KBC Group (KBC) Q1 2025 earnings summary

Executive summary

• Net profit for 1Q2025 was EUR 546 million, down from EUR 1,116 million in 4Q2024 but up from EUR 506 million in 1Q2024, with EPS at EUR 1.32; performance was supported by strong commercial bank-insurance franchises and robust loan and deposit growth.

• Income streams were well balanced (49% net interest income, 51% non-interest income), reflecting a diversified and integrated bank-insurer model.

• Digital transformation advanced, with 5.5 million users of the Kate digital assistant and KBC Mobile ranked as a top global banking app.

• Announced acquisition of 98.45% of 365.bank in Slovakia for EUR 761 million, expected to close by year-end, aiming for a top-three market position and significant synergies.

• Updated dividend policy: payout ratio of 50%-65% of consolidated profit, with a EUR 1/share interim dividend and focus on organic growth and M&A.

Financial highlights

• Net interest income was EUR 1.421 billion, up 4% year-over-year but down 1% sequentially; net interest margin at 2.05%.

• Net fee and commission income reached EUR 690 million, up 12% year-over-year, with record investment product sales.

• Insurance service result was EUR 142 million, with non-life at EUR 96 million and life at EUR 45 million; non-life combined ratio at 86%.

• Operating expenses (excluding taxes) were EUR 1,106 million, down 8% quarter-on-quarter and up 4% year-on-year; cost/income ratio at 41% (excluding all taxes).

• CET1 ratio at 14.5% (Basel IV, fully loaded, unfloored); leverage ratio at 5.4%; NSFR at 140%; LCR at 157%; Solvency II ratio at 210%.

Outlook and guidance

• 2025 guidance: total income growth of at least 5.5% year-on-year, net interest income of at least EUR 5.7 billion, insurance revenues up at least 7%, and operating expenses (excl. taxes) to grow below 2.5%.

• Combined ratio expected below 91%, credit cost ratio well below 25-30 bps.

• Medium-term (2024-2027): CAGR of at least 6% for total income, 5% for net interest income, and 7% for insurance revenues.

• Short-term and long-term financial guidance reconfirmed despite macroeconomic volatility and trade policy uncertainty.