Key figures
|
In millions of EUR |
4Q 04
(Pro forma IFRS 2004) |
3Q 05
(IFRS 2005) |
4Q 05
(IFRS 2005) |
FY 04
(Pro forma
IFRS 2004) |
FY 05
(IFRS 2005) |
|
CONSOLIDATED PROFIT
- Banking
- Insurance
- Asset management
- European private banking
- Gevaert
- Holding-company activities |
440
318
89
66
-30
25
-27 |
543
363
120
74
39
-38
-14 |
453
313
95
86
51
-56
-36 |
1 615
1 263
122
228
74
-12
-59 |
2 249
1 459
462
286
184
-32
-109 |
The earnings release and its appendices are available in English, Dutch, French and German at
www.kbc.com along with a PowerPoint presentation and the provisional financial statement for the year (both in English).
Financial highlights, 4Q 2005
The fourth quarter was characterised by consistently strong earnings from sales. Sales of life insurance, at 3.1 billion euros, reached a new record level (2.5 billion euros of this amount came from unit-linked products, which is not recognised as 'premium income'), home loans increased by 1.8 billion euros (+6%) and assets under management went up by 6% compared to the start of the quarter.
Developments on the interest rate and capital markets had a predominantly positive effect.
As announced, one-off charges (100 million euros) linked to pension provisions were recognised. Higher result-based wage costs were also incurred, as well as costs linked to the real-estate project in Prague (which includes the building of a new head office for the banking business in the Czech Republic, among other things) and various seasonal expenses.
There were no additional net loan losses incurred.
The handsome technical results achieved in the non-life insurance business in the preceding quarters continued.
Financial highlights, FY 2005
Profit came to 2 249 million euros, with a return on equity of 18%.
Compared to the start of the year, customer deposits were up by 14 billion euros (+8% excluding deposits by professional counterparties), the loan portfolio by 8 billion euros (+12% excluding loans and advances to professional counterparties) and life insurance reserves by 5 billion euros (+38%). As a result, net interest income rose to 4.3 billion euros (although the increase was enhanced by the new IFRS valuation rules).
Premium income from insurance is not comparable with the 2004 figure, owing to the new accounting treatment. On a comparable basis, the premium inflow went up by 56% to 8.0 billion euros.
Net fee and commission income went up by 415 million euros, thanks largely to successful sales of investment funds and life insurance and wealth management services. Compared with year-end 2004, assets under management increased by 40 billion euros (+25%).
Capital gains on the investment portfolio (458 million euros) were somewhat lower than in 2004.
The level of charges (4.9 billion euros) fell by 1% and the cost/income ratio in banking dropped to 60%.
Provisions for problem loans remained limited to 35 million euros (loan loss ratio of 0.01%). In contrast to 2004, no impairment worthy of note was recorded on the investment portfolio. The combined ratio for the non-life insurance business came to 96%.
The return on capital allocated to the retail and private bancassurance business in Belgium came to 28%; the return on capital allocated to Central and Eastern Europe amounted to 39%. On capital allocated to the European private banking business, the return came to 32%, while capital allocated to services to businesses generated a return of 24% and that allocated to capital market activities one of 32%.
General Meeting of Shareholders/Dividend
The Board of Directors will propose to the shareholders on 27 April 2006 that a gross dividend per share of 2.51 euros (36% higher than 2004) be paid out. This corresponds to 40% of the earnings per share. Proposals will also be submitted to already cancel 3.5 million repurchased treasury shares and to carry out a merger by acquisition of Gevaert NV by KBC Group NV.
Outlook for 2006
KBC is confident about the growth potential inherent in its corporate strategy and currently believes that the surrounding economic conditions will develop favourably, and is, therefore, predominantly optimistic about 2006. Moreover, the share buyback programme will be completed in 2006, which will further underpin the growth in earnings per share.
KBC Investor Relations Office
