Kbc Group N.v. · EURONEXT:KBC
Kbc — FY2023 Earnings Presentation
78 slides from Kbc's earnings presentation, February 2024
Slide 1: KBC Group Company presentation FY 2023 / 4Q 2023
1 of 78 KBC Group Company presentation FY 2023 / 4Q 2023 More information: www.kbc.com KBC Group - Investor Relations Office: IR4U@kbc.be
Slide 2: Accounting framework | Implementation of IFRS 17
Accounting framework | Implementation of IFRS 17 2 of 78 IFRS 17 (Insurance contracts) is effective from 1 January 2023 (with retrospective application for 2022) and replaces IFRS 4: • The income statement is updated to include the new items introduced by IFRS 17 (also the quarterly figures of 2022
Slide 3: Good net result of 677m EUR over 4Q23
Highlights Good net result of 677m EUR over 4Q23 3 of 78 • Commercial bank-insurance franchises performed well Net result in m EUR • As policy rates are peaking, KBC Group is well-positioned being an integrated bank-insurer with tailored AM business • Customer loans and customer deposits increased q
Slide 4: Capital deployment
Capital deployment 4 of 78 For FY23: • A total gross dividend of 4.15 EUR per share will be proposed to the AGM for the accounting year 2023 (of which an interim dividend of 1.0 EUR per share already paid in November 2023 and the remaining 3.15 EUR per share to be paid in May 2024) • Including the p
Slide 5: Strategic focus | What differentiates us from peers
Strategic focus | What differentiates us from peers 5 of 78 Unique integrated bank- Successful digital-first Firmly embedded insurance+ model approach through KATE sustainability strategy • We offer an integrated response to our • Our digital interaction with clients forms • As a company that aims t
Slide 6: Strategic focus | The reference
Strategic focus | The reference 6 of 78 Profitability With a Return on Equity of 15% in FY23 KBC is one of the most profitable EU financial institutions Solvency With a fully loaded CET1 ratio of 15.2% at end FY23 KBC is amongst the better capitalised EU banks At KBC it is our ambition to be the ref
Slide 7: Main exceptional items
Main exceptional items 7 of 78 4Q23 3Q23 4Q22 F&C – Issuance of State Note +11m EUR BE BU NOI – Realised gains +18m EUR Total Exceptional items BE BU +18m EUR +11m EUR NOI – legacy legal file(s) -149m EUR CZ BU Impairments – Goodwill on CSOB S -109m EUR Total Exceptional items CZ BU -109m EUR -149m
Slide 8: Lower net interest income
Lower net interest income 8 of 78 Net interest income Net interest margin* in m EUR 1,417 1,407 in %, calculated excl. the dealing room and the net positive impact of ALM FX swaps & repos 1,382 1,360 1,297 118 1,324 1,248 106 96 98 Insurance 1,201 115 92 98 111 1.91% 1.91% 1.90% 2.10% 2.04% 2.11% 2.
