KBC Group: Greece has impacted the 3Q results

11 November 2011 — Vlad BOLDIJAR
KBC Group: Greece has impacted the 3Q results
jan_vanhevelKBC Group ended the third quarter of 2011 with an underlying net result of EUR -248 million but excluding one-off items induced by the prevailing and exceptional market circumstances, the net result would have amounted to EUR 222 million. This compares with EUR 528 million in 2Q 2011 and EUR 445 million in 3Q2010. "The underlying result for the first nine months of 2011 amounted to EUR 937 million, compared to EUR 1,542 million for the corresponding period in 2010", according to the earnings statement published by the company.

"Unfortunately, the third quarter results were also affected significantly by exceptional items related to the uncertain macroeconomic climate and challenging, turbulent market conditions. We are disappointed to record a loss in the third quarter, largely on account of these market-driven items", declared Jan VANHEVEL, Group CEO.

"However, our core strengths remain fundamentally sound and we have a very solid customer base in our core markets of Belgium and Central Europe, where there was further loan and deposit growth, and an excellent underlying insurance performance. Our liquidity profile is robust and supported by a stable and resilient customer deposit base. Moreover, our solvency position is and remains strong and has enabled us to continue to increase lending to our customers", added Jan VANHEVEL.

According to the press release, the Belgium Business Unit contributed EUR 32 million to profit in 3Q 2011. This was EUR 206 million less than in 2Q 2011. "The quarter was characterized by stable net interest income, excellent insurance results and a very low level of loan impairments. The quarter-on-quarter decrease is entirely related to a provision of EUR 132 million (pre-tax) on the contingent repayment intention that KBC has provided its retail clients in relation to 5-5-5 products, and to significant impairment on shares and Greek government bonds in the investment portfolio".

The CEE Business Unit (Czech Republic, Slovakia, Hungary and Bulgaria) posted a loss of EUR 40 million in 3Q 2011, as opposed to a profit of EUR 146 million in the previous quarter. The decrease was almost entirely due to the impairment taken on the loan portfolios of Hungary (forex mortgages) and Bulgaria, and on Greek government bonds.

Analyzing the first five months of 2011, the net of technical charges and the ceded reinsurance result, technical insurance income came to EUR 379 million, up a 57% on the year-earlier figure. "The first nine months of 2011 were characterized by a relatively low level of claims. The combined ratio for the group's non-life insurance companies came to an excellent 90% for January-September 2011 (85% in Belgium, 93% in CEE), a significant improvement on the 100% for the full year 2010", show the earnings statement published by the company.

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