KBC Group (KBC) stock down on lower earnings
By Jenni Reid
13:55, 12 November 2021
Belgian bank-insurer KBC Group saw its share price dip on Friday as profits fell, despite a slight rise in income over the previous quarter.
Total income rose from €1.85bn in the second quarter to €1.88bn in the third, but was down from €1.87bn in the third quarter of 2020.
However, overall profit after tax was €601m, down from €793m the previous quarter and €697m in the same period the previous year. Basic earnings per share were €1.41, down from €1.64 a year ago.
KBC’s share price was down 3.51% at 15:20 CEST to €82.74.
The company said income rises helped offset a lower non-life insurance result, which was hit by recent severe flooding in Belgium.
Operating expenses increased by 5% quarter on quarter and 11% year on year, which the company said was due to a combination of forex effects, bank taxes, changes in the scope of consolidation and one-off items such as its withdrawal from the Irish market.
At the end of August, the company reached an agreement to dispose of substantially all the non-performing mortgage loan portfolio of KBC Bank Ireland.
In October, KBC announced plans to sell its performing loan assets and deposits in Ireland to Bank of Ireland for a total consideration of roughly €5bn.
It has said it is leaving the market due to the “challenging operational context for European banks”, which has seen many banks struggle with profitability amid high competition and persistently low interest rates.
Third-quarter results showed its Belgian business contributed €603m and the Czech Republic contributed €209m, while international markets lost €158m.
The company affirmed an interim dividend of €3 per share to be paid on 17 November, with €2 per share for the financial year 2020 and €1 per share as an advance on the total dividend for financial year 2021.
It maintained full-year net interest income guidance at €4.4bn and said operating expenses would be around 2% higher.
It adjusted its credit cost ratio forecast to around -10 basis points and reaffirmed the impact of Basel 4 – an upcoming series of standards reforms for banks – at €8bn.
Read more: Bank of Ireland to buy KBC’s Irish loan book in €5bn deal