KBC Group: First-quarter result of 882 million euros
Press Release
Outside trading hours – Regulated information*
Brussels, 16 May 2023 (07.00 a.m. CEST)
“More than a year has now passed since Russia invaded Ukraine and, unfortunately, there is still no sign of an end to the war and the immense human suffering it is causing. The war in Ukraine, alongside other geopolitical uncertainties, is continuing to dampen economic growth for the global economy. On top of this, the collapse of Silicon Valley Bank and Credit Suisse triggered turbulence on the financial markets.
The challenging environment is not distracting us from taking important steps towards achieving our strategic goals. In the quarter under review we finalised the sale of substantially all of the remaining assets and liabilities of KBC Bank Ireland. At the same time, the integration of the recently acquired ex-Raiffeisenbank Bulgaria into our existing Bulgarian banking subsidiary UBB is proceeding at full speed, with the legal merger of the entities being registered on 10 April 2023.
Our financial results took into account, for the first time, the new IFRS 17 accounting standard for insurance contracts. We generated an excellent net profit of 882 million euros in the first quarter of 2023. In the quarter under review, our total income benefited from, among other things, strong interest income from the transformation result, increased net fee and commission income resulting from the sale of investment products and a significant positive one-off gain related to the sale of our Irish portfolio in February. Operational costs were up, due to inflation and the fact that the bulk of the bank and insurance taxes for the full year were booked in this first quarter. Excluding bank and insurance taxes, costs decreased quarter-on-quarter. Last but not least, we were able to record a net loan loss impairment release in the quarter under review, as opposed to a net charge in the previous quarter. At the end of the quarter under review, the provisions we have set aside for geopolitical and emerging risks amounted to 0.4 billion euros. Our solvency position remained strong with a fully loaded common equity ratio of 16.1%. Our liquidity remained excellent, as illustrated by an NSFR of 139% and LCR of 152%, both well above the minimum legal target of 100%.
In line with the capital deployment plan we announced for full-year 2022, we envisage – over and above the 4 euros already paid as the dividend for 2022 – distributing the surplus capital. This means the surplus capital above a fully loaded common equity ratio of 15%, as well as the capital released from the completed sale transaction in Ireland. We expect to do this in the form of a share buyback (subject to ECB approval) and/or an exceptional interim dividend. The final decision on this matter will be taken by the Board of Directors in the next few months.
Progress on the digitalisation front remains a top priority too. We are pleased to report that the popularity of our digital assistant Kate has grown beyond our expectations. Customers throughout the group make active use of Kate. Kate has also outperformed our own targets last year in terms of the ability to autonomously handle customers’ questions. Also on the sustainability front, we are continuing our gradual but steadfast journey in a number of areas, including the climate domain. We are very proud that our efforts are also being recognised externally by, for instance, Terra Carta and CDP.
In closing, I’d like to sincerely thank all our customers, our employees, our shareholders and all other stakeholders for their continuing trust and support.’’
Johan Thijs
Chief Executive Office
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