Net interest income increased by 2% compared to the previous quarter and decreased by 1%
compared to the year-earlier quarter. The net interest margin for the quarter under review was
1.80%, up 1 basis point on the previous quarter and down 1 basis point on the year-earlier
quarter. Volumes continued to increase, with deposits excluding debt certificates growing by
1% quarter-on-quarter and 7% year-on-year, and loans up 2% quarter-on-quarter and 4% yearon- year. These figures were calculated on an organic basis (excluding the changes in the scope of consolidation and forex effects).

Technical income from our non-life insurance activities (premiums less charges, plus the
ceded reinsurance result) was down 18% and 23% on the level recorded in the previous and
year-earlier quarters, respectively, due essentially to higher technical charges consequent on
the heavy flooding in Belgium (with a gross impact 100 million euros). Non-life earned premiums went up 4% quarter-on-quarter and 8% year-on-year. The combined ratio for the first nine months of 2021 amounted to an excellent 87%. Sales of our life insurance products were down 7% on the level recorded in the previous quarter, but up 9% on the level recorded in the yearearlier quarter.


Net fee and commission income was up 4% on its level in the previous quarter and by as
much as 20% on the year-earlier quarter. In both cases, this was accounted for primarily by an increase in fees for our asset management activities and, to a lesser extent, higher fee income related to our banking services.


The trading & fair value result was in line with the previous quarter’s low figure and down 67% on the year-earlier quarter.

All remaining other income items combined were 67% and 84% higher than the figure
recorded in the previous and year-earlier quarters, respectively, thanks mainly to realised gains on the sale of bonds.


Costs increased 5% quarter-on-quarter and 11% year-on-year. In both cases, this was almost
entirely due to items such as forex effects, bank taxes, changes in the scope of consolidation
(OTP Banka Slovensko) and one-off items, including 81 million euros of staff-related costs in
Ireland in the quarter under review due to the pending sale transactions there. Excluding such
items, costs remained virtually stable. The resulting cost/income ratio for the first nine months
of 2021 amounted to 54%. In that calculation, certain non-operating items have been excluded and bank taxes spread evenly throughout the year. Excluding all bank taxes, the cost/income ratio amounted to 50% in the first nine months of 2021.


The quarter under review included a 66-million-euro net release of loan loss impairment,
compared to a net release of 130 million euros in the previous quarter, and a net charge of 52
million euros in the year-earlier quarter. The net release in the quarter under review was related to a significant reversal (260 million euros) of collective impairment previously recorded for the coronavirus crisis, which more than offset the one-off impairment of 170 million euros relating to the pending sale transactions in Ireland. As a consequence, the credit cost ratio in the first nine months of 2021 amounted to -0.20%, compared to 0.60% for full year 2020 (a negative sign implies a positive impact on the results).


Income taxes were up 43% quarter-on-quarter, due in part to the derecognition of deferred tax assets consequent on the pending sale transactions in Ireland.

Our liquidity position remained strong, with an LCR of 167% and NSFR of 153%. Our capital base remained equally as robust, with a fully loaded common equity ratio of 16.4% (under ECB rules, this does not include the interim profit for the interim quarters).
See the full press release in attachment.??
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https://newsroom.kbc.com/kbc-group-third-quarter-result-of-601-million-euros