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KBC Group SA/NV KBC

Rating as of

Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

KBC's Third-Quarter 2021: Loan Loss Provision Releases Drives Earnings Beat

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

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.

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Company Profile

Business Description

KBC was formed in 1998 by the merger of Belgian commercial bank Kredietbank, cooperative farmers bank CERA Bank, and cooperative insurer ABB Verzekering. KBC offers banking, insurance, and investment products. Belgium and the Czech Republic account for bulk of KBC's profits, while the bank has smaller operations in Hungary, Slovakia, and Bulgaria.

Contact
Havenlaan 2
Brussels, 1080, Belgium
T +32 78353137
Sector Financial Services
Industry Banks - Regional
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 37,137