Kbc Group N.v. · EURONEXT:KBC
Kbc — Debt Investor Presentation (2024)
47 slides from Kbc's debt investor presentation, 2024
Slide 1: KBC Group Debt presentation 1Q 2024
1 of 47 KBC Group Debt presentation 1Q 2024 More information: www.kbc.com KBC Group - Investor Relations Office: IR4U@kbc.be
Slide 2: KBC Group passport | Well-defined core markets
KBC Group passport | Well-defined core markets 2 of 47 BELGIUM BU debt to INTERNATIONAL MARKETS BU GDP ratio GDP growth 105% SK HU BG in %, KBC Economics 61% of assets 4% of assets 4% of assets 5% of assets 4.0m clients 0.8m clients 1.6m clients 2.2m clients 432 branches 1.5% 99 branches 195 branche
Slide 3: What differentiates us from peers
What differentiates us from peers 3 of 47 Unique integrated Successful digital-first Firmly embedded Core shareholder bank-insurance+ model approach through KATE sustainability strategy structure • We offer an integrated response • Our Digital interaction with clients • As a company that aims to sup
Slide 4: KBC Group's legal structure and issuer of debt instruments
KBC Group’s legal structure and issuer of debt instruments 4 of 47 KBC Group NV AT 1 Tier 2 MREL Senior 100% 100% 100% 100% KBC Bank KBC Insurance KBC Global Services N.V. DISCAI* Covered bond No public issuance KBC IFIMA** Retail and Wholesale EMTN * DISCAI (Discovering AI) is a separate full
Slide 5: Last credit ratings
Last credit ratings 5 of 47 Moody’s S&P Fitch Senior Unsecured Baa1 A- A Latest update: Tier II Baa2 BBB BBB+ 6 June 2023: Moody’s upgraded KBC Bank's long-term issuer and deposit ratings and affirmed KBC Group's issuer rating (outlook Group Additional Tier I Ba1 BB+ BBB- remains positive). The upgr
Slide 6: KBC's ESG ratings and indices are ahead of the curve
KBC’s ESG ratings and indices are ahead of the curve 6 of 47 Agency ESG rating 23rd of April 2024 Position versus industry average D- A • Leader in addressing climate change • CDP’s A list A • Financial average service B- Severe Risk High Risk Medium Risk Low Risk Negligible Risk • 2nd percentile of
Slide 7: Business profile | Our financial footprint
Business profile | Our financial footprint 7 of 47 High profitability (IFRS 17 figures) Solid capital position combined CET 1 ratio (fully loaded, Danish compromise) C/I ratio* ratio net result in % 43% FY23 87% FY23 3,402m FY23 16.3% 17.1% 17.6% 2,818m FY22 15.8% 16.0% 15.5% 15.3% 45% FY22 15.2% 87
Slide 8: New KBC's non-financial targets (2023-2026)
New KBC’s non-financial targets (2023-2026) 8 of 47 Customer ranking Bank-insurance (BI) clients Digital sales BI clients Digital sales banking products* TARGET in % in % TARGET TARGET Top-3 Top-2 77% 83% 65% 2023 2026 52% • KBC is 3rd in customer NPS (Net Promoter Score) ranking 2023 2026 2023 2026
Slide 9: Sustainability highlights
Sustainability highlights 9 of 47 Commitment to environmental action Sustainable business Social responsibility and governance 44bn EUR Responsible Investing Social bond Second progress report published on Issued a second social bond for the 2030 and 2050 climate targets funds in 1Q24 or 41% of tota
Slide 10: Excellent net result of 506m EUR over 1Q24
Excellent net result of 506m EUR over 1Q24 10 of 47 Highlights Net result • Commercial bank-insurance franchises performed excellently in m EUR • As policy rates have peaked, KBC Group is well-positioned 966 being an integrated bank-insurer with tailored AM business 882 877 • Customer loans and cust
Slide 11: Higher net interest income
Higher net interest income 11 of 47 Net interest income Net interest margin* in m EUR in %, calculated excluding dealing room, ALM FX swaps & repos 1,407 1,382 1,360 1,369 1,324 106 96 98 95 Insurance 92 2.04% 2.11% 2.04% 1.99% 2.08% 1,301 Banking 1,232 1,286 1,261 1,274 (incl. Holding) 1Q23 2Q23 3Q
Slide 12: Inflow of core customer money
Inflow of core customer money 12 of 47 Customer money dynamic over 1Q24 in m EUR +2.0bn EUR +1.9bn EUR +1.2bn EUR -1.5bn EUR -3.2bn EUR +3.7bn EUR -0.3bn EUR 31DEC23 foreign branches FX impact current accounts savings accounts term deposits mutual funds 31MAR24 • 1Q24 saw an inflow of core customer
