May 14, 2020 / 5:49 AM / 22 days ago

BRIEF-KBC Group: Q1 Net Loss At EUR 5 Mln As Trading Impacted By Coronavirus Pandemic

May 14 (Reuters) - KBC GROEP NV:

* Q1 RESULT OF -5 MILLION EUROS

* Q1 COMMON EQUITY RATIO OF 16.3% ON A FULLY LOADED BASIS

* Q1 NON-LIFE INSURANCE (BEFORE REINSURANCE) EUR 185 MILLION VERSUS EUR 159 MILLION IN COMPANY-COMPILED POLL

* 2020 NET INTEREST INCOME GUIDANCE HAS BEEN LOWERED FROM 4.65 BILLION EUROS TO APPROXIMATELY 4.3 BILLION EUROS, MAINLY DUE TO CNB RATE CUTS (ROUGHLY -0.2 BILLION EUROS) AND DEPRECIATION OF CZK AND HUF VERSUS EUR (ROUGHLY -0.1 BILLION EUROS)

* Q1 LIFE INSURANCE (BEFORE REINSURANCE) EUR 0 MILLION VERSUS LOSS OF EUR 2 MILLION IN COMPANY-COMPLIED CONSENS

* Q1 TOTAL INCOME EUR 1.48 BILLION VERSUS EUR 1.42 BILLION IN COMPANY-COMPILED POLL

* FY 2020 GUIDANCE FOR OPERATING EXPENSES EXCLUDING BANK TAXES HAS BEEN CHANGED FROM MAXIMUM +1.6% YEAR-ON-YEAR TOWARDS ABOUT -3.5% YEAR-ON-YEAR DUE TO EXTRA COST SAVINGS

* BASEL 4 HAS BEEN POSTPONED BY 1 YEAR (AS OF 1 JANUARY 2023 INSTEAD OF 2022)

* ON COVID-19: AS REGARDS OUR FINANCIAL RESULTS, WE INCURRED A NET LOSS OF 5 MILLION EUROS IN THE FIRST QUARTER OF 2020, CAUSED MAINLY BY THE IMPACT OF THE WORLDWIDE CORONAVIRUS OUTBREAK ON OUR TRADING AND FAIR VALUE RESULT AND THE UPFRONT BOOKING OF BANK TAXES

* Q1 LOSS BEFORE TAX EUR 3 MILLION

* IMPACT OF COVID-LOCKDOWN ON DIGITAL SALES, SERVICES AND DIGITAL SIGNING SO FAR HAS BEEN VERY POSITIVE

* ON COVID-19: IMPACT OF THE CORONAVIRUS CRISIS ON THE OTHER PROFIT AND LOSS LINES IN Q1 WAS LESS PRONOUNCED

* WE ESTIMATE FULL-YEAR 2020 IMPAIRMENTS AT ROUGHLY 1.1 BILLION EUROS (BASE SCENARIO)

* Q1 NET INTEREST INCOME EUR 1.20 BILLION

* ON COVID-19: LOAN LOSS PROVISIONS INCREASED IN Q1 AND INCLUDED AN ADDITIONAL 43 MILLION EUROS SPECIFICALLY RELATED TO THE CORONAVIRUS CRISIS, BASED ON OUR EXPOSURE TO SECTORS WE BELIEVE WILL BE AFFECTED MOST BY THE CRISIS

* WE ESTIMATE FY 2020 IMPAIRMENT TO RANGE BETWEEN ROUGHLY 0.8 BILLION EUROS (OPTIMISTIC SCENARIO) AND ROUGHLY 1.6 BILLION EUROS (PESSIMISTIC SCENARIO)

* ON COVID-19: IN Q1 TRADING AND FAIR VALUE RESULT CAME TO A NEGATIVE 0.4 BILLION EUROS, AS A RESULT OF A NUMBER OF MARKETDRIVEN FACTORS, SUCH AS SHARPLY LOWER STOCK MARKETS, WIDENING CREDIT SPREADS AND LOWER LONG-TERM INTEREST RATES

* NO FINAL DIVIDEND WILL BE PAID IN MAY

* OUR SOLVENCY POSITION REMAINED VERY STRONG, WITH A COMMON EQUITY RATIO OF 16.3% ON A FULLY LOADED BASIS, WELL ABOVE THE CURRENT MINIMUM CAPITAL REQUIREMENT OF 8.05%

* ECONOMIC GROWTH IN 2020 WILL MOVE INTO NEGATIVE TERRITORY IN EURO AREA AND US AS CONSEQUENCE OF DEMANDAND SUPPLY-SIDE DISRUPTIONS TRIGGERED BY CORONAVIRUS

* LIQUIDITY POSITION REMAINED SOLID TOO, WITH AN LCR OF 135% AND AN NSFR OF 134% AT THE END OF MARCH 2020

* ENVISAGE A STRONG RECOVERY IN 2021

* END-Q1 CET1 RATIO OF 16.3 % VERSUS 16.6% IN COMPANY-COMPILED POLL Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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