Kbc Group N.v. · EURONEXT:KBC
Kbc — 3Q15 and 9M15 Earnings Presentation
22 slides from Kbc's earnings presentation, 2015
Slide 1: KBC Group 3Q15 and 9M15 results press presentation
KBC Group 3Q15 and 9M15 results press presentation Johan Thijs, CEO KBC Group Luc Popelier, CFO KBC Group More detailed 1 analyst presentation available on www.kbc.com.
Slide 2: Important information for investors
Important information for investors This presentation is provided for informational 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
Slide 3: 3Q 2015 key takeaways for KBC Group
3Q 2015 key takeaways for KBC Group STRONG BUSINESS PERFORMANCE IN 3Q15 Good net result of 600m EUR in 3Q15 (and 1.8bn EUR in 9M15) o Good commercial bank-insurance franchises in our core markets and core activities o Q-o-q increase in customer loan and deposit volumes in most of our core countrie
Slide 4: KBC Group Consolidated results
KBC Group Consolidated results 4
Slide 5: KBC Group: Good net result in 3Q 2015
KBC Group: Good net result in 3Q 2015 Net result 666 608 600 510 473 347 334 564 532 524 412 420 257 262 118 105 98 121 121 79 71 -28 -32 -22 -18 -23 -19 -4 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 Banking Insurance Holding company Amounts in millions of EUR 5
Slide 6: Net result per business unit (1/2)
Net result per business unit (1/2): Business units turn in a solid result 528 153 92 138 140 143 68 130 127 398 399 414 121 28 24 358 304 330 -7 -28 -175 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’14 ’14 ’14 ’14 ’15 ’15 ’15
Slide 7: Net result per business unit (2/2)
Net result per business unit (2/2): IM BU1 returns to profitability IM BU returns to profitability mainly thanks to improvements BE and CZ BUs continue to in Ireland and Hungary post good results 1 762 473 1 516 414 1 776 184 1 289 -7 1 102 1 216 528 -175 423 121 408 -182 2014 2015 2014 2015 2014 20
Slide 8: Net interest income
Net interest income: Net interest income (NII) and margin (NIM) slightly under pressure NII slightly down q-o-q: (+) volume growth, lower funding costs and additional rate cuts on savings accounts in the Czech Republic (-) in BE BU 12m EUR less upfront prepayment fees on mortgages, hedging losses on
Slide 9: Insurance (1/2)
Insurance (1/2): Premium income slightly up, but differences for Life and Non-life insurance Non-life premium +4% y-o-y Guaranteed interest rate products down y-o-y mainly as a result of a Life premiums up by 9% q-o-q thanks lower guaranteed interest rate in Belgium mainly to the Czech Republic BU a
Slide 10: Insurance (2/2)
Insurance (2/2): Strong non-life sales with good technical quality Good commercial performance in all Strong improvement in 9M15 major product lines and in our core compared to 9M14 (as 9M14 markets was negatively impacted by Non-life sales hailstorms in Belgium) (gross written premium) +4% 296 308
Slide 11: Net fee and commission income
Net fee and commission income: Net inflows, but lower income due to adverse market circumstances Net fee and commission income Assets under management (AUM) -2% -18% 465 204 200 +11% 180 402 383 -5% 3Q 2014 2Q 2015 3Q 2015 3Q 2014 2Q 2015 3Q 2015 • Q-o-q decrease driven by: - lower entry fees from m
Slide 12: The other net income drivers
The other net income drivers: Lower fair value gains mute the performance Net gains on financial instruments at fair value Gains realised on AFS assets -74% 179 36 44 28 3Q 2014 2Q 2015 3Q 2015 Roughly double the normal run rate thanks to: 47 - settlement of old legal files to the tune of 30m 34 +38
Slide 13: Operating expenses
Operating expenses: Expenses down and good cost-income ratio -8% 941 897 862 47 83 -4% 34 21 52% 54% 51% 816 858 841 3Q 2014 2Q 2015 3Q 2015 C/I ratio %* legacy & OCR and deconsolidated entites Special bank taxes Operating expenses * adjusted for specific items: MtM ALM derivatives, special bank tax
Slide 14: Special bank taxes
Special bank taxes1: Represent 10.2% of expenses YTD15 (pro rata) Amounts in millions of EUR In 3Q15, the contribution to the ESRF at ČSOB High percentage owing to 337 328 Czech Republic (-12m EUR) was reversed as such Hungary contributions will only be applicable in the Czech 90 Republic as of 2016
Slide 15: Asset impairments
Asset impairments: Impairments down sharply and good credit cost ratio of 0.23% (historic average ’99-’14 of 0.54%) Impairments on loans and receivables credit cost ratio (YTD) -67% 149 58 49 -16% 0.41% 0.30% 0.23% 3Q 2014* 2Q 2015 3Q 2015 Q-o-q strong decrease, attributable mainly as follows: • low
Slide 16: KBC Group Balance sheet, capital and liquidity
KBC Group Balance sheet, capital and liquidity 16
Slide 17: Balance sheet
Balance sheet: Loans and deposits continue to grow in most core countries 252 257 258 +7% +3% 151 162 162 123 125 127 Loans1 Deposits2 Total balance sheet 3Q 2014 end 2Q 2015 end 3Q 2015 TOTAL LOANS MORTGAGES DEPOSITS q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y BE 2% 5% 1% 5% -1% 8% CZ 2% 10% 2% 9% 2% 8% IR
Slide 18: Capital and liquidity ratios
Capital and liquidity ratios: All ratios reside comfortably above regulatory minimums KBC Group fully loaded Basel 3 CET1 ratio (Danish compromise) 17.4% 16.7% 1.2% 14.9% 1.2% 13.7% 14.3% 2.3% 1.1% 2.3% 12.2% 12.9% 1.1% 1.1% 1.1% 2.2% 1.1% 2.2% 10.5% regulatory 2.2% 2.1% 2.1% minimum for 2015 13.2%
Slide 19: KBC Group 3Q15 and 9M15 wrap up
KBC Group 3Q15 and 9M15 wrap up 19
Slide 20: 3Q 2015 wrap up
3Q 2015 wrap up Strong commercial bank-insurance results in our core countries Successful underlying earnings track record Solid capital and robust liquidity position More detailed analyst presentation available on www.kbc.com. 20
Slide 21: Post balance-sheet event
Post balance-sheet event: KBC will liquidate KBC Financial Holding Inc. (US) KBC will liquidate KBC Financial Holding Inc. (US). This will result in the tax deductibility of losses already booked in previous years (specifically 2008 and 2009), for which a DTA1 will be booked, leading to2: • a gain
Slide 22: Looking forward
Looking forward Looking forward, management envisages: • Continued stable and solid returns for the Belgium & Czech Republic Business Units • The International Markets Business Unit more than achieved its profitability target (184m EUR profit in 9M15) • As per guidance already issued, profitabilit