KBC Group: Third-quarter result of 601 million euros

Press Release
Outside trading hours – Regulated information*

Brussels, 12 November 2021 (07.00 a.m. CET)

KBC Group: Third-quarter result of 601 million euros

Early in the third quarter, Belgium was confronted with the devastating consequences of heavy flooding in a number of provinces. We would once again like to express our heartfelt sympathy to everyone directly affected, as well as our deep appreciation to all the relief workers and volunteers who have been working tirelessly on behalf of the victims. We fully support the agreement reached following the talks held between Assuralia (the federation of the Belgian insurance sector) and the authorities, which provides greater security for all victims. Over the past few months, we have been using all our knowledge and expertise � via our broad network of insurance agents, experts and repairers – to ensure that the claims of the customers affected are settled quickly and properly. At the same time, the coronavirus crisis is still high on the agenda. In many countries, the large-scale rollout of vaccines is well under way or even in its final stages. Social life is gradually resuming, but caution is still paramount, as the virus is certainly not beaten yet. From the start of this crisis, we have taken responsibility in safeguarding the health of our staff and customers, while ensuring that services continue to be provided. We have also worked closely with government agencies to support all customers impacted by the coronavirus, implementing various measures such as loan payment holidays.

Over the past few months, we have signed a number of transactions that either strengthened or adjusted our geographic focus. At the end of July, for instance, we strengthened our share of the Bulgarian market by acquiring NN’s Bulgarian pension insurance and life insurance businesses. And at the end of August, we reached an agreement to dispose of substantially all of the non-performing mortgage loan portfolio of KBC Bank Ireland. More recently, we also entered into a legally binding agreement relating to the sale of substantially all of KBC Bank Ireland’s performing loan assets and its deposit book to Bank of Ireland Group. A small portfolio of non-performing mortgages will also be sold as part of that transaction. The transaction remains subject to regulatory – including Irish competition – approvals. The immediate one-off P&L impact in the third quarter of these Irish transactions amounted to -0.3 billion euros after tax, while there will be a positive impact of approximately 0.2 billion euros upon closure. The finalisation of both deals will ultimately lead to KBC withdrawing from the Irish market and will have a positive impact on our common equity ratio of approximately 0.9 percentage points.

Profit amounted to 601 million euros in the quarter under review, despite 319 million euros negative one-off impact related to the pending sale transactions in Ireland. Total income went up quarter-on-quarter, as higher net interest income, net fee and commission income and net other income more than offset the lower non-life insurance result (which had been negatively impacted by the floods in Belgium) and the seasonally lower level of dividend income. Excluding one-off and non-operating items (including forex effects and bank taxes), costs remained virtually stable quarter-on-quarter. Loan loss impairment contributed positively to the result, as the reversal of previously recorded impairment charges for the coronavirus crisis more than offset the negative impact on impairment of the pending sale transactions in Ireland. As announced earlier, we will pay an interim dividend of 3 euros per share on 17 November 2021, comprising 2 euros per share for financial year 2020 and 1 euro per share as an advance on the total dividend for financial year 2021.

Lastly, I would like to say a few words about our mobile app. In September, KBC Mobile was crowned best mobile banking app in the world by independent international research agency, Sia Partners. This is a clear recognition of 10 years of innovation, development and carefully listening to our customers. The Digital First approach we launched a year ago is clearly paying off and demonstrates the innovative strength we can harness as a group, with the ultimate goal of making our customers’ lives easier.

I would also like to take this opportunity to explicitly thank our customers and all other stakeholders for the trust they continue to put in us.

Johan Thijs
Chief Executive Officer

Full press release attached

Attachments

• 3q2021-quarterly-report-en
• 3q2021-pb-en