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FINANCIALS: KBC Results: Little To Concern Investors, Guidance Upgraded

FINANCIALS
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KBC (KBCBB: A3/A-/A) results are solid. Revenues beat which meant, even with cost and loan loss (from a low base) overruns, pre-tax was 10% ahead of consensus. Guidance for NII is upgraded, capital is in line and there are no new bumper equity payouts. Spreads have outperformed into results and there appears to be little here to spook investors, in our view.

  • Credit stats: loan losses rose to 14bp in 2Q24 (+10bp q/q) which is above consensus but only EUR16m higher; in the context of pre-tax of over EUR1bn, we are talking very low levels and small numbers. Non-performers are stable q/q (at 2.1%). CET1 ratio is 15.1%, similar to consensus, Solvency II is down 20bp q/q (to 200%). So, overall, a solid outturn for a low risk business.
  • Revenues are 2% ahead of consensus, driven by NII, costs are around 6% higher than expected but, even with that loan loss overrun, pre-tax still beat by c.10%.
  • Guidance is increased for NII (to EUR5.5bn from 5.3-5.5bn), marginally above consensus (of EUR5.47bn). Other guidance measures are maintained.

Conf call is 0830 (London time) at: https://channel.royalcast.com/kbc/#!/kbc/20240808_1 

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KBC (KBCBB: A3/A-/A) results are solid. Revenues beat which meant, even with cost and loan loss (from a low base) overruns, pre-tax was 10% ahead of consensus. Guidance for NII is upgraded, capital is in line and there are no new bumper equity payouts. Spreads have outperformed into results and there appears to be little here to spook investors, in our view.

  • Credit stats: loan losses rose to 14bp in 2Q24 (+10bp q/q) which is above consensus but only EUR16m higher; in the context of pre-tax of over EUR1bn, we are talking very low levels and small numbers. Non-performers are stable q/q (at 2.1%). CET1 ratio is 15.1%, similar to consensus, Solvency II is down 20bp q/q (to 200%). So, overall, a solid outturn for a low risk business.
  • Revenues are 2% ahead of consensus, driven by NII, costs are around 6% higher than expected but, even with that loan loss overrun, pre-tax still beat by c.10%.
  • Guidance is increased for NII (to EUR5.5bn from 5.3-5.5bn), marginally above consensus (of EUR5.47bn). Other guidance measures are maintained.

Conf call is 0830 (London time) at: https://channel.royalcast.com/kbc/#!/kbc/20240808_1