KBC Group: First-quarter result of -5 million euros

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Algemeen advies 14/05/2020 08:28
KBC Group – overview (consolidated, IFRS) 1Q2020 4Q2019 1Q2019
Net result (in millions of EUR) -5 702 430
Basic earnings per share (in EUR) -0.04 1.66 0.98
Breakdown of the net result by business unit (in millions of EUR)
Belgium -86 412 176
Czech Republic 88 205 177
International Markets 35 119 70
Group Centre -43 -33 7
Parent shareholders’ equity per share (in EUR, end of period) 43.8 45.3 43.1

‘In the quarter under review, we were confronted with the outbreak and spread of the coronavirus, the long-term impact of which on the
economy remains quite uncertain at this moment in time. As an employer and service provider, we reacted quickly to try to safeguard
the health of our staff and clients, while ensuring that services continue to be provided. As many staff as possible are working from
home and we are providing our clients with advice through a wide range of phone and digital channels. We have been working hard
with government agencies of our core countries to support all customers impacted by coronavirus by processing loan deferral requests
promptly, and efficiently instituting other relief measures. We are clearly benefiting from the efforts and investments we have made over
the past few years on the digital transformation front. These efforts and investments, along with the expertise and motivation of our
employees in all our home countries and the strength of our multichannel distribution network, allow us to provide our customers with a
level of service that is very close to pre-coronavirus crisis levels.
As regards our financial results, we incurred a net loss of 5 million euros in the first quarter of 2020, caused mainly by the impact of the
worldwide coronavirus outbreak on our trading and fair value result and the upfront booking of bank taxes.
In the quarter under review, our trading and fair value result came to a negative 0.4 billion euros, as a result of a number of marketdriven
factors, such as sharply lower stock markets, widening credit spreads and lower long-term interest rates.
The impact of the coronavirus crisis on the other profit and loss lines in the quarter under review was less pronounced. Compared to
the year-earlier quarter, our core income lines, i.e. net interest income, net fee & commission income and the technical insurance result,
performed quite well. Costs were kept well under control, too. They decreased slightly year-on-year after excluding the impact of the
consolidation of ?MSS, bank taxes (the bulk of the full-year amount of these taxes is usually recorded in the first quarter) and some
one-off items. Loan loss provisions increased in the quarter under review and included an additional 43 million euros specifically related
to the coronavirus crisis, based on our exposure to sectors we believe will be affected most by the crisis. For full-year 2020, we estimate
impairments to amount to roughly 1.1 billion euros (base scenario).
Generally speaking, volumes held up well year-on-year: on a comparable scope basis, loans and advances increased by 6%, deposits
by 5% and earned non-life insurance premiums by 7%. On the other hand, sales of life insurance products fell by 17% year-on-year.
Our solvency position remained very strong, with a common equity ratio of 16.3% on a fully loaded basis, well above the current minimum
capital requirement of 8.05%. This minimum requirement takes into account the various announced ECB and National Banks’ measures
which have provided significant temporary relief on the minimum capital requirements. Our liquidity position remained solid too, with an
LCR of 135% and an NSFR of 134% at the end of March 2020. We are especially pleased that the hard work in recent years has paid
off in making our group strong and healthy. As a result, our current capital and liquidity buffers allow us to face today's challenges with
Ultimately, our goal remains the same: to ensure that our customers are at the centre of everything we do, something which our
employees are committed to in their day-to-day work. I wish to express my utmost appreciation to all colleagues who have expended
huge efforts to serve our customers and support the sound functioning of the group from home offices and other
remote locations. In closing, I would also like to take this opportunity to explicitly thank all those stakeholders who
have – in these challenging times - continued to put their trust in us.’
Johan Thijs
Chief Executive Officer

see &

tijd 17.35.00 gesloten KBC EUR 40,80 -3,50 vol. 1.559.981

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