Slide 9: Inflow of core customer money
Inflow of core customer money 9 of 78 Customer money dynamic over 4Q23 Customer money dynamic over FY23 in m EUR in m EUR +2.2bn EUR +0.9bn EUR -2.1bn EUR +5.9bn EUR -0.2bn EUR -0.9bn EUR -5.7bn EUR +4.8bn EUR -0.6bn EUR +1.6bn EUR +2.7bn EUR -14.7bn EUR +16.9bn EUR -1.2bn EUR -0.2bn EUR -1.1bn EUR
Slide 10: Higher net fee and commission income
Higher net fee and commission income 10 of 78 Net fee & commission income Assets under management in m EUR in bn EUR 576 584 588 600 244 570 557 549 542 11 12 12 228 225 227 9 8 10 Other 211 217 Investment 8 9 205 206 55 Banking 45 42 46 49 advice 240 262 268 265 41 40 40 239 256 249 262 services 67
Slide 11: Non-life sales significantly up y-o-y, life sales up q-o-q and down y-o-y
Non-life sales significantly up y-o-y, life sales up q-o-q and down y-o-y 11 of 78 Non-life sales Life sales in m EUR in m EUR 723 727 30 32 685 36 Hybrid products 599 667 577 538 218 511 501 483 558 549 297 Guaranteed- 27 477 297 interest 422 31 438 products 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 12: Stable FIFV result and higher net other income
Stable FIFV result and higher net other income 12 of 78 FIFV Net other income in m EUR in m EUR 89 90 115 58 90 38 106 69 58 78 Dealing room 94 53 90 35 47 498 5 28 13 Inv. backing UL 25 0 4 17 40 26 29 contracts under IFRS17 6 16 15 16 11 69 54 44 60 -13 -5 -5 -16 -17 47 3 -24 -41 MVA/CVA/FVA -103
Slide 13: Costs excluding bank & insurance taxes in line with guidance
Costs excluding bank & insurance taxes in line with guidance 13 of 78 Operating expenses (including costs directly attributable to Bank and insurance tax spread 2023 insurance) in m EUR in m EUR 1,648 Total Upfront Spread out over the year 1,516 4Q23 1Q23 2Q23 3Q23 4Q23 1Q23 2Q23 3Q23 4Q23 571 514 1
Slide 14: Overview of bank & insurance taxes (FY23)
Overview of bank & insurance taxes (FY23)* 14 of 78 KBC Group KBC Group Belgium BU in m EUR in m EUR BU BE 687m EUR 361m EUR 13.4% of FY23 opex*** 571 354 12.8% of 347 514 FY23 opex*** 148 ESRF 99 ESRF** 86 154 contribution contribution Common 423 Common 255 360 261 bank & insur. taxes bank & insur.
Slide 15: Net loan loss impairment releases & excellent credit cost ratio
Net loan loss impairment releases & excellent credit cost ratio High other impairments (mainly goodwill and software) 15 of 78 Other impairments Asset impairment ECL for geopolitical, emerging and Covid risks Credit cost ratio in m EUR; negative sign is a release in bps 60 *In FY20, an ECL buffer of
Slide 16: Outstanding ECL for geopolitical and emerging risks amounts to 256m EUR
Outstanding ECL for geopolitical and emerging risks amounts to 256m EUR 16 of 78 Q-o-q change in the outstanding ECL for geopolitical and emerging risks in m EUR; negative sign is a release YTD ECL impact: -173m EUR 429 -21 -18 -39 -40 -59 -35 256 In 4Q23 ECL release of 35m EUR, driven mainly by the
Slide 17: Fully loaded Basel III CET1 from 3Q23 to 4Q23
Fully loaded Basel III CET1 from 3Q23 to 4Q23 17 of 78 Q-o-q variance of CET1 capital in bn EUR 17.2 -0.4 0.0 +0.6 +0.2 16.8 3Q23 (B3 DC) 4Q23 net result Pro-rata accrual Dividend Other* 4Q23 (B3 DC) Jan 2012 (excl. KBC Ins. due dividend payment KBC Ins to Danish Compr.) to KBC Group Fully loaded B3
Slide 18: Strong capital position with substantial buffer to MDA
Strong capital position with substantial buffer to MDA 18 of 78 Capital requirements and distance to Maximum Distributable Amount (MDA) restrictions as at 31 December 2023 (fully loaded, B3) in % Regulatory requirement 18.8 KBC Group 2.0 Tier 2 16.8 • P2R 1.86% (= Pillar II requirement) 15.2 1.5 AT1
Slide 19: Leverage ratio, Solvency II ratio and liquidity ratios
