KBC Group: Third-quarter result of 776 million euros

Outside trading hours - Regulated information*

  • Net interest income increased by 4% quarter-on-quarter and by 17% year-on-year (1% quarter-on-quarter and 14% year-on-year when recently consolidated Raiffeisenbank Bulgaria is excluded). The net interest margin for the quarter under review amounted to 1.90%, down 1 basis point quarter-on-quarter but up 10 basis points on the year-earlier quarter. Loan volumes continued to increase, going up by 2% quarter-on-quarter and 9% year-on-year. Deposits excluding debt certificates fell by 2% quarter-on-quarter but increased by 6% year-on-year. These volume growth figures were calculated on an organic basis (excluding the changes in the scope of consolidation and forex effects).


  • Technical income from our non-life insurance activities (premiums less charges, plus the ceded reinsurance result) was up 4% on the level recorded in the previous quarter and 33% on the year-earlier quarter. The year-on-year increase was related to higher premium income and lower technical charges, partially offset by a lower ceded reinsurance result. The combined ratio for the first nine months of 2022 amounted to an excellent 86%. Sales of our life insurance products were down 8% and 15% on the level recorded in the previous and year-earlier quarters, respectively.


  • Net fee and commission income was up 3% on its level in the previous quarter but down 1% on the year-earlier quarter (down 2% quarter-on-quarter and 5% year-on-year when recently consolidated Raiffeisenbank Bulgaria is excluded). The organic quarter-on-quarter decrease was due mainly to the higher level of distribution fees paid.


  • Trading & fair value result was down 37% on the level recorded in the previous quarter, but double the relatively low level recorded in the year-earlier quarter. The quarter-on-quarter decrease was attributable primarily to a significantly lower dealing room result and a less positive change in the market value of derivatives used for asset/liability management purposes.


  • All other income items combined were down 80% and 79% on the figure recorded in the previous and year-earlier quarters, respectively. The quarter-on-quarter decrease was almost entirely due to the drop in net other income (resulting in part from realised losses on the sale of bonds in the quarter under review and a high capital gain in the previous quarter). ​


  • Costs excluding bank taxes were up 7% on their level in the previous quarter and 4% on their year-earlier level. Excluding recently consolidated Raiffeisenbank Bulgaria, costs excluding bank taxes were up 4% quarter-on-quarter and 2% year-on-year. The cost/income ratio for the first nine months of 2022 amounted to 54%. In that calculation, certain non-operating items have been excluded and bank taxes spread evenly throughout the year. Excluding all bank taxes, the cost/income ratio amounted to 48%.


  • The quarter under review included a 79-million-euro net loan loss impairment charge, compared to a net charge of 9 million euros in the previous quarter, and a net release of 66 million euros in the year-earlier quarter. The net charge in the quarter under review included a 24-million-euro net release for the loan book, which was more than offset by a 103-million-euro increase in the reserve for geopolitical and emerging risks. As a consequence, the credit cost ratio for the first nine months of 2022 amounted to 0.05%, compared to -0.18% for full-year 2021 (a negative sign implies a positive impact on the results).


  • Our liquidity position remained strong, with an LCR of 155% and NSFR of 140%. Our capital base remained robust, with a fully loaded common equity ratio of 15.0%.


 See the full press release in attachment.​​  

Johan Thijs, Chief Executive Officer

‘Almost nine months have now passed since Russia invaded Ukraine and, unfortunately, there is no sign of an end to the war. The tragedy in Ukraine is causing immense human suffering and our heartfelt solidarity goes out to all victims of this conflict. We sincerely hope that a respectful, peaceful and lasting solution can be achieved as soon as possible. The war in Ukraine, alongside other geopolitical uncertainties, is also sending shockwaves throughout the global economy, resulting in high inflation and weighing on economic growth. Given those uncertainties, we have further increased our dedicated reserve for geopolitical and emerging risks, bringing it close to 0.4 billion euros at the end of the quarter under review.
The tragedy unfolding in Ukraine comes on top of other pressing issues such as the climate crisis, as evidenced by the extreme weather events of the past year. In that respect, sustainability and ESG in general also remain high on our agenda. In August, for example, we became the first Belgian financial institution to issue a social bond, for an amount of 750 million euros. The money raised will be used for investments in the health care sector. What’s more, having already achieved or even surpassed almost all our previously set sustainability objectives ahead of schedule, we have – in accordance with our climate commitments – now set new climate-related targets for a number of key sectors and activities. You can read all about them in our first ever Climate Report on www.kbc.com.
In early July, we finalised the acquisition of Raiffeisenbank Bulgaria. This entity and our existing Bulgarian subsidiary UBB will merge their operations, allowing us to significantly expand our share of our Bulgarian core market to an estimated 19% in terms of assets. Raiffeisenbank Bulgaria has now been included in our consolidated results for the first time.
As regards our financial results, we posted an excellent net profit of 776 million euros in the quarter under review. Quarter-on-quarter total income was more or less stable, with higher net interest income, technical insurance income and net fee and commission income being offset by lower trading & fair value income and net other income. Costs were also more or less at the previous quarter’s level, though that quarter did include a one-off 78-million euro charge in the form of a new additional bank and insurance tax in Hungary. We recorded a net impairment release on our loan book, which was more than offset by an increase in the reserve for geopolitical and emerging risks. Our solvency position remained very solid with a common equity ratio of 15% on a fully loaded basis, and our liquidity position was excellent, as illustrated by an NSFR of 140% and an LCR of 155%. As announced earlier, we will – in line with our general dividend policy – pay out an interim dividend of 1 euro per share on 16 November 2022 as an advance on the total dividend for financial year 2022.
In closing, a few words about our mobile app. A few weeks ago, independent international research agency Sia Partners again named KBC Mobile one of the top performing mobile banking apps worldwide. KBC Mobile is also the best mobile banking and insurance app in Belgium where it has further consolidated the leading position it already occupied. This is not only recognition of the quality of service we provide, it’s also a clear sign that we remain committed to innovation and ensuring maximum convenience for our customers, who continue to put their trust in us. I would like to thank our customers, our employees, our shareholders and all our other stakeholders for their continuing trust and support.’


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


Press release in pdf Press release in pdf.pdf - 456 KB


Viviane Huybrecht General Manager KBC Corporate Communication / Spokesperson





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