KBC Group (KBC) Q2 2024 earnings summary

Executive summary

• Net result for Q2 2024 was €925 million, reflecting strong performance across integrated bank-insurance franchises and digital initiatives like Kate, now reaching 4.8 million users.

• Return on equity at 15% and cost/income ratio at 42%–46% demonstrate robust profitability and operational efficiency.

• Lending book and customer deposits grew, driving higher net interest income and enabling an upgrade of full-year NII guidance to €5.5 billion.

• Digital sales penetration increased, with 55% of banking and 27% of insurance products sold digitally.

• Interim dividend of €1 per share announced for November 2024, and a €1.3 billion share buyback completed.

Financial highlights

• Net interest income rose 1% quarter-over-quarter to €1,379 million, driven by higher reinvestment yields and deposit inflows, but fell 2% year-over-year.

• Net fee and commission income reached €623 million, up 1% sequentially and 7% year-over-year, supported by asset management and banking services.

• Non-life insurance written premium up 8% and earned premium up 9% year-over-year; combined ratio at 87%.

• Life insurance sales down year-over-year and quarter-over-quarter, but H1 sales exceeded last year by €200 million.

• Net loan loss impairment charge of €72 million in Q2 2024, mainly due to two large corporate files and higher ECL buffer.

• Costs (excluding bank taxes) down 2% year-over-year; cost/income ratio improved to 42%–46%.

• Return on equity at 15% for Q2 2024.

Outlook and guidance

• Full-year 2024 net interest income guidance raised to €5.5 billion, supported by ~4% organic loan growth.

• Insurance revenues expected to grow at least 6% year-over-year; operating expenses (excluding taxes) to remain below +1.7% year-over-year.

• Cost/income ratio (excluding taxes) targeted below 45% for FY24; combined ratio expected below 91%.

• Credit cost ratio expected well below through-the-cycle 25–30 bps.

• Interim dividend of €1/share to be paid in November 2024; payout ratio of at least 50% of consolidated profit.