Leverage ratio, Solvency II ratio and liquidity ratios 19 of 78 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 5.7% FY23 159% FY23 136% FY23 206% FY23 5.3% FY22 152% FY22 136% FY22 203% F
Slide 20: Looking forward | Economic outlook
Looking forward I Economic outlook 20 of 78 • Growth in the euro area stagnated in the fourth • The main risks to our short-term outlook for European quarter of 2023, mainly due to the impact of the ECB’s growth include the global weakness of the tightening cycle on credit growth and the weakness in
Slide 21: Looking forward | FY24 financial guidance
Looking forward I FY24 financial guidance 21 of 78 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 (before reinsurance) at least +6% y-o-
Slide 22: FY24 financial guidance | NII sensitivities for 2024
FY24 financial guidance | NII sensitivities for 2024 22 of 78 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 1/1/2024: • Increase of MRR to 2% as o
Slide 23: Looking forward | FY26 financial guidance
Looking forward I FY26 financial guidance 23 of 78 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 least +6% Operating expenses and
Slide 24: Indicative view on transitional RWA evolution under Basel IV
Indicative view on transitional RWA evolution under Basel IV Based on current EU consensus for Basel IV, a static balance sheet and all other parameters ceteris paribus, without any 24 of 78 mitigating actions • 3Q23 included the previously communicated 8.2bn EUR model-related RWA add-on, partly off
Slide 25: Wrap-up
Wrap-up 25 of 78 Excellent financial Outstanding solvency Kate convinces Franchise is growing performance and liquidity customers net result CET1 ratio 4.2 million loan customer 677m volumes deposits 4Q23 15.2% users 3402m 3.6% buffer in contact +3% -3% vs MDA with Kate y-o-y y-o-y FY23 NSFR AM net
Slide 26: Supplemental information & disclosures
Supplemental information & disclosures 26 of 78 BU & FY23 view (slide 27-47) Annexes (slide 48-75) • Belgium BU • Company profile • Czech Republic BU • KBC strategy • International Markets BU • Sustainability • Slovakia • Asset quality • Hungary • MREL & funding • Bulgaria • Group Centre BU • FY 202
Slide 27: Belgium BU (1) | Net result
Belgium BU (1) | Net result 27 of 78 Net result ROAC in m EUR FY23 22% 62% of Allocated Capital 652 545 576 517 447 474 299 231 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 • The quarter was characterised by slightly lower net interest income, higher net fee and commission income, lower net result from f
Slide 28: Belgium BU (2) | Net interest income
Belgium BU (2) | Net interest income 28 of 78 Net interest income Net interest margin in m EUR in % 3Q23 had 7bps one-off cancellation fee of internal deals 1.98% 1.95% 1.91% 2.05% 1.91% 1.90% 1.57% 1.59% 1.62% 812 857 812 809 703 769 636 677 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 • Decreased by 1
Slide 29: Belgium BU (3) | Credit margins in Belgium
Belgium BU (3) | Credit margins in Belgium 29 of 78 Product spread on customer loan book | Outstanding in % 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4
Slide 30: Belgium BU (4) | Other income lines & cross-selling
Belgium BU (4) | Other income lines & cross-selling 30 of 78 Net fee & commission income Insurance in m EUR • Insurance sales: 898m EUR • Non-life sales (317m EUR) +11% y-o-y, due to premium growth in all classes, due to a combination of volume and tariff increases • Life sales (581m EUR) rose by 70
Slide 31: Belgium BU (5) | Opex & impairments
Belgium BU (5) | Opex & impairments 31 of 78 Operating expenses Asset impairment Other impairments in m EUR in m EUR ECL for geopolitical, emerging and Covid risks 931 Impairments on financial assets at AC and FVOCI 898 58 347 16 354 651 612 617 625 Bank & 0 8 43 40 550 573 0 6 Insurance taxes 21 5
Slide 32: Czech Republic BU (1) | Net result