Slide 13: Higher net fee and commission income
Higher net fee and commission income 13 of 47 Net fee & commission income Assets under management in m EUR in bn EUR 588 600 614 258 576 584 244 12 12 15 Other 227 10 11 217 225 Investment 59 55 advice 261 Banking services 42 46 49 262 262 268 265 68 71 Fund-of-Funds 63 65 64 Group assets & 21 21 20
Slide 14: Non-life sales up y-o-y, life sales significantly up q-o-q and y-o-y
Non-life sales up y-o-y, life sales significantly up q-o-q and y-o-y 14 of 47 Non-life sales Life sales in m EUR in m EUR 765 727 33 Hybrid products 32 685 36 Guaranteed- 667 730 577 558 549 218 261 Interest products 477 297 31 438 1Q23 2Q23 3Q23 4Q23 1Q24 32 • Up by 9% y-o-y, with growth in all cou
Slide 15: FIFV & IFIE result down q-o-q and net other income slightly above normal run rate
FIFV & IFIE result down q-o-q and net other income slightly above normal run rate 15 of 47 FIFV & IFIE Net other income in m EUR in m EUR 1Q23 2Q23 3Q23 4Q23 1Q24 Dealing room 94 69 47 78 102 MVA/CVA/FVA 4 5 17 -41 5 498 IFIE – interest -50 -53 -56 -59 -60 accretion M2M ALM derivatives -24 13 -17 -1
Slide 16: Costs excluding bank & insurance taxes decreased q-o-q
Costs excluding bank & insurance taxes decreased q-o-q 16 of 47 Operating expenses (including costs directly attributable to Bank and insurance tax spread 2024 (preliminary) insurance) in m EUR in m EUR Total Upfront Spread out over the year 1,648 1Q24 1Q24 1Q24 2Q24 3Q24 4Q24 1,582 BE BU 317 317 0
Slide 17: Limited net loan loss impairment charges & excellent credit cost ratio
Limited net loan loss impairment charges & excellent credit cost ratio 17 of 47 Other impairments Asset impairment ECL for geopolitical & macroeconomic uncertainties Credit cost ratio in m EUR; negative sign is a release in bps 60 *In FY20, an ECL buffer of 44 bps was added re Impairments on financi
Slide 18: Loan loss experience at KBC
Loan loss experience at KBC 18 of 47 Credit cost ratio* in %; Credit cost ratio: amount of losses incurred on troubled loans as a % of total average outstanding loan portfolio AVERAGE 1Q24 FY23 FY22 FY21 FY20 FY19 FY18 ‘99 –’23 Belgium BU 0.11% 0.06% 0.03% -0.26% 0.57% 0.22% 0.09% n/a Czech Republic
Slide 19: Diversified loan portfolio
Diversified loan portfolio 19 of 47 Total loan portfolio outstanding Total loan portfolio outstanding | by segment as % of total Group loan portfolio outstanding* Total loan portfolio outstanding Corporate 202bn EUR* 37.1% Retail 40.8% Group level Total loan portfolio outstanding | by sector 22.1% a
Slide 20: Loan portfolio breakdown by IFRS 9 ECL stage
Loan portfolio breakdown by IFRS 9 ECL stage 20 of 47 Total loan portfolio outstanding | by IFRS9 ECL Stage* Stage 3 ratio | Belgium BU as % of total Group loan portfolio outstanding in % 19.9% 2.3% 2.2% 2.1% 1.9% 2.0% 17.9% 13.6% 11.5% 12.5% Stage 2 FY20 FY21 FY22 FY23 1Q24 3.3% 2.9% 2.1% 2.1% 2.1%
Slide 21: Cover ratios
Cover ratios 21 of 47 Cover ratio | by IFRS9 ECL Stage* Stage 3 cover ratio | Belgium BU in % in % 45.6% 42.6% 47.1% 47.1% 39.6% 38.3% 37.8% 44.7% 44.7% 44.5% Stage 3 FY20 FY21 FY22 FY23 1Q24 Stage 3 cover ratio | Czech Republic BU 4.8% in % 2.2% 1.7% 1.4% 1.6% Stage 2 48.7% 49.4% 45.2% 44.7% 45.0%
Slide 22: Solvency, liquidity & funding | Strong capital position with substantial buffer to MDA
Solvency, liquidity & funding I Strong capital position with substantial buffer to MDA 22 of 47 Capital requirements and distance to Maximum Distributable Amount (MDA) restrictions as at 31 March 2024 (fully loaded, B3) in % Regulatory requirement 19.8 KBC Group 3.4 Tier 2 16.5 Fully loaded B3 commo
Slide 23: Leverage ratio, Solvency II ratio and liquidity ratios
Leverage ratio, Solvency II ratio and liquidity ratios 23 of 47 Leverage ratio | KBC Group Liquidity ratios | KBC Group Solvency II ratio | KBC Group fully loaded, Basel 3 in % in % Leverage LCR NSFR Solvency II ratio ratio 5.4% 1Q24 162% 1Q24 139% 1Q24 202% 1Q24 5.7% FY23 159% FY23 136% FY23 206% F
Slide 24: KBC Group consolidated balance sheet
