KBC Group: Third-quarter result of 612 million euros

Press Release
Outside trading hours - Regulated information

Brussels, 14 November 2019, (07.00 a.m. CET)

KBC Group: Third-quarter result of 612 million euros

KBC Group - overview (consolidated, IFRS)	3Q2019	2Q2019	3Q2018	9M2019	9M2018
Net result (in millions of EUR)	612	745	701	1 787	1 948
Basic earnings per share (in EUR)	1.44	1.76	1.63	4.19	4,54
Breakdown of the net result by business unit (in millions of EUR)
Belgium	368	388	409	932	1 089
Czech Republic	159	248	168	584	484
International Markets	85	104	141	260	440
Group Centre	0	4	-17	10	-64
Parent shareholders’ equity per share (in EUR, end of period)	43.5	42.8	40.6	43.5	40.6

We generated a net profit of 612 million euros in the third quarter of 2019. Compared to the previous quarter, the quarter under review was characterised by higher net interest income and net fee and commission income, a virtually stable level of technical income from our insurance activities and a decrease in both costs and loan loss impairments. On the other hand, trading and fair value income was very weak due mainly to poor dealing room income, dividend income was seasonally lower and there was a significant drop in net other income. The latter development came about because the previous quarter had benefited from an 82-million-euro gain related to the acquisition of the remaining 45% stake in the Czech building savings bank, ČMSS.

Adding the third-quarter result to the 1 175 million euros recorded in the first half of the year brings our result for the first nine months of 2019 to a solid 1 787 million euros.

On a comparable scope basis, our loans to customers increased by 4% year-on-year and deposits (including debt certificates) were up by 4%, as well. Sales of our non-life and life insurance products also went up year-on-year, by 9% and 5%, respectively.

Our solvency position, which does not include the profit for the first nine months of the year, remained strong too, with a common equity ratio of 15.4%. If we had included the profit for the first nine months of the year, taking into account the 59% dividend payout ratio of last year, our common equity ratio would have amounted to 15.9%. As already announced and in line with our dividend policy, we will pay an interim dividend of 1 euro per share on 15 November 2019 as an advance payment on the total dividend for 2019.

In the previous quarter, we had started a group-wide exercise to optimise our management governance model and, in early September, revealed the optimisation and efficiency measures for the other layers of our organisation. The goal of the exercise is to become a more agile company with a faster decision-making process, so that customer solutions can be delivered faster. As always, we plan to be respectful in how we implement the related changes for our employees. In Belgium, for instance, the related reduction in FTEs will be absorbed through natural outflow. In the Czech Republic, normal staff turnover and measures to promote the internal redeployment of staff will ensure that compulsory redundancies will also be kept to a minimum. 

In September, we signed the Collective Commitment to Climate Action, an initiative of the United Nations Environmental Program Finance Initiative. By endorsing this initiative, we have committed ourselves – in cooperation with our customers – to stimulate the greening of the economy as much as possible and so limit global warming to well below 2°C, striving for 1.5°C, in line with the Paris climate agreement. In this way, we are building on previous policies and initiatives (such as phasing out the financing of coal-related activities) to help us fulfil our social role in a sustainable manner.

Ultimately, our goal is to ensure that our customers and all other stakeholders benefit from our activities, something which our employees are committed to in their day-to-day work. I would like to take this opportunity to explicitly thank all those stakeholders who have put their trust in us to help them achieve their goals and dreams.

Johan Thijs
Chief Executive Officer 

Full press release attached.

Attachments

• 3Q2019_pb_20191114_en
• 3Q2019_Quarterly_Report_en

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