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KBC Group: Third-quarter result of 776 million euros

KBC Groep
KBC Groep

Press Release

Outside trading hours - Regulated information*

Brussels, 9 November 2022 (07.00 a.m. CET)

KBC Group: Third-quarter result of 776 million euros

‘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.’

Johan Thijs
Chief Executive Officer

Full press release attached

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