KBC Group consolidated balance sheet 24 of 47 359bn EUR Total balance sheet Deposits from customers 1Q 2024 1Q 2024 Total assets Total liabilities and equity by core countries as % of total deposits from customers 36 6% Bulgaria 87 5 4% 4% Hungary 31 Slovakia 23% 15 5 47 Czech Republic 69 24 216 63%
Slide 25: Strong customer funding base
Strong customer funding base 25 of 47 • KBC Bank continues to have a strong retail/mid-cap deposit base in its core markets – resulting in a stable funding mix with a significant portion of the funding attracted from core customer segments and markets • Stable % in customer funding compared to balan
Slide 26: Upcoming mid-term funding maturities
Upcoming mid-term funding maturities 26 of 47 Total outstanding | 1Q24 Recent deals in % KBC Bank has 6 solid sources of long-term funding: (i) Retail term deposits, (ii) • In Nov 2023, KBC Group issued a Senior Holdco benchmark for an amount of Retail EMTN, (iii) Public benchmark transactions, (iv)
Slide 27: Above resolution requirements in terms of MREL
Above resolution requirements in terms of MREL 27 of 47 MREL targets MREL actuals • The resolution plan for KBC is based on a Single Point of Entry • The MREL ratio in % of RWA increased from 30.7% in FY23 to 33.2% (SPE) approach at KBC Group level, with bail-in as the in 1Q24, driven mainly by the
Slide 28: MREL instruments issued at the level of KBC Group and down-streamed
MREL instruments issued at the level of KBC Group and down-streamed to KBC Bank and KBC Insurance 28 of 47 KBC Group Holdco Senior 14 955 Tier 2(2) 4 255 KBC Bank Additional Tier 1 KBC Insurance 1 750 Tier 2 Subordinated loans(1) 14 955 Equity(3) 500 16 127 Participation KBC Group Tier 2(2) 3 257 2
Slide 29: ESG | Direct environmental impact
ESG I Direct environmental impact Our progress in brief 29 of 47 DIRECT environmental footprint (FY 2023) • Since 2015, we have been calculating the GHG emissions arising from our own operations at group More details in our 2023 Sustainability Report level, in accordance with the GHG Protocol Corpor
Slide 30: Indirect environmental impact: our progress in brief
Indirect environmental impact: our progress in brief 30 of 47 INDIRECT environmental footprint (FY 2023) Loan portfolio (selection of sectors) reduction compared to 2021 baseline, otherwise indicated Mortgages and commercial Operational lease Agriculture • We refer to our Collective Commitment to Cl
Slide 31: KBC Green Bond framework and issuances
KBC Green Bond framework and issuances 31 of 47 Aligned with best practices and market Verification developments • One year after issuance and until maturity, a limited assurance report • The KBC Green Bond Framework is in line with the on the allocation of the Green Bond proceeds to Eligible Assets
Slide 32: KBC Social Bond framework and issuances
KBC Social Bond framework and issuances 32 of 47 Aligned with best practices and market Clear Social Bond governance developments Social Bond Eligible Assets include financing in Belgium in the Use following categories: • By adding the social aspect to its funding mix, KBC Bank of • Access to Essent
Slide 33: Covered bond programme | Overview
Covered bond programme | Overview 33 of 47 The covered bond programme is considered as an important funding tool for the treasury department. KBC’s intentions are to be a frequent benchmark issuer if markets and funding plan permit. Issuer KBC Bank NV Minimum 105% of covered bond outstanding is cove
Slide 34: Covered bond programme | Belgian legal framework
Covered bond programme | Belgian legal framework 34 of 47 Belgian legal framework • Direct covered bond issuance from a bank’s balance sheet National Bank of • Dual recourse, including recourse to a special estate with cover assets included in a register Belgium • The special estate is not affected
Slide 35: Covered bond programme | Strong legal protection mechanisms
Covered bond programme | Strong legal protection mechanisms 35 of 47 Several legal protection mechanisms are in place: 1 Collateral type The value of one asset category must be at least 85% of the nominal amount of covered bonds KBC Bank exclusively selects residential mortgage loans and commits t
