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KBC Group Q1 profit falls YOY

Belgian bank KBC Group NV reported first-quarter net profit attributable to equity holders of the parent of €556 million under IFRS 9, down from €630 million under IAS 39 in the year-ago period.

EPS for the quarter was €1.30, compared to €1.47 a year earlier. Return on equity was 14%, compared to 17% for full year 2017.

CEO Johan Thijs said the result was impacted by the upfront recognition of the bulk of the group's banking taxes for the full year 2018, amounting to €371 million for the first quarter. However, the quarter benefited from a €63 million release of loan loss provisions, mainly on account of the group's Irish mortgage book.

Net interest income rose on a yearly basis to €1.13 billion from €1.03 billion, while net fee and commission income also increased to €450 million from €439 million.

The nonlife insurance business' income before reinsurance dipped year over year to €162 million from €187 million. The life insurance business recorded a loss before reinsurance of €7 million, down from the year-ago loss of €28 million.

The group booked a reversal on impairments of €56 million, compared to a charge of €8 million a year earlier.

The group's fully loaded common equity ratio stood at 15.9% at March-end based on the Basel III Danish Compromise method, compared to 16.3% at the end of 2017. The fully loaded leverage ratio under Basel III stood at 5.7% at the end of March, compared to 6.1% at 2017-end.

KBC Insurance's Solvency II ratio stood at 218% at March-end.

Thijs said the group aims to increase its renewable energy portfolio to more than 50% of its total energy sector portfolio by 2030 from 41% currently. The group aims to exit the coal sector and reduce its current exposure to coal-based electricity production to zero by 2023 at the latest, he added.