Financial guidance at KBC Group level

 

The table provides an overview of KBC Group’s financial guidance.

Financial guidance   By
CAGR total income (’16-’20) (excl. MTM valuation of ALM derivatives) ≥ 2.25%

2020

Cost/income ratio banking (excl./ incl. banking tax) ≤ 47% / ≤ 54%

2020

Combined ratio ≤ 94%

2020

Dividend payout ratio (incl. coupon paid on AT1) ≥ 50% -
 
Regulatory requirements   By
Common equity tier-1 ratio (excl. / incl. P2G)* ≥ 10.7% / ≥ 11.7% 2019
MREL ratio ≥ 25.9% 2019
NSFR ≥ 100% -
LCR ≥ 100% -

* Fully loaded, Danish compromise, P2G= additional pillar 2 guidance

KBC aims to be one of the better capitalised financial institutions in Europe. Therefore as a starting position, we assess each year the CET1 ratios of a peer group of European banks active in the retail, SME, and corporate client segments and we position ourselves on the fully loaded median CET1 ratio of the peer group. We summarize this capital policy in our ‘Own Capital Target’, which currently amounts to 14% CET1. On top of this KBC wants to keep a flexible additional buffer of up to 2% CET1 for potential add-on mergers and acquisitions in our core markets. Any M&A opportunity will be assessed subject to very strict financial and strategic criteria. The agreement (in April 2019) to acquire the remaining 45% in CMSS will have an impact of approximately -0.30 percentage points on the CET1 ratio and as a result, will lower the 2% buffer to 1.70%. This buffer comes on top of the ‘Own Capital Target’ of KBC Group, and all together forms the Reference Capital Position, which currently amounts to 16% (15.7% after the CMSS transaction closing, expected by end 2Q2019).

We reconfirm our payout ratio policy (i.e. dividend + coupon paid on the outstanding Additional Tier 1 instruments) of at least 50% of consolidated profit, including an annual interim dividend of 1 euro per share paid in November of each accounting year as an advance on the total dividend. On top of the payout ratio of 50% of consolidated profit, each year the Board of Directors will take a decision, at its discretion, on the distribution of the capital above the Reference Capital Position.

 

Financial guidance versus achievements

Financial guidance - achievements  
FY2019 Download
FY2018 Download
FY2017 Download
FY2016 Download
FY2015 Download

 

Last update: 14-05-2020

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