KBC’s profit falls less than expected

(ABM FN) KBC posted better-than-expected second-quarter earnings, according to quarterly figures released by the bank on Thursday.

“In short, our overall performance in the first half of 2024 was once again excellent,” CEO Johan Thies said in a statement on Thursday. Revenues were good and costs were “significantly” reduced, the CEO said.

In the second quarter of 2024, KBC recorded a net profit of EUR 925 million, compared to EUR 966 million in the same quarter last year.

This exceeded analysts’ expectations.

The consensus assumes a net profit of €864 million.

Profits were also much higher than the €506 million recorded in the first quarter of this year.

Earnings per share decreased slightly to €2.25 compared to €2.29 in the same period last year.

If the results of the first and second quarters are combined together, the net profit for the first half of 2024 amounts to EUR 1.43 billion.

At first glance, this is significantly lower than the €1.85 billion result in the same period last year, but this includes a one-off positive gain of €0.4 billion from the sale of Irish loan and deposit portfolios.

If this one-time item is not included, the bank’s half-year earnings are in line with last year’s first-half earnings.

Net interest income, a key market figure, rose 1 percent quarter-on-quarter but fell 2 percent year-on-year to €1.38 billion.

For the second quarter of 2023, net interest income amounted to EUR 1.41 billion, and for the first quarter of the current year, EUR 1.37 billion.

Analysts had expected €1.36 billion.

The net interest income forecast for fiscal 2024 was raised on Thursday to around 5.5 billion euros, compared with a previous target of between 5.3 billion and 5.5 billion euros.

The consensus assumes interest income of €5.48 billion for 2024.

KBC also reported that commission income increased, both on a quarterly and annual basis.

In the quarter under review, a net loan impairment of €72 million was recorded on Thursday, compared to €16 million in the previous quarter and a net write-off of €23 million in the same quarter last year.

In accordance with the general dividend policy, KBC will pay an interim dividend of EUR 1.00 per share in November 2024 as an advance on the total dividend for the financial year 2024.

The solvency position remained strong, with the fully loaded common equity ratio at 15.1% at the end of June 2024.

KBC Insurance’s solvency ratio under the Solvency II framework was 200 percent.

The liquidity position also remained very strong, as evidenced by the liquidity coverage ratio of 160% and the net stable funding ratio of 139%.

Source: ABM Financial News

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