KBC Group (KBC) Q1 2025 earnings summary

Executive summary

• Net result for Q1 2025 was EUR 546 million, reflecting strong performance across commercial bank-insurance franchises, robust loan and deposit growth, and significant impact from EUR 539 million in upfront bank taxes.

• Integrated bank-insurer model with balanced income streams (49% interest-bearing, 51% non-interest-bearing), well-diversified geographically and by business line.

• Digital-first strategy recognized globally, with 5.5 million users engaging with the Kate digital assistant and KBC Mobile ranked as the top banking app worldwide.

• Announced acquisition of 365.bank in Slovakia for EUR 749–761 million, aiming for a top-three market position, cross-selling potential, and expected to be EPS accretive from year one.

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

Financial highlights

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

• Fee and commission income up 12% year-over-year, with record investment product sales and assets under management at EUR 273 billion, up 6% year-over-year.

• Non-life insurance grew 8–9% year-over-year, with a combined ratio of 86%; life insurance sales up 32% year-over-year and 39% quarter-over-quarter.

• Operating expenses (excluding taxes) down 8% quarter-on-quarter, up 4% year-over-year; cost/income ratio at 46% (or 41% excluding all taxes).

• Credit cost ratio at 0.08% (8 bps), well below guidance of 25-30 bps; loan loss impairment charge of EUR 38 million.

Outlook and guidance

• 2025 guidance: total income growth of at least 5.5% year-over-year, net interest income of at least EUR 5.7 billion, insurance revenues up at least 7%, and OpEx growth below 2.5% (excluding taxes).

• Medium-term (2024–2027): total income CAGR at least 6%, NII CAGR at least 5%, insurance revenues CAGR at least 7%, OpEx CAGR below 3%.

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

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

• European GDP growth expected at 0.9% in 2025, with Central Europe outperforming.