IBOS member KBC has announced their financial results for the first quarter ended 31 March 2016, in a report released on 12 May 2016.
Both the banking and insurance franchises in KBC’s core markets and core activities performed well. More loans were again granted in Belgium (+1% in just one quarter), the Czech Republic (+3%), Slovakia (+2%) and Bulgaria (+2%), while clients further increased their deposits in most of KBC’s countries: Belgium (+3%), the Czech Republic (+1%), Slovakia (+6%) and Ireland (+4%).
Net interest income was slightly up thanks to rate cuts, volume growth and lower funding costs and despite the environment of low interest rates and a certain amount of pressure on loan margins. The net interest margin has edged up quarter-on-quarter (from 1.95% to 1.96%).
Sales of non-life insurance products across almost all KBC markets were up, and the non-life combined ratio stood at 91% year-to-date, significantly impacted by the claims due to terrorist attacks in Brussels. Excluding these claims, the combined ratio stood at an excellent 82%. Aggregate sales of life products increased.
Clients continued to entrust their assets to KBC, but the markets performed poorly, causing total assets under management of the group to fall slightly to 207 billion euros. The overall net fee and commission income dropped by 7%, due mainly to lower management fees stemming from a more cautious investment allocation.
Excluding the 335 million euros in bank taxes heavily influencing the financial result, costs were down by 7%. The cost/income ratio stood at 71% year-to-date, due to bank taxes being booked upfront. After evenly spreading the bank taxes and excluding exceptional items, the cost/income ratio came to 57%. The cost of credit amounted to an unsustainably low 0.01% of our loan portfolio.
KBC’s core strategy remains focused on providing bank-insurance products and services to retail, SME and mid-cap clients in Belgium, the Czech Republic, Slovakia, Hungary and Bulgaria.
Johan Thijs, KBC group CEO, said:
“Our goal is to ensure that our clients, shareholders and other stakeholders benefit from our activities, something which all our employees are committed to working towards. For 2016, we are focusing entirely on the further development of our bank-insurance business and on supporting the local economies and clients in the countries in which we operate. We are continuing to invest in the future and to pro-actively roll out our financial technology plans so we can serve our clients even better going forward. The continuing low level of interest rates as well as the volatility on the financial markets present a challenge for the entire financial sector. However, our bank-insurance model, supported by a solid liquidity and capital base, allows us to generate sustainable results.”
Access the full report here.