KBC Updates Outlook on New Accounting Standards; Sees No Impact on Key Ratios

By Adria Calatayud

KBC Group NV said Tuesday that it is updating its guidance for the short and long term as the implementation of IFRS 17 accounting standards will materially change its income statement, but that the new rules don't affect its key ratios.

The Belgian financial-services group said it now expects total income for the year to be 11.15 billion euros ($12.19 billion) under IFRS 17 compared with EUR9.4 billion under IFRS 4. Total operating expenditures for 2023 is expected to be EUR4.75 billion compared with EUR4.4 billion under the previous accounting standards, KBC said.

KBC's total income is expected to grow at a compound annual rate of around 7.3% between 2022 and 2025, against previous expectations of a 6.6% annual growth rate over the period. Operating expenses are forecast to rise 2.3% between 2022 and 2025 compared with a 1.8% rise expected previously.

The group said the new rules relating to the recognition, measurement and presentation of insurance contracts affect it as it is an integrated bank-insurer, and are mandatory for the reporting period starting Jan. 1. The change doesn't affect KBC's common equity ratio, its capital-distribution policy nor its insurance arm's solvency II ratio, a measure of financial stability.

Write to Adria Calatayud at adria.calatayud@dowjones.com

(END) Dow Jones Newswires

April 18, 2023 02:45 ET (06:45 GMT)

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