KBC Group: Fourth-quarter result of 677 million euros
Press Release
Outside Outside trading hours - Regulated information
Brussels, 8 February 2024, 7.00 a.m. CET
‘We recorded a net profit of 677 million euros in the last quarter of 2023. Compared to the result of the previous quarter, our total income benefitted from several factors, including better net fee and commission income and higher net other income, though these items were offset by a lower level of net interest income and lower insurance results. Costs, including bank and insurance taxes, were up quarter-on-quarter, as were impairment charges, driven mainly by an impairment of 109 million euros on goodwill on building savings company ČSOBS (a subsidiary of ČSOB Bank) in the Czech Republic and approximately 53 million euros impairment charges on software. Consequently, when adding up the four quarters of the year, our full-year net profit amounted to 3 402 million euros, up 21% year-on-year.
Our loan portfolio continued to expand, increasing by 1% quarter-on-quarter and by 3% compared to a year ago, with growth being recorded in each of the group’s core countries. Customer deposits were up 1% on the level of the previous quarter but down 3% year-on-year, as they were largely affected by deposit outflows caused by the issuance of a retail State Note (‘Staatsbon’) in Belgium at the start of September 2023.
On the sustainability front, we are delighted to note that the outside world is continuing to recognise our approach and achievements as ‘best in class’. In particular we note that renowned ESG Risk agency Sustainalytics has awarded KBC the excellent ‘ESG negligible risk rating category’. With this rating, KBC is included in the Sustainalytics 2024 ESG Top-Rated Companies List. We are equally proud to have received the coveted CDP A rating for our climate-related disclosures for a second year in a row.
As regards our ongoing share buyback programme of 1.3 billion euros, we had already bought back approximately 11 million shares for a total consideration of around 0.6 billion euros by the end of January 2024. The programme is planned to run until 31 July 2024.
Our solvency position remained strong, with a fully loaded common equity ratio of 15.2% at the end of December 2023, which already fully incorporates the effect of the ongoing share buyback programme of 1.3 billion euros. Our Board of Directors has decided to propose a total gross dividend of 4.15 euros per share to the General Meeting of Shareholders for the accounting year 2023 (of which an interim dividend of 1.0 euro per share was already paid in November 2023 and the remaining 3.15 euros per share is to be paid in May 2024). Including the proposed total dividend and additional tier-1 coupon, the pay-out ratio would amount to 51%. In line with our announced capital deployment plan for full-year 2023, the distribution of the surplus capital above the fully loaded common equity ratio of 15% will be decided at the discretion of the Board of Directors of KBC Group in the first half of 2024.
Lastly, we have also updated our three-year financial guidance. By 2026, we are aiming to achieve a cost/income ratio (excluding bank and insurance taxes) of below 42% and a combined ratio of maximum 91%.
In closing, I would like to sincerely thank all customers, employees, shareholders and all other stakeholders for their trust and support, and assure them that we remain committed to being the reference in bank-insurance and digitalisation in all our home markets.’
Johan Thijs,
Chief Executive Officer
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