Czech Republic BU (1) | Net result 32 of 78 ROAC Net result FY23 in m EUR 35% 16% of Allocated Capital 276 244 199 200 170 184 102 41 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 • The quarter was characterised by higher net interest income, stable net fee & commission income, higher net result from fina
Slide 33: Czech Republic BU (2) | Net interest income
Czech Republic BU (2) | Net interest income 33 of 78 Net interest income Net interest margin in m EUR in % 2.65% 2.70% 2.45% 2.40% 2.30% 2.35% 2.26% 2.29% 326 340 325 323 325 316 322 309 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 • Rose by 3 bps q-o-q and fell by
Slide 34: Czech Republic BU (3) | Other income lines & cross-selling
Czech Republic BU (3) | Other income lines & cross-selling 34 of 78 Net fee & commission income Insurance in m EUR • Insurance sales: 165m EUR • Non-life sales (120m EUR) +14% y-o-y (also +14% excl. FX), due to premium and volume growth in all classes • Life sales (47m EUR) decreased by 2% q-o-q (fl
Slide 35: Czech Republic BU (4) | Opex & impairments
Czech Republic BU (4) | Opex & impairments 35 of 78 Operating expenses Asset impairment Other impairments in m EUR in m EUR ECL for geopolitical, emerging and Covid risks Impairments on financial assets at AC and FVOCI 280 269 236 60 231 237 114 60 1 227 0 Bank & insurance taxes 213 0 204 0 31 128 O
Slide 36: International markets BU (1) | Highlights
International markets BU (1) | Highlights 36 of 78 ROAC Net result FY23 Organic volume trend in m EUR 200 190 25% Total o/w retail Customer 178 20% of loans** mortgages deposits*** 160 Allocated Capital 145 79 Volume (EUR) 28bn 10bn 32bn 90 67 Bulgaria 45 Growth q-o-q* +3% +2% +5% 56 108 Growth y-o-
Slide 37: International markets BU (2) | Slovakia
International markets BU (2) | Slovakia 37 of 78 Net result ROAC Volume trend in m EUR FY23 13% • Total customer loans rose by 1% q-o-q and by 7% y-o-y (the latter due 6% of mainly to strong loan growth in corporate and good growth in Allocated Capital mortgage loans) • Total customer deposits rose
Slide 38: International markets BU (3) | Hungary
International markets BU (3) | Hungary 38 of 78 • 1m EUR net loan loss impairment charge, as a 12m EUR net impairment reversal for geopolitical and emerging risks was more than offset by 13m Net result ROAC in m EUR EUR net loan loss impairment charges (on a few corporate files). Credit FY23 cost ra
Slide 39: International markets BU (4) | Bulgaria
International markets BU (4) | Bulgaria 39 of 78 Net result ROAC Volume trend in m EUR FY23 30% • Total customer loans rose by 4% q-o-q and by 10% y-o-y (both due 7% of to growth in all segments) Allocated Capital • Total customer deposits rose by 5% q-o-q (due to growth in all 90 segments, mainly h
Slide 40: Group Centre BU | Highlights
Group Centre BU | Highlights 40 of 78 Net result Highlights (q-o-q), excluding Ireland in m EUR 291 • Excluding Ireland, the q-o-q lower result of Group Centre was attributable mainly to: • Lower net interest income (due mainly to a 351 +26m EUR one-off cancellation fee of internal 33 deals, mirrore
Slide 41: FY23 | Highlights
FY23 | Highlights 41 of 78 Net result Net result rose by 21% y-o-y to 3,402m EUR in 2023, mainly as a result of the following in m EUR • Revenues rose by 12% y-o-y due mainly to higher net interest income, higher net fee and commission income, higher insurance revenues (both life and non-life), high
Slide 42: FY23 | Higher net interest income (better than guided) and NIM
FY23 | Higher net interest income (better than guided) and NIM 42 of 78 Net interest income Net interest margin in m EUR in % 5,473 5,162 392 Insurance NII 442 +0.09% +6% 1.96% 2.05% 4,720 5,081 Banking (incl. Holding) 2022 2023 • Increased by 9 bps y-o-y for the reasons mentioned under Net 2022 202
