KBC Group (KBC) Q3 2024 earnings summary

Executive summary

• Net profit for Q3 2024 was EUR 868 million, reflecting strong performance across all business units and core countries, though slightly below previous quarters.

• Integrated bank-insurance model and digital-first strategy, with KBC Mobile ranked #1 globally and digital sales penetration rising significantly.

• Customer money inflows totaled EUR 8.7 billion, including EUR 6.5 billion from the Belgian State Note recovery, despite fierce competition.

• Sustainability and digitalization remain strategic priorities, with leading ESG ratings and climate targets.

• Interim dividend of EUR 1 per share to be paid in November 2024.

Financial highlights

• Net interest income rose 1% quarter-over-quarter and year-over-year, despite a negative impact from inflation-linked bonds.

• Fee and commission income increased 3% quarter-over-quarter and 9% year-over-year, driven by asset management and banking services.

• Asset management net inflows hit a record EUR 2.1 billion for the quarter, with assets under management reaching EUR 269 billion, up 18% year-over-year.

• Insurance business grew 8% year-over-year, with a combined ratio of 89% impacted by natural catastrophes; life insurance sales up 28% sequentially and 80% year-over-year.

• Operating expenses (excluding bank and insurance taxes) increased 6% quarter-over-quarter and 3% year-over-year, with cost/income ratio at 47% (excl. non-operating items and taxes), or 43% excluding all taxes.

• Loan loss impairment charge was EUR 61 million, with a credit cost ratio of 0.10% for 9M2024.

Outlook and guidance

• Full-year 2024 guidance: net interest income around EUR 5.5 billion, organic loan growth ~4%, insurance revenues at least +6% year-over-year, cost/income ratio below 45%, combined ratio below 91%.

• Medium-term (2023-2026): NII CAGR at least 1.8%, insurance revenues CAGR at least 6%, cost/income ratio below 42% by end-2026.

• Lending growth target of 4% for 2024 is on track, supported by strong GDP growth in Central Europe.

• Basel IV implementation expected to increase risk-weighted assets by EUR 8.5 billion by 2033.

• Dividend policy: payout ratio of at least 50% of consolidated profit, interim dividend of EUR 1/share, and potential distribution of capital above 15% CET1.