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1. Company Snapshot

1.a. Company Description

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients.The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services.It also provides Internet and mobile banking services.


As of December 31, 2021, it operated 439 bank branches and 310 insurance agencies in Belgium; 208 bank branches in the Czech Republic; 123 bank branches in Slovakia; 198 bank branches in Hungary; 168 bank branches in Bulgaria; and 12 bank branches in Ireland.KBC Group NV serves customers through agents, brokers, and various electronic channels.The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005.


KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.

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1.b. Last Insights on KBC

KBC Group NV's recent performance was driven by a strong Q2 2025 net profit of €1,018 million, exceeding expectations. The company's solid earnings prospects led to an upgrade to a Zacks Rank #1 (Strong Buy). A robust capital position was also highlighted in the 2025 EU-wide EBA stress test. Additionally, a significant shareholder, FMR, reported a 3.29% stake, crossing the 3% reporting threshold. The company's strong fundamentals and consistent earnings make it an attractive dividend stock, with a focus on providing reliable income streams.

1.c. Company Highlights

2. KBC Group's Q3 2025 Earnings: Strong Performance Across the Board

KBC Group's third-quarter 2025 net results stood at an excellent EUR 1.02 billion, beating analyst estimates, with an actual EPS of '2.47' compared to estimates of '2.35'. The group's financial performance was characterized by a balanced income split between net interest income and non-interest income. The net interest income grew by 10% year-over-year, driven by strong loan growth of 8%. The fee business and insurance business also grew significantly, with a 6% increase in fee and commission income and an 8% rise in insurance income. The cost-to-income ratio improved to 41% from 43% in 2024, with costs under control, growing by less than 1% compared to the same quarter last year, excluding bank tax.

Publication Date: Nov -14

📋 Highlights
  • Strong Q3 Net Result: KBC recorded EUR 1.02 billion net profit in Q3 2025, with balanced income from net interest (10% Y/Y growth) and non-interest sources (6% fee income, 8% insurance income).
  • Revised Net Interest Income Guidance: Raised to at least EUR 5.95 billion for 2025, driven by 8% Y/Y loan growth and disciplined cost control (cost-to-income ratio improved to 41%, down from 43% in 2024).
  • Robust Capital and Solvency: CET1 ratio at 14.9%, solvency ratio of 216%, and leverage ratio of 5.8%, supported by low credit cost ratio (12 bps) and EUR 103 million loan impairment buffer.
  • Digitization and Efficiency Gains: 5.8 million users on digital platform Kate, with 70% of queries handled autonomously; Kate 2.0 trials show 15% autonomy increase, targeting higher productivity and cost savings.
  • Strategic Growth and M&A: Inaugural EUR 4.2 billion SRT freed 23 bps of capital; focused on Ethias acquisition (expected 2026-2027) and sustained loan growth in Central Europe (12% mortgage growth in Bulgaria, Czech Republic).

Strong Loan Growth and Credit Quality

The group's loan growth was driven by a more disciplined market and KBC's strong performance, with a focus on margins. As Bartel Puelinckx noted, "loan growth is driven by a more disciplined market and KBC's strong performance, with a focus on margins." The credit cost ratio remained low at 12 basis points, and the NPL ratio is 1.8%, substantially lower than the European average. The group's impairments on its loan book are very low, with a release of EUR 9 million booked, making the buffer stand at EUR 103 million.

Capital Position and Dividend Policy

The bank's capital position is strong, with a CET1 ratio of 14.9%, mainly driven by an increase in risk-weighted assets due to growth in the lending book. Johan Thijs indicated that KBC's CET1 capital ratio could be close to 13% by the end of 2026. The bank's dividend policy prioritizes organic growth and M&A, with a payout ratio of 50-65%. The group issued an interim dividend of EUR 1 per share, paid on November 7.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) of 1.66 and a Dividend Yield of 2.72%, KBC Group's valuation appears reasonable. Analysts estimate next year's revenue growth at 7.8%, which is slightly higher than the group's guidance for 2025. The group's guidance for 2025 includes a total income growth of at least 7.5% and a cost growth of around 2.5%. The bank expects the economy to slightly pick up in 2026, with a growth rate of roughly 1% in Western Europe and double that in Central Europe.

Digital Platform and M&A

KBC's digital platform, Kate, continues to grow, with 5.8 million customers using the service and 7 out of 10 customer queries being dealt with autonomously. The group also announced the acquisition of Business Lease in Slovakia and Czech Republic and its inaugural SRT, which will free up 23 basis points of capital. KBC is focused on Ethias, but there are no other active M&A files, and there is no interest in returning to Ireland.

3. NewsRoom

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Is It Too Late To Consider KBC Ancora After Its 37.5% 2025 Surge?

