Kbc Group N.v. · EURONEXT:KBC
Kbc — H1 2022 Earnings Presentation
36 slides from Kbc's earnings presentation, 2022
Slide 1: KBC Group Press presentation 2Q and 1H 2022 results
KBC Group Press presentation Johan Thijs, KBC Group CEO 2Q and 1H 2022 results Luc Popelier, KBC Group CFO More infomation: www.kbc.com KBC Group - Investor Relations Office - Email: IR4U@kbc.be 1
Slide 2: Important information for investors
Important information for investors This presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by the KBC Group. KBC believes that this presentation is reliable, although some information is condensed and th
Slide 3: 2Q 2022 key takeaways
2Q 2022 key takeaways Commercial bank-insurance franchises in core markets performed excellently Customer loans and customer deposits increased y-o-y in all 1H22 ROE 15%1 our core countries (on a comparable basis) Cost-income ratio excluding bank taxes 47% Substantially all previously dete
Slide 4: 2Q 2022 performance of KBC Group
KBC Group 2Q 2022 performance of KBC Group 4
Slide 5: Overview of building blocks of the 2Q22 net result
Overview of building blocks of the 2Q22 net result 793 811 2.123 97 -94 458 89 238 2Q21 1Q22 2Q22 -976 451 1.248 -28 -2 -211 811 NII NFCI Technical FIFV Other Total Income Bank taxes Opex excl. Impairments Other Income taxes 2Q22 Net Insurance Income** bank tax Result Result* Q-o-Q +4% -6% +3% 0% -3
Slide 6: Net result per business unit
Net result per business unit Excellent contribution from all business units BE BU CZ BU IM BU q-o-q q-o-q q-o-q 603 564 Bulgaria Hungary 528 Ireland Slovakia 486 140 30 237 13 33 56 209 207 74 198 29 17 52 75 62 168 46 35 30 227 22 29 18 22 28 -6 -37 -282 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22
Slide 7: Net interest income
Net interest income Higher net interest income (NII) and stable net interest margin (NIM) Net Interest Income NII increased by 4% q-o-q and 14% y-o-y, driven primarily by: 1 200 1 248 1 094 (+) strong organic loan & deposit volume growth, increasing reinvestment yield in 28 23 100 112 euro-denominat
Slide 8: Net fee and commission income
Net fee and commission income Lower net fee and commission income q-o-q, but stable y-o-y Net fee and commission income Net fee and commission income down by 6% q-o-q and stable y-o-y Q-o-q decrease was mainly the result of the following: Net F&C income from Asset Management Services decreased by
Slide 9: Non-life insurance
Non-life insurance Non-life premium income up y-o-y and excellent combined ratio Non-Life (Gross earned premiums) Y-o-y increase of gross earned premium Non-Life by +9% in 2Q22 463 487 503 2Q21 1Q22 2Q22 The non-life combined ratio for 1H22 amounted to an excellent 85% (82% Combined ratio non-life i
Slide 10: Life insurance
Life insurance Life sales down q-o-q and y-o-y Life sales Sales of life insurance products Decreased by 22% q-o-q due mainly to lower sales of unit- 544 linked products and guaranteed interest products in Belgium 494 Decreased by 14% y-o-y due mainly to: 426 a decrease of sales of unit-linked
Slide 11: Net result from financial instruments at fair value
Net result from financial instruments at fair value Decrease of net result from financial instruments at fair value (following an extremely strong 1Q22) Fair value result The q-o-q decrease in FIFV was attributable mainly to: significantly lower dealing room and other income (as 1Q22 was extremely
Slide 12: Net other income
Net other income Net other income sharply above normal run rate Net other income Net other income amounted to 90m EUR sharply higher than the normal run rate of around 50m EUR per 90 quarter included a one-off 68m EUR realised gain on the sale of real estate 54 subsidiary at KBC Insurance, whi
Slide 13: Operating expenses
Operating expenses Costs excluding bank taxes decreased q-o-q FY21 1H22 Operating expenses Cost/Income ratio (group)* 55% 53% 1 520 Operating expenses excluding bank taxes went down by 3% q-o-q and increased by 4% y-o-y: 514 The q-o-q decrease is due mainly to the extraordinary staff bonus and a
Slide 14: Operating expenses
Operating expenses Overview of bank taxes* Bank taxes of 608m EUR YTD. On a pro rata basis, bank taxes Bank taxes of 350m EUR YTD. represented 14.3% of 1H22 BELGIUM BU KBC GROUP opex at KBC Group On a pro rata basis, bank taxes represented 13.7% of 1H22 354 514 311 opex at the Belgium BU 99 424 154
Slide 15: Asset impairments
Asset impairments Small net loan loss impairment charges and excellent credit cost ratio Asset impairment (negative sign is write-back) Net impairment charges Net loan loss impairment charges of 9m EUR in 2Q22 (compared with 15m 22 EUR releases in 1Q22) due to: Only 1m EUR loan impairment charge
Slide 16: Outstanding ECL for geopolitical, emerging and covid risks
Outstanding ECL for geopolitical, emerging and covid risks Stable buffer q-o-q Q-o-q change in the outstanding ECL for geopolitical, emerging and Covid risks Q-o-q -5m At the end of 2Q 2022, the ECL for geopolitical and emerging risks amounted 273 268 to 268m EUR and included an impairment release
Slide 17: Update on the Russia/Ukraine conflict (including emerging risks)
Update on the Russia/Ukraine conflict (including emerging risks) Estimated outstanding ECL A No No direct direct subsidiaries subsidiaries KBC has no direct subsidiaries in Russia (R), Belarus (B) or Ukraine (U) Direct transfer risk exposure amounts to approx. 35m EUR (-20m q-o-q) B Very limited dir
