Net interest income increased by 5% quarter-on-quarter and by 12% year-on-year. The net interest margin for the quarter under review amounted to 2.11%, up 7 basis points on the previous quarter and 3 basis points year-on-year. Customer loan volumes increased by 1% quarter-on-quarter and by 7% year-on-year. Customer deposits - excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches - were up 2% quarter-on-quarter and 3% year-on-year.

The insurance service result (insurance revenues before reinsurance - insurance service expenses before reinsurance + net result from reinsurance contracts held) amounted to EUR 166.0 million ($179.3 million), compared to EUR 142.0 million ($153.4 million) recorded in the previous quarter and EUR 125.0 million ($135.0 million) in the year-earlier quarter. The insurance service result for the quarter under review breaks down into EUR 107.0 million ($115.6 million) for non-life insurance and EUR 59.0 million ($63.7 million) for life insurance. The non-life insurance combined ratio for full-year 2025 came to an excellent 87%, compared to 90% for full-year 2024. Sales of non-life insurance products grew by 11% year-on-year, while life insurance sales were up 26% on the level recorded in the previous quarter and up 46% on their level in the year-earlier quarter.

Net fee and commission income was up 2% and 4% on its level in the previous and year-earlier quarters, respectively. In both cases, the increase was mainly thanks to higher fees from asset management activities, partly offset by lower fees from banking services. Assets under management were up 3% quarter-on-quarter and 9% year-on-year.

Trading & fair value income and insurance finance income and expense was up EUR 41.0 million ($44.3 million) and EUR 52.0 million ($56.2 million) on the figure for the previous and year-earlier quarters, respectively. Net other income was below its normal run rate.

Operating expenses excluding bank and insurance taxes were up 7% quarter-on-quarter and 2% year-on-year. Bank and insurance taxes were slightly up (by EUR 2.0 million ($2.2 million)) on the previous quarter but down EUR 4.0 million ($4.3 million) on the year-earlier figure. Full-year 2025 operating expenses excluding bank and insurance taxes rose by 2.8% (or 2.5% excluding forex effects) compared to full-year 2024, in line with our guidance. The cost/income ratio for full-year 2025 came to 46%, compared to 47% for full-year 2024. In that calculation, certain non-operating items have been excluded. When excluding all bank and insurance taxes, the cost/income ratio for full-year 2025 amounted to 41%, compared to 43% for full-year 2024.

Loan loss impairment charges amounted to EUR 73.0 million ($78.8 million), compared to EUR 45.0 million ($48.6 million) in the previous quarter and EUR 50.0 million ($54.0 million) in the year-earlier quarter. The figure for the quarter under review included an impairment charge of EUR 76.0 million ($82.1 million) for the loan book (EUR 55.0 million ($59.4 million) in the previous quarter) and a EUR 3.0 million ($3.2 million) release of the reserve for geopolitical and macroeconomic uncertainties (compared to a EUR 9.0 million ($9.7 million) release in the previous quarter). The credit cost ratio for full-year 2025 amounted to 0.13%, compared to 0.10% for full-year 2024. Impairment on assets other than loans amounted to EUR 48.0 million ($51.8 million) in the quarter under review, compared to EUR 5.0 million ($5.4 million) in the previous quarter and EUR 28.0 million ($30.2 million) in the year-earlier quarter.

Income tax expenses amounted to EUR 285.0 million ($307.8 million), compared to EUR 267.0 million ($288.4 million) in the previous quarter and a positive EUR 96.0 million ($103.7 million) in the last quarter of 2024. The latter quarter had been impacted by a one-off tax benefit of EUR 318.0 million ($343.4 million) related to the exit from Ireland.

Our liquidity position remained strong, with an LCR of 159% and NSFR of 138%. Our capital base remained robust, with an unfloored fully loaded common equity ratio of 14.9%* (which includes the impact of the proposed dividend payment).

*For the fully loaded common equity ratio as of 2025, KBC focuses on the so-called ‘unfloored fully loaded common equity ratio’, which takes into account the total impact of Basel IV on risk-weighted assets, excluding the output floor impact.

Johan Thijs, Chief Executive Officer KBC Group:

"We recorded an excellent net profit of EUR 1,003.0 million ($1,083.2 million) in the last quarter of 2025. Compared to the previous quarter, our total income benefited from several factors, including higher net interest income, an increase in trading & fair value income, increased insurance revenues and higher net fee and commission income, clearly illustrating our strong income diversification. On a full-year basis, total income rose by 9%, well above our guided figure. Our loan portfolio continued to expand, growing by 1% quarter-on-quarter and by as much as 7% year-on-year. Customer deposits – excluding volatile, low-margin short-term deposits at KBC Bank’s foreign branches – were up 2% quarter-on-quarter and 3% year-on-year. Operating expenses excluding bank and insurance taxes were up on the previous quarter but remained in line with our guidance for the full year after excluding forex effects. Insurance service expenses after reinsurance were slightly lower, while loan loss impairment charges were up on the level recorded in the previous quarter. The credit cost ratio amounted to a favourable 13 basis points for full-year 2025, well below our guided figure. Consequently, when adding up the results for the four quarters of the year, our full-year 2025 net profit amounted to EUR 3,568.0 million ($3,853.4 million), up 18% on the year-earlier figure when excluding the one-off tax benefit of EUR 318.0 million ($343.4 million) related to the exit from Ireland and the one-off EUR 79.0 million ($85.3 million) gain recorded under ‘Share in results of associated companies & joint ventures’, both in full-year 2024.

Our solvency position remained strong, with an unfloored fully loaded common equity ratio under Basel IV of 14.9% at the end of December 2025. Our liquidity position remained very solid too, as illustrated by an LCR of 159% and an NSFR of 138%.

Our Board of Directors has decided to propose a total gross dividend of EUR 5.1 per share ($5.5 per share) to the General Meeting of Shareholders for the accounting year 2025. That figure includes an interim dividend of EUR 1.0 per share ($1.1 per share) that was already paid in November 2025 and the remaining EUR 4.1 per share ($4.4 per share) to be paid in May 2026. When including the proposed dividend of 5.1 euros per share and additional tier-1 coupon, the pay-out ratio amounts to 60% of 2025 net profit. The past few months have also seen us make considerable progress in implementing our strategy. Besides finalising the acquisition of 365.bank in Slovakia, we were able to close the acquisition of Business Lease in the Czech Republic and Slovakia. The combined impact of approximately 50 basis points on our capital position will be accounted for in the first quarter of 2026.

We aim to lead the way in digital innovation and as such are very happy that Kate, our AI-powered personal digital assistant, has reached 6 million customers in the meantime, up 13% on the year-earlier figure, with an autonomy of 82% in Belgium. We launched the ecosphere ‘MyMobility’, for which we already had 73 000 clients signed up during the first months.

Furthermore, we have updated our short- and long-term financial guidance. By 2028, we are aiming for total income to outgrow operating expenses excluding bank and insurance taxes by at least 3.4 percentage points on average on an annual basis, leading to a cost/income ratio below 38%. We also maintain our guidance to achieve a combined ratio below 91% in non-life insurance.

Lastly, on the sustainability front, we are proud to be included in the CDP Climate A List for the fourth year running and also in the S&P Global Sustainability Yearbook for the seventh consecutive year. Such recognition underscores KBC’s leading position in sustainability reporting and action.

I’d like to take this opportunity to sincerely thank all our employees for their contribution to our group’s continued success. I also wish to thank all our customers, shareholders and all other stakeholders for their trust and support, and to assure them that we remain committed to being the reference in bank-insurance and innovation in all our home markets."

Re-disseminated by The Asian Banker