Dec -04

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KBC Group: Third-quarter result of 1 002 million euros

Nov -13

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European Dividend Stocks Offering Up To 5.5% Yield For Income Growth

Nov -03

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Financial Services Roundup: Market Talk

Oct -31

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KBC Group: KBC’s capital remains well above the new minimum capital requirements

Oct -30

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KBC Group to buy Business Lease Czech Republic and Slovakia

Oct -24

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KBC Group strengthens its position in Central Europe with the acquisition of Business Lease in the Czech Republic and Slovakia

Oct -23

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3 Top European Dividend Stocks To Consider

Oct -02

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.90%)

6. Segments

Belgium Business

Expected Growth: 5.5%

The Belgian banking market is mature, and growth is expected to be moderate. The segment's strong market position and diversified revenue streams support a growth rate slightly below the global hypothesis of 5.9%. The economic conditions in Belgium, including low interest rates, may also impact growth.

Czech Republic Business

Expected Growth: 6.2%

The Czech Republic's economy is growing, and the banking market is expected to expand. The segment's strong presence and diversified revenue streams position it for growth above the global hypothesis of 5.9%. The increasing demand for financial services in the country also supports a higher growth rate.

International Markets - Hungary

Expected Growth: 6.0%

Hungary's economy is recovering, and the banking market is expected to grow. The segment's presence and diversified revenue streams support a growth rate above the global average. However, the segment's growth is slightly tempered by the competitive market conditions in Hungary.

International Markets - Bulgaria

Expected Growth: 6.5%

Bulgaria's economy is growing, and the banking market is expected to expand. The segment's presence and diversified revenue streams position it for strong growth. The increasing financial penetration and demand for banking services in the country support a growth rate above the global hypothesis of 5.9%.

International Markets - Slovakia

Expected Growth: 5.8%

Slovakia's economy is growing, and the banking market is expected to expand moderately. The segment's presence and diversified revenue streams support a growth rate in line with the global hypothesis of 5.9%. The competitive market conditions in Slovakia may slightly temper the segment's growth.

Group Centre

Expected Growth: 5.9%

As the Group Centre provides support services to the various business segments, its growth is expected to be in line with the global hypothesis of 5.9%. The segment's role in managing the group's corporate functions and providing support services is essential to the group's overall operations, and its growth is expected to be stable.

7. Detailed Products

Retail Banking

KBC Group NV offers a range of retail banking services, including current and savings accounts, credit cards, personal loans, and mortgages.

Private Banking

KBC Group NV provides private banking services to high net worth individuals, offering personalized investment advice, wealth management, and estate planning.

Corporate Banking

KBC Group NV offers corporate banking services to businesses, including cash management, trade finance, and risk management solutions.

Insurance

KBC Group NV provides a range of insurance products, including life insurance, non-life insurance, and pension plans.

Asset Management

KBC Group NV offers asset management services, including investment funds, exchange-traded funds, and discretionary portfolio management.

Markets and Treasury

KBC Group NV provides markets and treasury services, including foreign exchange, commodities, and interest rate hedging solutions.

8. KBC Group NV's Porter Forces

Forces Ranking

Threat Of Substitutes

KBC Group NV operates in a highly competitive market, and customers have various alternatives to choose from. However, the company's strong brand reputation and diversified product offerings mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

KBC Group NV's customers have significant bargaining power due to the availability of alternative financial services providers. The company's large customer base and diversified product offerings help to mitigate this power to some extent.

Bargaining Power Of Suppliers

KBC Group NV has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term relationships with suppliers also help to mitigate supplier power.

Threat Of New Entrants

The threat of new entrants in the financial services industry is relatively low due to the high barriers to entry, including regulatory requirements and significant capital investments. KBC Group NV's established brand reputation and diversified product offerings also make it difficult for new entrants to gain market share.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share. KBC Group NV's strong brand reputation, diversified product offerings, and strategic partnerships help the company to maintain its competitive position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 56.40%
Debt Cost 9.95%
Equity Weight 43.60%
Equity Cost 9.95%
WACC 9.95%
Leverage 129.34%

11. Quality Control: KBC Group NV passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
KBC

A-Score: 7.4/10

Value: 6.9

Growth: 6.0

Quality: 6.7

Yield: 7.5

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Swedbank

A-Score: 7.0/10

Value: 5.1

Growth: 8.2

Quality: 6.0

Yield: 5.0

Momentum: 9.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Danske Bank

A-Score: 6.8/10

Value: 5.5

Growth: 4.4

Quality: 5.6

Yield: 8.1

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
UniCredit

A-Score: 6.7/10

Value: 6.2

Growth: 5.9

Quality: 6.8

Yield: 6.9

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Lloyds Banking

A-Score: 6.3/10

Value: 6.6

Growth: 2.8

Quality: 5.6

Yield: 6.9

Momentum: 8.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Deutsche Bank

A-Score: 5.8/10

Value: 8.3

Growth: 3.4

Quality: 5.9

Yield: 3.1

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

106.75$

Current Price

106.75$

Potential

-0.00%

Expected Cash-Flows