Slide 18: Diversified loan portfolio
Diversified loan portfolio Total loan portfolio outstanding by sector Total loan portfolio outstanding as a % of total Group portfolio outstanding(1) by segment(1) 197bn EUR(2) Corporate 35.3% 43.5% Retail Mortgages 40.3% Consumer Finance 3.2% Retail 21.2% Services 10.0% SME Distribution 7.8% Real E
Slide 19: Balance sheet: loans and deposits growth
Balance sheet: Loans and deposits continue to grow in most countries 17% 13% 12% 9% 8% BE 2% Loans** Retail Deposits*** Loans** Retail Deposits*** Y-O-Y ORGANIC* VOLUME GROWTH mortgages mortgages 19% 9% 9% 9% 7% 7% 14% 5% CR 11% 4% Loans** Retail mortgages Deposits*** Loans** Retail Deposits*** Loan
Slide 20: Strong solvency and solid liquidity
KBC Group Strong solvency and solid liquidity 20
Slide 21: Common equity ratio
Common equity ratio Strong capital position Fully loaded Basel 3 CET1 ratio at KBC Group (Danish Compromise) The fully loaded common equity ratio amounted to 15.9% at the end of 1H22 based on the Danish Compromise. • The q-o-q increase in 2Q22 is mainly related to interim profit recognition (based
Slide 22: Liquidity ratios
Liquidity ratios Liquidity continues to be very solid KBC Group’s liquidity ratios NSFR* LCR** 148% 142% 167% 158% Regulatory Requirement ≥ 100% FY21 1H22 FY21 1H22 NSFR is at 142% and LCR is at 158% by the end of 1H22 • Both ratios were well above the regulatory requirement of 100% due to a stron
Slide 23: Looking forward
KBC Group _Z Looking forward Diffeverdty THE NEXT LEVEL 2. 23 KBC
Slide 24: Looking forward
Looking forward In 2Q22, both in Belgium and in the Czech Republic economic growth slowed, but remained positive at +0.2% q-o-q. For the second half of 2022, we expect the war in Ukraine to impact the European economy more severely than its US counterpart. Therefore, an economic stagnation in the
Slide 25: Differently: the next level
Differently: the next level 3-year and long-term financial guidance 3-year financial guidance* CAGR total income (‘21-’24) CAGR OPEX excl. bank taxes (’21-’24) + 7.0% + 3.0% by 2024 by 2024 } ⇒ Jaws of ± 4% (instead of 3% earlier guided) ⇒ C/I ratio excl BT ±46% in 2024 Combined ratio ≤ 92% as of no
Slide 26: We put our clients centre stage
We put our clients centre stage as they keep counting on us to help them realise and protect their dreams. We do this proactively and work together to support the society and create sustainable growth. We are genuinely grateful for the confidence they put in us. Particularly in these challenging tim
Slide 27: Annex
KBC Group Annex 1 Differently: the next level 27
Slide 28: KATE
KATE Kate4MassRetail Kate4Business Kate is a personal virtual assistant that engages with our Kate will also engage with our SME and corporate retail customers to save them time and money. clients with relevant and actionable insights that are Kate engages both in a reactive way (You2Kate) and a per
Slide 29: KBC is becoming a data-driven organisation with KATE at the core
KBC is becoming a data-driven organisation with KATE at the core Kate is more than an interface towards customers. It also refers to the AI-enhanced software at our center: the Kate brain. The Kate brain will be the driving force behind data-driven decision making, product design and development, ma
Slide 30: Translating strategy into non-financial targets (1)
Differently: THE NEXT level Translating strategy into non-financial targets Update on our 4 operational targets (1) Customer NPS ranking % bank-insurance (BI) clients Top-3 85% Top-2 77% 78% Top-2 22% 23% 27% 2020 2021* target '23 2020 BI 2021 BI target '23 2020 2021 target '23 KBC is 3rd in custo
Slide 31: Translating strategy into non-financial targets (2)
Differently: THE NEXT level Translating strategy into non-financial targets Update on our 4 operational targets (2) % digital sales STP score* (bank / insurance) (straight through processing) 40% 39% 32% 25% 80% 60% 49% 19% 33% 41% 15% 25% 2020 2021 target 2020 2021 target 2020 2021 target '23 2020
Slide 32: KBC Group Passport: ESG ratings and indices
KBC Group Passport ESG ratings and indices – Ahead of the curve Agencies ESG rating of 25th of July 2022 (previous score) Position versus industry average D- A • Financial services average B A- (A-) Severe Risk High Risk Medium Risk Low Risk Negligible Risk • 3rd percentile of 415 diversified banks
Slide 33: Our sustainability roadmap
Our sustainability roadmap KBC milestones and initiatives Equator Principles Joined the UN Global compact and We have been a signatory to the Equator Principles (Eps) published first sustainability report over FY 2005 since 2004 and have integrated them in our lending policy of project finance 2006
Slide 34: Strong progress on Environmental, Social and Governance issues
Strong progress on Environmental, Social and Governance issues Some latest highlights ESG ESG ESG Environmental Social Governance All remaining direct coal exposure has been 31bn EUR in Responsible Investing Top level responsibility for phased out in line with our commitment funds sustainabili
Slide 35: Our sustainability ambitions
Our sustainability ambitions We substantially raise the bar for our climate-related ambitions Achieved Achieved Volume of Responsible Renewable energy loans Investing Funds(*) (In % of total energy sector loan portfolio) (In billions of EUR) 32 66% 31 30 61% 63% 65% 57% 44% 17 58% 12 56% 9 55% 40% 3
Slide 36: KBC
36 KBC