KBC Group (KBC) Q4 2024 earnings summary

Executive summary

• Q4 2024 net profit reached €1,116 million, up 29% quarter-on-quarter and 65% year-on-year, driven by strong banking and insurance results and a €318 million tax benefit from the exit from Ireland; FY2024 net profit was €3,415 million, stable year-over-year, with robust performance across all core markets.

• Return on equity for FY2024 was 15% (14% excluding one-offs), positioning the group among the most profitable EU financial institutions.

• Integrated bank-insurance model and digital-first strategy, including the AI-driven Kate platform with 5.3 million users and 70% query autonomy, drove customer engagement and operational efficiency.

• Sustainability efforts recognized by top-tier ESG ratings and inclusion in the CDP Climate A List for the third consecutive year.

• Board proposes a total gross dividend of €4.85 per share for 2024, with a pay-out ratio of approximately 51%.

Financial highlights

• Net interest income rose 3% quarter-on-quarter and 5% year-over-year in Q4 2024, reaching €1,433 million, with full-year net interest income at €5,574 million, exceeding guidance.

• Net fee and commission income hit a record €700 million in Q4, up 9% quarter-on-quarter and 17% year-over-year, with full-year income at €2,578 million.

• Insurance sales grew 8% year-over-year (9% FX-adjusted), with non-life combined ratio at 90% for FY2024 (88% excluding storm impact); life insurance sales surged 25% year-over-year.

• Operating expenses (excluding bank and insurance taxes) rose 6% quarter-on-quarter and 3% year-over-year; cost/income ratio for FY2024 at 47% (43% excluding all taxes).

• Loan loss impairment charges were €50 million in Q4, with a full-year credit cost ratio of 0.10%; impaired loans ratio at 2.0%.

• Fully loaded Basel III CET1 ratio at 15.0%, leverage ratio at 5.5%, insurance solvency ratio at 200%, LCR at 158%, and NSFR at 139%.

Outlook and guidance

• 2025 guidance: total income growth of at least 5.5%, net interest income of at least €5.7 billion, organic loan growth of ~4%, insurance income growth of at least 7%, and operating expense growth below 2.5%.

• Medium-term (2024–2027): CAGR of at least 6% for total income, 5% for net interest income, and 7% for insurance revenues; operating expenses CAGR below 3%.

• Combined ratio in non-life insurance targeted below 91%; credit cost ratio expected well below 25–30 bps.

• Basel IV implementation expected to increase RWA by €1 billion in 2025 and €8.5 billion by 2033.

• Guidance assumes conservative deposit mix shifts, with term deposit growth slowing and current/savings accounts regaining share.