On February 13, shares of Belgium's largest bank, KBC, reached a three-year high following robust revenue and a one-time tax benefit that propelled fourth-quarter net profit above expectations.
By 0920 GMT, the bank's shares had surged by 3.7%, marking their highest level since February 2022.
According to RBC Europe, KBC delivered a strong fourth-quarter performance, exceeding expectations at the pre-provision level due to robust revenue performance across all segments and effective cost management.
The fourth-quarter profit of 1.17 billion euros ($1.22 billion) surpassed the forecast of 1.06 billion euros from a company-conducted poll.
KBC reported a 3% increase in net interest income (NII) to 1.43 billion euros, surpassing consensus estimates. Additionally, net fee and commission income rose by 9% from the previous quarter.
The bank anticipates a minimum 5.5% increase in total income for the current year from 2024, with NII projected to be no less than 5.7 billion euros, supported by an expected organic loan growth of approximately 4%.
In insurance, revenue before reinsurance is expected to rise by 7% from the 2024 figure of 2.95 billion euros, accounting for over 26% of total income.
In contrast to Dutch competitor ING's recent disappointing performance and outlook amid ongoing interest rate cuts by the European Central Bank, KBC, with non-NII income making up 50% of total revenue compared to ING's 32%, is better positioned for a low-interest rate environment.
KBC's strong presence in Central and Eastern Europe, where central banks are maintaining higher interest rates, provides insulation from . Notably, its Czech Republic subsidiary reported a 33% increase in net profit quarter-on-quarter.
(Note: The original text is incomplete in the last paragraph)