KBC slightly beats consensus with 1 billion euros quarterly profit

Core Viewpoint - KBC Group reported a fourth quarter net income of 1 billion euros, slightly exceeding analyst expectations, despite a 10% year-on-year decline due to a previous one-off tax benefit [1] Financial Performance - The net interest income (NII) grew by 12% year-on-year to 1.61 billion euros, contributing to a full year total NII of 6.1 billion euros, surpassing the previous target of 5.95 billion euros [1] - KBC's total income for 2026 is projected to grow at least 9.9% year-on-year, with an expected NII of 6.73 billion euros or more [1] - The combined ratio of the non-life insurance division improved to 87% from 90% in 2024, indicating profitability in that segment [1] Strategic Initiatives - KBC's strategy involved locking in long-term bonds early in the rate-hiking cycle, which has provided stability despite sacrificing short-term reinvestment gains [1] - The company has set new medium and long-term financial targets, aiming for a cost-to-income ratio below 38% by the end of 2028 and a total income increase of at least 7.7% [1] Dividend Proposal - KBC proposed a dividend of 5.1 euros per share for 2025, resulting in a pay-out ratio of 60% of its yearly net profit, aligning with the upper end of its guidance [1]