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Belfius H1 profit falls YOY; chairman hints at diversifying earnings further

Belfius Banque SA Chairman Jos Clijsters said difficult market conditions are making it necessary for the Belgian lender to diversify its earnings further, as it reported a year-over-year decline in first-half profit.

Belfius' consolidated first-half profit attributable to equity holders of the parent fell to €335 million under IFRS 9 from the year-ago €361 million under IAS 39. Attributable result from the banking group decreased on a yearly basis to €185 million from €235 million, while the attributable result from the insurance group increased to €149 million from €126 million over the period.

Consolidated income amounted to €1.17 billion in the half, up from €1.14 billion a year ago, while consolidated expenses rose to €690 million from the year-ago €662 million.

"Once more this year our half-yearly results offer us the opportunity to pay an interim dividend of €100 million to our shareholder and confirm our conviction that Belfius is ready for a possible IPO," Clijsters said.

"Nevertheless, the difficult rate and market context make it necessary to diversify our earnings further and to continue in the efforts we have been making over last years to control costs and to achieve operational excellence."

Belgian Finance Minister Johan Van Overtveldt said in July that the government will sell 30% of the bank in the potential IPO although a final decision on the timing is yet to be made.

Return on equity was 7.8% as of June 30, up from 7.0% as of Dec. 31, 2017. The group's cost-to-income ratio also increased to 58.8% as of June-end from 58.1% as of 2017-end.

Its fully loaded common equity Tier 1 ratio was 16.3% as of June 30, up from 15.9% as of Dec. 31, 2017. The fully loaded leverage ratio also increased to 5.9% from 5.5% over the period.

The bank's pre-dividend Solvency II ratio fell to 216% at June-end from 230% at 2017-end. Post-dividend, the ratio also decreased to 210% from 219% over the period.