KBC Third-Quarter 2020: Solid Earnings Beat

In a return to form narrow-moat KBC Group reported net attributable profits of EUR 697 million for the third quarter of 2020, exceeding both the EUR 612 million it reported for the third quarter of 2019 and the EUR 600 million consensus expectation of analysts collected by KBC itself. The earnings beat was primarily driven by stronger-than-anticipated asset growth and loan-loss provisions declining further than expected. We increase our fair value estimate to EUR 58/share from EUR 54/share previously--mainly as a result of stronger-than-anticipated volume growth we have seen from KBC. We maintain our narrow moat rating.