KBC (KBC.BR), Belgium’s largest bank, reported a fourth-quarter net income of 1 billion euros ($1.19 billion), a 10% decrease year-on-year. Despite the decline, the result narrowly surpassed analyst expectations of 973 million euros. Shares in KBC saw a boost in early Brussels trading, rising approximately 2.5% following the announcement. KBC provides a range of banking, insurance, and asset management services. The company has benefitted from a strategy of securing long-term bonds early in the rate-hiking cycle.
The bank attributed its total income growth to several factors, including higher net interest income (NII), increased trading and fair value income, higher insurance revenues, and increased net fee and commission income. KBC’s quarterly net interest income, the difference between interest earned on loans and interest paid to depositors, grew by 12% year-on-year. This brought the bank’s full-year NII to 6.1 billion euros, exceeding its previous target of 5.95 billion euros.
KBC also outlined new medium- and long-term targets. The bank projects total income for 2026 to grow by at least 9.9% year-on-year, with net interest income expected to reach 6.73 billion euros or more. By the end of 2028, the group aims to achieve a cost-to-income ratio below 38% and generate total income at least 7.7% higher than current levels.
Furthermore, KBC proposed a dividend of 5.1 euros per share for 2025, representing a payout ratio of 60% of its yearly net profit. The combined ratio of its non-life insurance division, which accounts for 22% of revenue, improved to 87% from 90% in 2024, indicating improved profitability in its insurance business.
