Company Reports

SpaceX has filed for one of the largest IPOs in history, with Anthropic and OpenAI expected to follow in the most significant fundraising cycle in years. No European bank holds a lead equity arranger role; that honor belongs to five US banks.

KBC Group has consistently been one of the most profitable banks in our coverage in the eurozone. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

Over the past three years, KBC Group has been one of the most profitable banks in our coverage in the eurozone. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

KBC reported another strong quarter, with earnings growing 10% year over year, ahead of company-compiled consensus. All top-line segments contributed positively, while cost growth was slower. The share price rose 5% at the market open on Aug. 7.

Over the past three years, KBC Group has been the most profitable bank in our coverage in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

Over the past three years, KBC Group has been the most profitable bank in our coverage in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

KBC's first-quarter 2025 profit rose 8% year on year, surpassing company-compiled consensus. Loan growth boosted interest income by 4%, while fee income jumped 12%. The bank eased its strict capital targets and now favors investment in growth over buybacks. Credit quality remained sound.

Narrow-moat KBC reported a net profit of EUR 868 million for the third quarter of 2024, broadly in line with the third quarter of 2023, but 8% ahead of company-compiled consensus.

Narrow-moat KBC reported a net profit of EUR 925 million for the second quarter of 2024, 4% lower than the year before. However, net profit was 7% ahead of company-compiled consensus, with especially lower-than-expected operating expenses contributing to the earnings beat. KBC increased its guidance for fiscal 2024 net interest income slightly on the back of robust loan growth and stable margins. Fee income grew by 7% as it benefited from higher asset management fees due to higher market valuations. Normalizing claims ratios led to a 5% decline in the net result of KBC’s insurance operations. We keep our EUR 72/share fair value estimate.

Narrow-moat KBC delivered decent results for the first quarter of 2024, comfortably ahead of company-compiled consensus. Main top-line items outperformed the previous quarter and the respective period of the last year. The strongest growth was recorded in the fee and commission income of 7% year over year, well complemented by 3% in insurance. Net interest margins showed resilience resulting in net interest income, or NII, growth of 3% year over year. KBC managed to get a record result in assets under management inflows and life insurance sales. This contribution is partially attributed to a market tailwind yet in line with KBC's focus on insurance and fee income products. We applaud the ability of the bank to migrate client base from current accounts to mutual funds adding to sticky and long-lived client relationships.

Over the past three years, KBC Group has been the most profitable bank in our coverage in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

Narrow-moat KBC reported fourth-quarter 2024 results that were broadly in line with expectations. Guidance from management for the next three years is more bullish than what we and the company-compiled consensus currently have in our models. KBC expects a modest growth in net interest income. The firm also expects that positive loan volume growth will offset the ongoing pressure on deposit interest rates and the potential impact of lower interest rates. KBC is also guiding a much better outcome for loan loss provisions, with the credit loss ratio remaining below midcycle levels over the next three years while we are currently building in normalization to midcycle levels. The guided outcome for operating expense growth is also slightly better than what we are currently factoring in. Considering all, it would suggest that KBC still expects earnings growth despite the potential headwind from declining interest rates. KBC is one of the few European banks that could still deliver positive earnings momentum over the next few years.

Over the past three years, KBC Group has been the most profitable bank that we cover in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

We are dropping coverage of some of our European banks and asset managers. We will no longer be reporting on Santander, Credit Agricole, Julius Baer, Unicredit, Intesa Sanpaolo, Mediobanca, Amundi, KBC, DWS Group, BBVA, and Schroders. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

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.

Narrow-moat KBC reported a net profit of EUR 601 million for the third quarter of 2021, 14% lower than the EUR 697 million it reported for the third quarter of 2020, but 20% ahead of the EUR 501 million the consensus of analysts collected by the company itself had penciled in for the quarter. The earnings beat was mostly due to KBC booking a net loan loss reversal for the quarter while consensus expected a charge for loan losses. Revenue growth was virtually flat year on year while expenses grew by 11% leading to a 9% decline in pre-provision profits. A EUR 81 million once off charge for staff redundancies in Ireland inflated the operating expenses for the quarter. Excluding the redundancy charge, expenses grew by 2% year on year. We keep our fair value estimate of EUR 62.50 per share and our narrow moat rating.

We believe that KBC allocates capital in an exemplary fashion. KBC has a very strong balance sheet. It invests in the business areas where it has a competitive advantage, and it exits business where it does not have an edge. When KBC cannot invest capital profitably, it will return surplus capital to shareholders. We maintain our EUR 62.50 fair value estimate and our narrow economic moat rating.

Over the past three years, KBC Group has been the most profitable bank that we cover in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

Over the past three years, KBC Group has been the most profitable bank that we cover in the eurozone. Only the Scandinavian banks have been more profitable in Europe as a whole. We believe that KBC can consistently generate returns on tangible equity comfortably in excess of our cost of equity estimate of around 10%.

Narrow-moat KBC performed very well under the recent ECB stress test. Its 2023 common equity Tier 1 ratio under the adverse scenario of the stress test came to 14%, which is well above the 10.5% regulatory minimum common equity Tier 1 ratio KBC would need to keep to be able to pay dividends. Under the adverse scenario, only three banks we follow had a higher buffer than KBC over its minimum capital requirement. KBC’s adverse 2023 common equity Tier 1 ratio was 3.6% lower than the 17.6% KBC reported for 2020. The decline was lower than the average decrease of 4.6% that the European banks we cover experienced under the stress test. If we compare KBC’s operational performance under the base and adverse scenarios, its loan loss provisions increased to a similar extent as its peers. The decline in its revenue was among the lowest of the European banks that we cover. We maintain our narrow moat rating and our EUR 61 per share fair value estimate.