KBC Fourth-Quarter 2021: Special Dividend and Healthy Pre-Provision Profit Growth Guidance

Narrow-moat KBC reported a net profit of EUR 663 million for the fourth quarter of 2021, 10% higher than the EUR 601 million it reported for the fourth quarter of 2020 and slightly ahead of the EUR 635 million the consensus of analysts collected by KBC had penciled in for the quarter. In addition to the EUR 4 per share share ordinary dividend (66% fiscal 2021 earnings), KBC intends to pay a EUR 4.60 per share special dividend. KBC also committed itself to an annual return of any excess capital above its 15% common equity Tier 1 ratio target. We like the clarity that the new distribution policy brings while maintaining flexibility. Due to its high profitability, KBC generates significant capital organically, which positions it well to continue returning capital to shareholders.