Q4 2024 KBC Group NV Earnings Call - Pre-recorded

[music] good morning, everyone at KBC group recorded a net profit of 1.116 billion euros in the last quarter of 2024.

Back to the result for the third quarter. Our total income benefited from several factors, including higher net interest income increased insurance revenues and sharply higher net fee and commission income driven by an excellent business performance. This clearly illustrates the benefit of our one stop shop customer off.

<unk> two hour income diversification.

These items were partly offset by a decrease in trading and fair value income and lower net other income.

Our loan portfolio continued to expand increasing by 2% quarter on quarter and by 5% year on year.

Customer deposits, excluding volatile low margin short term deposits at KBC banks foreign branches were up 2% quarter on quarter and 7% year on year.

With the latter figure benefiting from the successful return of customer funds. After the Belgium state notes that matured in the third quarter.

Operational expenses were up in the quarter under review, but remain perfectly within our full year 2020 for guidance.

Insurance service expenses were lower as the previous quarter had been impacted by storms and floods in central Europe, especially storm Boris.

Loan loss impairment charges, excluding the reserve for geopolitical and macroeconomic uncertainties, we're down on the level recorded in the third quarter, leading to a credit cost ratio of 16 basis points for full year 2024, well below our guidance figure.

Including the reserve for geopolitical and macroeconomic uncertainties the credit cost ratio stood at 10 basis points for full year 2024.

We also recorded a one off tax benefit of 318 million euros in the quarter under review.

Due to the forthcoming liquidation of KBC Bank Ireland.

Consequently, when adding up the four quarters of the year, our full year net profit amounted to an excellent 3.415 billion euros slightly up year on year.

On the sustainability front, we are proud to be included for the third consecutive year in the CDP climate a list.

This recognition highlights kbc's, leading role and climate related disclosures.

Our solvency position remains strong with a fully loaded common equity tier one ratio of 15% at the end of December 2024.

Our liquidity position remains very solid too as illustrated by an LCR ratio of 158% and as of our ratio of 139%.

Our board of directors has decided to propose a total gross dividend of $4 85 euros per share to the general meeting of shareholders for the accounting year 2024.

That amount includes set of points 70 euro per share already paid in May 2024, reflecting the surplus capital above the 15% fully loaded CET one threshold for end 2023.

And four point 15, Eurosport sure of which an interim dividend of one euro per share already paid in November 2024, and the remaining three points 15 euros per share to be paid in May 2025.

When including the proposed dividend of four point 15, Eurosport Shea and additional tier one coupon the pay out ratio would amount to approximately 51% of 'twenty 'twenty four net profit.

Lastly, we have also updated our three year financial guidance between 'twenty 'twenty, four and 'twenty 'twenty seven we are aiming to achieve a compound annual growth rate of at least 6% for total income and a compounded annual growth rate of below 3% for operating expenses.

Excluding bank and insurance taxes.

Furthermore, we also want to achieve a combined ratio of maximum 91%.

In closing I wish to sincerely. Thank all our employees for their contribution to our group's continued success.

Also like to thank all our customers shareholders and all other stakeholders for their continued trust and support and assure them that we remain committed to being the reference in bank insurance innovation and digitalization in all our home markets.

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