KBC Group (KBC) Q1 2025 earnings summary

Executive summary

• Net profit for 1Q2025 was €546 million, down from €1,116 million in 4Q2024 but up from €506 million in 1Q2024, with EPS at €1.32; performance was supported by strong commercial bank-insurance franchises, robust loan and deposit growth, and a balanced income split (49% NII, 51% non-NII).

• Total income rose 2% quarter-on-quarter and 8% year-on-year to €2,915 million, driven by higher insurance revenues, trading and fair value income, and net other income.

• Operating expenses increased due to annual bank and insurance taxes; excluding these, expenses fell 8% quarter-on-quarter.

• Announced acquisition of 365.bank in Slovakia for €761 million, expected to close by year-end, aiming for a top-three market position and expected to be EPS accretive from year one.

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

Financial highlights

• Net interest income was €1,421 million, up 4% year-on-year but down 1% sequentially; net interest margin at 2.05%.

• Net fee and commission income reached a record €690 million, up 12% year-on-year; assets under management at €273 billion, up 6% year-on-year.

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

• Operating expenses (excluding taxes) were €1,106 million, down 8% quarter-on-quarter and up 4% year-on-year; cost/income ratio at 46% (or 41% excluding all taxes).

• Loan loss impairment charges were €38 million, with a credit cost ratio of 0.08%.

Outlook and guidance

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

• 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.

• Minimum CET1 ratio target set at 13% (unfloored, fully loaded).