Slide 43: FY23 | Higher net fee and commission income and higher AUM
FY23 | Higher net fee and commission income and higher AUM 43 of 78 Net fee & commission income Assets under management in m EUR in bn EUR 2,349 244 2,218 45 36 Other Investment 206 55 +6% advice 1,057 Banking services 40 +19% 983 68 Fund-of-Funds 60 Group assets & 21 19 Pension fund Asset Managemen
Slide 44: FY23 | Non-life and life insurance sales significantly up y-o-y
FY23 | Non-life and life insurance sales significantly up y-o-y 44 of 78 Non-life sales Life sales in m EUR in m EUR 2,328 2,071 131 Hybrid products +12% 115 +12% Guaranteed interest 2,093 2,351 979 products 983 2022 2023 • Up by 12% y-o-y, with growth in all countries and all classes, due to a Unit
Slide 45: Higher FIFV result and sharply higher net other income
Higher FIFV result and sharply higher net other income 45 of 78 FIFV Net other income in m EUR in m EUR 322 252 288 Dealing room Dealing room 245 656 Inv. Backing UL contracts MVA/CVA/FVA 80 96 under IFRS17 -6 -15 M2M ALM der. -65 -47 MVA/CVA/FVA and Other M2M ALM derivatives and Other 16 2022 2023
Slide 46: FY23 | Costs in line with guidance
FY23 | Costs in line with guidance 46 of 78 Operating expenses (including costs directly attributable to Bank and insurance taxes insurance) in m EUR in m EUR FY23 FY22 5,125 BE BU 361 349 4,805 687 Bank & insurance tax CZ BU 60 61 646 Hungary 238 211 +7% Slovakia 4 7 Bulgaria 20 10 4,159 4,438 Oper
Slide 47: FY23 | Net loan loss impairment charges & excellent credit cost ratio
FY23 | Net loan loss impairment charges & excellent credit cost ratio 47 of 78 Asset impairment 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 Covid risks, fully released in FY21. 215 In FY21, a new ECL buffer of 429m EUR was added for
Slide 48: Company profile | KBC Group in a nutshell (1)
Company profile | KBC Group in a nutshell (1) 48 of 78 Diversified and strong business performance We want to be among Europe’s best performing financial institutions • geographically … • Mature markets (BE, CZ) combined with developing markets (SK, HU, BG) • We are a leading European financial grou
Slide 49: Company profile | KBC Group in a nutshell (2)
Company profile | KBC Group in a nutshell (2) 49 of 78 High profitability (IFRS 17 figures) Solid capital position combined CET 1 ratio (fully loaded, Danish compromise) C/I ratio* ratio net result in % 49% FY23 87% FY23 3,402m FY23 17.1% 17.6% 49% FY22 2,818m FY22 15.8% 16.3% 16.0% 15.5% 15.4% 15.2
Slide 50: Company profile | KBC Group in a nutshell (3)
Company profile | KBC Group in a nutshell (3) 50 of 78 Dividend policy & capital distribution Shareholder structure (will be updated with 1Q24 results) (as at end FY23) • We aim to be amongst the better capitalised financial MRBB* Other core institutions in Europe. As a consequence, the dividend pol
Slide 51: Company profile | Well-defined core markets
Company profile | Well-defined core markets 51 of 78 Belgium BU Czech Republic BU International Markets BU SK HU BG 60% of assets 119bn EUR loans 22% of assets 36bn EUR loans 4% of assets 4% of assets 5% of assets 3.9m clients 4.3m clients 0.8m clients 1.6m clients 2.2m clients 434 branches 198 bran
Slide 52: Strategy | Differently: the next level
Strategy | Differently: the next level 52 of 78 Our strategy rests on the following principles: • We place our clients at the centre of everything we do. • We look to offer our clients a unique bank-insurance experience. • We focus on our group’s long-term development and aim to achieve sustainable
Slide 53: Strategy | Powered by PEARL