Slide 36: Looking forward | FY24 financial guidance
Looking forward I FY24 financial guidance (as provided with FY23 results) 36 of 47 Our bank-insurance+ model is firing on all cylinders Note: all growth figures are based on reported 2023 figures 2024 Net interest income* 5.3-5.5bn EUR Organic loan volume growth approx. +3% Insurance revenues (befor
Slide 37: FY24 financial guidance | NII sensitivities for 2024
FY24 financial guidance | NII sensitivities for 2024 (as provided with FY23 results) 37 of 47 5.5bn EUR Full guidance range accounts for following conservative assumptions: Within this range, we see following sensitivities • Market forward rates of mid-January assuming full impact/shock as of 1/1/20
Slide 38: Looking forward | FY26 financial guidance
Looking forward I FY26 financial guidance (as provided with FY23 results) 38 of 47 Our bank-insurance+ model is firing on all cylinders Note: all growth figures are based on reported 2023 figures 2026 Net interest income* CAGR23-26 at least +1.8% Insurance revenues (before reinsurance) CAGR23-26 at
Slide 39: Dividend policy, capital deployment plan and Basel IV guidance
Looking forward | Dividend policy, capital deployment plan and Basel IV guidance 39 of 47 Dividend policy and capital deployment plan Basel IV guidance (as provided with FY23 results) • In line with our announced capital deployment plan for FY23, the Board • Indicative view on transitional risk-weig
Slide 40: Annex 1 | Summary of the different business units' performance
Annex 1 | Summary of the different business units’ performance 40 of 47 Czech Slovakia Hungary Bulgaria Group KBC Belgium 1Q 2024 Republic Centre Group BU BU BU International Markets BU Net result (YTD, in euros) 506m 243m 197m 34m 50m 63m -80m ROAC (YTD) 15% 11% 38% 15% 25% 25% Allocated capital (i
Slide 41: Annex 2 | Outstanding benchmarks as at end of April 2024
Annex 2 | Outstanding benchmarks as at end of April 2024 41 of 47 Additional tier I securities Issuer Currency Isin Code Issued (in mio) Coupon Re-off spread Settlement date Call date Maturity Trigger Level KBC Group EUR BE0002592708 1,000 4.250% M/S+359.4bps 24/04/2018 24/10/2025 Perpetual Temporar
Slide 42: Annex 3 | KBC's covered bond programme characteristics
Annex 3 | KBC’s covered bond programme characteristics 42 of 47 Portfolio data as of 31 March 2024 Interest rate type Geographical allocation in EUR in % in % Total Outstanding Principal Balance 20 462 945 410 Fixed 87% Brussels Total value of the assets for the over-collateralisation 1 y / 1y 4% Ho
Slide 43: Annex 3 | Key cover pool characteristics
Annex 3 | Key cover pool characteristics 43 of 47 Final maturity date Seasoning (in months) in bn EUR in bn EUR 17.7bn 3.3bn Weighted average Weighted average 3.2bn 3.2bn seasoning remaining maturity 2.7bn 2.5bn 194 months 60 months 1.4bn 1.3bn 1.1bn 1.0bn 0.7bn 2.3bn 0.5bn 2023 - 2027 2028 - 2032 >
Slide 44: Annex 4 | Belgian real estate market – House price dynamics
Annex 4 | Belgian real estate market – House price dynamics 44 of 47 Belgian house price rose by 2.5% for FY23, The overvaluation of Belgian real estate is as against a price drop of 1.1% in the EU estimated at some 8% in Q4 2023 KBC Group passport Business profile Financial performance Solvency, li
Slide 45: Glossary
Glossary B3 / B4 Basel III / Basel IV 45 of 47 Combined ratio (non-life Short-term non-life insurance contracts: [claims and claim related costs net of reinsurance + costs other than claims and commissions] / [earned expected insurance) premiums received, net of reinsurance] Common equity ratio [com
Slide 46: Contacts / questions
Contacts / questions 46 of 47 Kurt De Baenst direct +32 2 429 35 73 More information Investor Relations General Manager mobile +32 472 500 427 kurt.debaenst@kbc.be • Company website KBC • Quarterly Report Ilya Vercammen direct +32 2 429 21 26 Quarterly Reports • Table of results (Excel) Investor Rel
Slide 47: Disclaimer
Disclaimer 47 of 47 • 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 therefore incomple