income increased by 6% quarter-on-quarter and by 9% year-on-year. The net interest margin for the quarter under review amounted to 2.08%, up 2 basis points on the previous quarter and down 2 basis points year-on-year. Customer loan volumes increased 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, also went up by 2% quarter-on-quarter and 7% year-on-year.
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• The insurance service result (insurance revenues before reinsurance - insurance service expenses before reinsurance + net result from reinsurance contracts held) amounted to 166 million euros (up on the 142 million euros and 113 million euros recorded in the previous and year-earlier quarters, respectively) and breaks down into 113 million euros for non-life insurance and 53 million euros for life insurance. The non-life insurance combined ratio for the first half of 2025 came to an excellent 85%, compared to 90% for full-year 2024. Sales of non-life insurance products increased by 8% year-on-year, while life insurance sales were down 35% on the very high level recorded in the previous quarter and up 6% on their level in the year-earlier quarter.
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• Net fee and commission income was down 3% on its high level in the previous quarter, due mainly to lower fees from asset management activities caused by a lower average asset base and some seasonality, combined with lower fees for banking services. Net fee and commission income was still up 7% year-on-year, thanks to higher fees for both asset management and banking services.
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• Trading & fair value income and insurance finance income and expense was up 11 million euros but down 37 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. Dividend income was up on the previous quarter’s level, since the bulk of dividend income is traditionally received in the second quarter.
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• Operating expenses excluding bank and insurance taxes were up 2% quarter-on-quarter and 5% year-on-year. Bank and insurance taxes were down significantly on the previous quarter as the first quarter of the year traditionally includes the bulk of bank and insurance taxes for the full year. The cost/income ratio for the first six months of 2025 came to 45%, 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 six months of 2025 amounted to 41%, compared to 43% for full-year 2024.
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• Loan loss impairment charges increased to 116 million euros, compared to 38 million euros in the previous quarter and 72 million euros in the year-earlier quarter. The quarter-on-quarter increase was due entirely to the change in the reserve for geopolitical and macroeconomic uncertainties (up 40 million euros in the quarter under review, as opposed to a release of 45 million euros in the previous quarter). The credit cost ratio for the first six months of 2025 amounted to 0.15%, compared to 0.10% for full-year 2024. Impairment on assets other than loans amounted to 8 million euros, compared to virtually zero in the previous quarter and 13 million euros in the second quarter of 2024.
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• Our liquidity position remained strong, with an LCR of 157% and NSFR of 135%. Our capital base remained robust, with an unfloored fully loaded common equity ratio of 14.6%*.
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* For the fully loaded common equity ratio as of 2025, KBC focuses on the so-called unfloored fully loaded common equity ratio, which takes into account the total risk-weighted asset impact of Basel IV, excluding the output floor impact.

See full press release in attachment

Johan Thijs, Chief Executive Officer KBC Group:

‘We recorded an excellent net profit of 1 018 million euros in the second quarter of 2025. Compared to the result for the previous quarter, our total income benefited from several factors, including the sharp increase in net interest income, higher insurance income, better trading and fair value income and the seasonal peak in dividend income, while net fee and commission income – though still at a high level – was down somewhat quarter-on-quarter.

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 also up 2% quarter-on-quarter and 7% year-on-year.

Operating expenses were down significantly on their level in the previous quarter, due to the fact that the bulk of bank and insurance taxes for the full year were recorded – as usual – in the first quarter. Disregarding bank and insurance taxes, operating expenses were up by 2% quarter-on-quarter. Insurance service expenses after reinsurance were down, whereas loan loss impairment charges increased, though the credit cost ratio for the first six months of 2025 remained at a favourable level of 15 basis points, well below the through-the-cycle value of 25-30 basis points.

Consequently, when adding up the results for the first and second quarters of the year, our net profit for the first half of 2025 amounted to 1 564 million euros, up 9% on the year-earlier figure.

Our solvency position remained strong, with an unfloored fully loaded common equity ratio under Basel IV of 14.6% at the end of June 2025. Our liquidity position remained very solid too, as illustrated by an LCR of 157% and an NSFR of 135%. In line with our dividend policy, we will pay out an interim dividend of 1 euro per share in November 2025 as an advance on the total dividend for financial year 2025. Furthermore, we also decided to increase our guidance for net interest income for full-year 2025 to at least 5.85 billion euros, up from our initial guidance of 5.7 billion euros, as well as our guidance for 2025 total income growth to at least 7%, up from our initial guidance of 5.5%.

We continue to lead the way in digital innovation, with Kate playing a pivotal role in delivering smarter, faster, and more personal, safe and trusted services to our customers. Today, 5.7 million customers use Kate, that’s 19% more than one year ago. Operationally, Kate now autonomously resolves 7 out of 10 customer queries across our core markets. That’s equivalent to the workload of over 300 full-time employees, allowing our teams to focus on more complex and valuable customer conversations.

Our ambition remains clear: to be the reference bank-insurer in all our home markets. We pursue that goal not only through a strong, customer-focused business model, but above all thanks to the trust placed in us by our customers, employees, shareholders and other stakeholders. That trust means a lot to us – and I want to thank you sincerely for it.’

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