IBOS member KBC has announced their financial results for Q3 2016, in a report released on 17 November 2016.
KBC has reported a strong net profit figure of €629 million in the third quarter of 2016, compared to the €721 million recorded in the preceding quarter and the €600 million returned in the third quarter of 2015. KBC’s lending volumes in the third quarter continued to grow, both quarter-on-quarter and year-on-year.
Added to the €392 million in net profit realised in the first quarter and the €721 million in the second, this brings KBC’s result for the first nine months of the year to €1,742 million, compared to €1,776 million for the same period a year ago. KBC’s already solid solvency and liquidity positions strengthened further.
Johan Thijs, Chief Executive of KBC, commented:
“We are grateful for the confidence our clients place in us and this yet again illustrates the success of our bank-insurance model. The third quarter was characterised by an attractive level of net interest income and net fee and commission income, stable operating expenses and the continuing low cost of credit.
We continue to invest in the future and are pro-actively rolling out our digitisation plans further in order to serve clients even better, while also keeping an eye on our cost/income ratio. Overall, we managed to generate a strong result of 629 million euros in this quarter.”
Below are the highlights of KBC’s third quarter 2016 results, compared with the previous quarter:
- Both of KBC’s banking and insurance franchises in our core markets and core activities continued to perform well.
- Lending to KBC’s clients was up by 0.4% with volumes going up in almost all countries. Deposits from our customers fell by 2% as increased deposits in the Czech Republic, Slovakia and Bulgaria could not fully offset the decreases in Belgium (maturing term deposits), Ireland and Hungary.
- Net interest income – KBC’s main source of income – was only marginally lower (less than 1%), thanks to support from lower funding costs, increased investments and credit volume growth. KBC’s average net interest margin stood at 1.90% in the third quarter, down 4 basis points quarter-on-quarter.
- The premium income earned on KBC’s non-life insurance products increased by 2%, while claims fell by 7%. Consequently, the non-life combined ratio for the first nine months of the year ended up at a good 94%. However, following a strong second quarter, sales of life insurance products declined by 20%.
- KBC’s total assets under management stood at 209 billion euros, slightly up (+1%) on the level of the previous quarter, thanks to a positive price performance. KBC’s net fee and commission income went up again, rising by 2% mainly on account of higher management fees.
- KBC’s operating expenses were down 1% on the previous quarter, due to lower bank taxes in the third quarter. The resulting cost/income ratio for the first nine months of the year stood at 57%.
- The cost of credit in the first nine months of the year amounted to an excellent, but still unsustainably low 0.07% of KBC’s loan portfolio.
- KBC’s liquidity position remained solid, and the bank’s capital base – with a common equity ratio of 15.1% (phased-in, Danish compromise) – remained well above the regulators’ target of 10.25% for 2016.
Access the full report, via KBC’s website, here.