Strategy | Powered by PEARL 53 of 78 ‘Why would you build exactly the same thing in your country, when you have the solution next door?’ Johan Thijs Highlights Profit & Loss Capital & Liquidity Looking forward Business units Company profile KBC Strategy Sustainability Asset quality MREL & Funding
Slide 54: Strategy | Bank-insurance+
Strategy | Bank-insurance+ 54 of 78 We move beyond traditional bank-insurance towards bank-insurance+, providing not only traditional bank-insurance solutions but also less traditional non-financial solutions that impact the financial wellness of retail customers or the future of their business Data
Slide 55: Strategy | The KBC performance diamond
Strategy | The KBC performance diamond 55 of 78 The performance diamond defines, within the limits of the risk management framework, the targets for KBC Group and for all the business units for 4 performance dimensions: Highlights Profit & Loss Capital & Liquidity Looking forward Business units Comp
Slide 56: Kate | KBC's hyper personalised and trusted digital assistant
Kate | KBC’s hyper personalised and trusted digital assistant 56 of 78 Personalised & data driven The interaction between the customer and Kate will be triggered by data analysis (approval granted by customer). Kate will be trained on the basis of the customer’s Digital first & E2E profile, preferen
Slide 57: Kate | Four flavours, one Kate
Kate | Four flavours, one Kate 57 of 78 Kate4MassRetail Kate4Business Kate Group Platform Kate4Employees Kate is a personal virtual Kate will also engage with our We do not build Kate for every Kate will also have an impact on assistant that engages with our self-employed, micro-SME, SME country ind
Slide 58: Kate | A data-driven organisation with Kate at the core
Kate | A data-driven organisation with Kate at the core 58 of 78 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 59: Kate | From basic chatbot to hyper-personal digital assistant
Kate | From basic chatbot to hyper-personal digital assistant 59 of 78 … Level 4: Kate offers hyper-personal solutions at the right time LEVEL 4 LEVEL 3 Hyper- personal & Level 3: Kate proactively offers actionable end- LEVEL 2 Proactive contextual to-end solutions to unburden customers LEVEL 1 End2
Slide 60: DISCAI | KBC's AI fintech
DISCAI | KBC’s AI fintech, launched on 7 March 2022 60 of 78 DISCAI – Discovering AI Next steps for DISCAI • Fully owned KBC Group subsidiary, grouping the in-house developed artificial intelligence (AI) solutions Starting with commercialisation of AML platform • Bank-Insurance as a Service • Inno
Slide 61: Strategy | Translating strategy into non-financial targets
Strategy | Translating strategy into non-financial targets 61 of 78 • No hassle, no frills, zero-delay customer experience • Proactive personalized financial solutions via DATA and AI • Re-design & automation of all processes • Bank-insurance+ • Digital lead management: from data driven to solution
Slide 62: Strategy | KBC's non-financial targets (2020-2023)
Strategy | KBC’s non-financial targets (2020-2023) 62 of 78 Customer ranking Bank-insurance (BI) clients Digital sales BI clients Digital sales banking products* TARGET in % in % TARGET Top-3 Top-3 Top-2 Top-2 Top-2 * TARGET 2020 2021 2022 2023 2023 77% 78% 81% 77% * 80% 39% 46% 52% 40% 32% • KBC is
Slide 63: Strategy | New KBC's non-financial targets (2023-2026)
Strategy | New KBC’s non-financial targets (2023-2026) 63 of 78 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 20
Slide 64: KBC's ESG ratings and indices are ahead of the curve
KBC’s ESG ratings and indices are ahead of the curve 64 of 78 Agency ESG rating 29th of December 2023 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 percentil
Slide 65: Sustainability highlights
Sustainability highlights 65 of 78 Commitment to environmental action Sustainable business Social responsibility 2030 and 2050 climate targets Social bond 7.4bn EUR Committed to a first set of climate Issued a second social bond for Financing contributing to targets for the most material investments
