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KBC’s Q3 shy beat on insurance, fees and LLPs was overshadowed by a miss and a quarterly decline in NII. This was accompanied by an NII guidance downgrade for both 2023 and 2024 which may prompt renewed fears of an NII peak. The total income guidance for 2023 was maintained as this should be offset by other sources of income. Still, the pressure on NII going forward encourages us to remain cautious in our model update.
Companies: KBC Groep (KBC:EBR)KBC Group N.V. (KBC:BRU)
AlphaValue
KBC published a good Q2-23, with the top-line growth being driven by higher NII, fees, trading but also by lower loan losses and impairments, offset by a miss on opex. The management downgraded its 2023 NII guidance due to higher costs on minimum required reserves held with central banks and increased wholesale funding and subordination costs. A €1.3bn buyback was announced and the management upgraded its cost of risk guidance for 2023 to 10-15bp (vs 20-25bp).
KBC published a good Q1 withe the top-line coming in in-line with the consensus despite the miss on NII. The cost line was better than expected despite the significant cost inflation. Asset quality remained very healthy with a net release over the quarter. The 2023 guidance was maintained while the long-term guidance was upgraded. A €1.3bn buyback is to be expected by the end of Q2, mostly composed of a distribution of the capital released by the sale of KBC Ireland.
KBC executed a strong Q4, again carried by higher NII, but also by a stronger insurance result and trading result. Costs were a bit above consensus as well as LLPs. Payout ratio was 60% this year while KBC will execute a €400m buy-back. Management guided for a 2023 total income above consensus and our estimates. NII tailwinds continue to be expected by management going forward.
KBC made a good Q3 thanks to a growing NII on the back of strong volume growth and higher NIM and higher insurance results mostly in P&C. Cost of risk increased a bit, although it was only due to some overlay made for geopolitical and macro-economic uncertainty. Guidance for 2022 was maintained, as well as 2024 guidance.
KBC realized a fairly good Q2 with beats on revenue, costs and LLPs. Management confirmed that the bank is set to benefit from the rising interest rate environment with tailwinds already being felt in the Czech Republic and Hungary, while Belgium, Slovakia and Bulgaria should progressively follow suit. Based on its view of interest rates and inflation, the management upgraded the guidance for both 2022 and 2024 (long-term guidance).
KBC realized a good Q1 22 with beats on both total income and PBT, supported by good revenue growth across the board. Operating expenses were nonetheless a miss due to a mix of regulatory expenses, inflation and one-offs. Cost of risk remained low with provisions being made in relation to the macroeconomic impact of the Ukrainian crisis, offset by Covid-19 provision releases. The guidance was downgraded with the management now expecting a slightly higher cost of risk. Still, positive jaw effects
KBC published slightly lacking Q4 21 results with PBT in line with consensus thanks to lower LLPs. Management’s guidance for FY22 was in line with consensus on income but was lower than expected on NII and was disappointing on costs. Still, guidance for 2022-24 was upgraded for both income and costs, with ambitious cost and fee expectations. One additional positive note came from the commitment by management to make additional capital distributions for any CET1 ratio above a 15% threshold using
KBC Groep released last Friday its numbers for Q3 21. These were overall better than expected, driven by higher fees and commissions (NII in line but should benefit from the increasing rates in Czech Republic). Guidance is better on the costs side with FY2021 growth in expenses expected to be below 2%. We will revise upwards our EPS expectations. KBC also announced this morning the acquisition of Raiffeisen’s Bulgarian banking business for a €1bn amount. It strengthens its position in Bulgaria.
KBC released this morning its numbers for Q4 20. The message was rather mixed as numbers were below expectations with a tone of cautiousness going into 2021, while capital was at a decent level but management looked cautious regarding the distribution of any excess capital (on top of the dividend allowed by the ECB). We will have to downgrade pre-loan losses numbers (reveues and expenses), while it should offset at the EPS level on the back of a lower cost of risk.
