KBC Group (KBC) Q2 2025 earnings summary

Executive summary

• Net profit for 2Q2025 reached €1,018 million, up 87% sequentially and 10% year-over-year, with 1H2025 net profit at €1,564 million, a 9% increase year-over-year, driven by higher net interest income, insurance income, and trading gains, despite a slight drop in fee income.

• Diversified income streams: 49% from net interest income, 51% from insurance and fee/commission products in 1H25; digital-first strategy recognized globally.

• Strong digital engagement: 5.7 million customers use the digital assistant Kate, up 19% year-over-year, contributing to cost savings and sales growth.

• Return on equity at 13% for 1H2025; cost/income ratio at 45% (excluding non-operating items and taxes); combined ratio at 85% for 1H25.

Financial highlights

• Net interest income for Q2 was €1,509 million, up 6% quarter-on-quarter and 9% year-over-year; net interest margin at 2.08%.

• Loan growth reached 2% quarter-on-quarter and 7% year-over-year; year-to-date loan growth at 4.7%, exceeding initial guidance.

• Insurance service result reached €166 million, with non-life combined ratio at 85%.

• Operating expenses (excluding taxes) increased 2% quarter-on-quarter and 5% year-over-year to €1,125 million, below internal budget.

• Loan loss impairment charges rose to €116 million in 2Q2025, mainly due to increased reserves for geopolitical and macroeconomic uncertainties.

Outlook and guidance

• 2025 guidance raised: total income growth of at least 7%, net interest income of at least €5.85 billion, and organic loan volume growth target of at least 6.5%.

• Operating expenses (excluding taxes) expected to grow below 2.5% year-over-year.

• Combined ratio for non-life insurance expected below 91%; credit cost ratio to remain well below 25–30 basis points.

• Interim dividend of €1 per share to be paid in November 2025.

• FY27 guidance: total income CAGR24-27 at least 6%, NII CAGR24-27 at least 5%, insurance revenues CAGR24-27 at least 7%.