Slide 66: Direct environmental impact: our progress in brief
Direct environmental impact: our progress in brief 66 of 78 DIRECT environmental footprint (FY 2022) More details in our 2022 Sustainability Report • In 2020, we set more stringent ambitions to reduce the GHG emissions resulting from our own operations • Furthermore, we included commuter travel in o
Slide 67: Indirect environmental impact: our progress in brief
Indirect environmental impact: our progress in brief 67 of 78 INDIRECT environmental footprint (FY 2022) 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 68: Loan loss experience at KBC
Loan loss experience at KBC 68 of 78 Credit cost ratio* in %; Credit cost ratio: amount of losses incurred on troubled loans as a % of total average outstanding loan portfolio AVERAGE FY23 FY22 FY21 FY20 FY19 FY18 FY17 ‘99 –’23 Belgium BU 0.06% 0.03% -0.26% 0.57% 0.22% 0.09% 0.09% n/a Czech Republic
Slide 69: Diversified loan portfolio
Diversified loan portfolio 69 of 78 Total loan portfolio outstanding Total loan portfolio outstanding | by segment as % of total Group loan portfolio outstanding* Total loan portfolio outstanding Corporate 203bn EUR* 37.4% 40.8% Retail Group level Total loan portfolio outstanding | by sector 21.8% a
Slide 70: Loan portfolio breakdown by IFRS 9 ECL stage
Loan portfolio breakdown by IFRS 9 ECL stage 70 of 78 Total loan portfolio outstanding | by IFRS9 ECL Stage* Stage 3 ratio | Belgium BU as % of total Group loan portfolio outstanding in % 2.4% 2.3% 2.2% 19.9% 1.9% 2.0% 17.9% Stage 2 13.6% 11.3% 11.5% FY19 FY20 FY21 FY22 FY23 3.5% 3.3% 2.9% 2.1% 2.1%
Slide 71: Cover ratios
Cover ratios 71 of 78 Cover ratio | by IFRS9 ECL Stage* Stage 3 cover ratio | Belgium BU in % in % 41.7% 45.6% 42.6% 39.6% 38.3% 47.1% 47.1% 44.7% 44.7% 42.0% Stage 3 FY19 FY20 FY21 FY22 FY23 Stage 3 cover ratio | Czech Republic BU 4.8% in % 1.3% 2.2% 1.7% 1.4% 47.2% 48.7% 49.4% Stage 2 44.7% 45.2%
Slide 72: Substantial and well-diversified government bond portfolio
Substantial and well-diversified government bond portfolio 72 of 78 • Carrying value of 56.5bn EUR in government bonds (excl. trading book) at end of FY23, primarily as a result of a significant excess liquidity position and the reinvestment of insurance reserves in fixed-income instruments • Carryi
Slide 73: Above resolution requirements of FY23 in terms of MREL
Above resolution requirements of FY23 in terms of MREL 73 of 78 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 30.2% in 9M23 to 30.7% in FY23, (SPE) approach at KBC Group level, with bail-in as the preferred dri
Slide 74: Upcoming mid-term funding maturities
Upcoming mid-term funding maturities 74 of 78 Total outstanding | 4Q23 Recent deals in % • In Nov 2023, KBC Group issued a Senior Holdco benchmark for an amount of KBC Bank has 6 solid sources of long-term funding: (i) Retail term deposits, (ii) 500m EUR with a 6-year maturity callable after 5 years
Slide 75: Strong and growing customer funding base
Strong and growing customer funding base 75 of 78 • 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 compa
Slide 76: Glossary
Glossary 76 of 78 B3 / B4 Basel III / Basel IV 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 77: Contacts / questions
Contacts / questions 77 of 78 Johan Thijs More information KBC Group CEO • Company website KBC • Quarterly Report Quarterly Reports • Table of results (Excel) Luc Popelier KBC Group CFO • Quarterly presentation Presentations • Debt presentation Kurt De Baenst direct +32 2 429 35 73 Upcoming events I
Slide 78: Disclaimer
Disclaimer 78 of 78 • 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