KBC released this morning its numbers for Q3 20. The numbers were better across the line as both total revenues and total expenses were above expectations. Loan losses were also below expectations (but mostly expected following previous Eurozone banks’ releases). The CET1 ratio at 16.6% was 10bp above expectations. Guidance in NII for 2020 is slightly revised upwards (due to one-off effects) while the estimate for FY2020 impairments is unchanged at €1.1bn (in line with consensus) with a range b
Companies: KBC Group N.V.
KBC Group (KBC) released this morning its numbers for Q2 20. Net profit was above expectations, driven by revenues and lower expenses (offsetting higher loan losses). Guidance for both loan losses and expenses is unchanged, although the company is expecting slightly higher net interest income (at €4.4bn vs €4.3bn previously). The CET1 ratio at 16.6% is 40bp above expectations. The bank will communicate a strategy update during the Q3 20 results and its long-term guidance with Q4 20 results.
KBC Groep released this morning its numbers for Q1 20. At the pre-provision level, these were higher than expected but the bank’s guidance for FY2020 was well below expectations. Lower net interest income and higher loan losses will indeed more than offset the decrease in total expenses. While the consensus should adjust its numbers downwards, we are comfortable with our estimates which are in line with the bank’s targets. KBC’s CET1 ratio at 16.3% is 70bp lower qoq but comfortably above requir
KBC Group this morning reported its numbers for Q219. Total income was below expectations (-2%) driven by softer net interest income in the quarter. With total expenses in line, profit before loan losses was 4% below expectations. Despite a change in the economic environment (slowing growth), management is maintaining its financial guidance for 2020. The CET1 ratio at 15.6% was 40bps lower QoQ (acquisition of the remaining stakes in the Czech building savings bank CMSS had a -30bps impact on CE
KBC Group released this morning its numbers for 2018 and Q4 18. Total income at €1.85bn is in line with expectations but the mix is more positive than expected with net interest income (NII) at €1.17bn, 2% above expectations. Total expenses were lower than expected at €996m (-3.5%). Hence, profit before loan losses at €852m was 5% above expectations. The CET1 ratio at 16% is flat qoq and 10bp lower than expectations (impact of marked-to-market on equity and IFRS 16). The Basel IV impact is s
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PCI Pal has announced that the Court of Appeal has ruled in its favour in the unfounded patent litigation case brought by Sycurio, and that the Court of Appeal has indicated that it would make an order for £1.1m of funds to be released from escrow to PCI Pal as soon as possible. The Court of Appeal dismissed the appeal after just one day of the two day hearing, and upheld the resounding victory in the UK High Court case in September 2023, including invalidating Sycurio’s patents for prior art an
Companies: PCI-PAL PLC
Cavendish
Companies: Gore Street Energy Storage Fund PLC
Shore Capital
Gresham House Energy Storage Fund (GRID) invests in utility-scale battery energy storage systems (BESS) in Great Britain. GRID and its peers saw sharp share price falls in H223 and early 2024, due mostly to an unexpected decline in revenues and the slower-than-expected utilisation of BESS by the UK’s Electricity System Operator (see our last note). In response to these events, GRID’s manager, Ben Guest, and its board have refocused the company’s use of capital and are now concentrating on maximi
Companies: Gresham House Energy Storage Fund Plc GBP
Edison
For Q124, Regional REIT (RGL) has maintained the rate of quarterly DPS at 1.2p. We expect DPS for the year will partly depend on RGL’s chosen re-financing route. Meanwhile, RGL’s asset disposal programme continues to progress. Portfolio EPC ratings have continued to show good improvement and, adjusted for disposals, rent roll and occupancy were robust. We have made no changes to our forecasts.
Companies: Regional REIT Ltd.
Companies: FOUR PCIP FEN MRL KRM HDD CUSN
Avation, a lessor of 34 commercial aircraft, announced on Friday that it has entered into a sale agreement for two ATR 72-600s on order, with the transaction expected to result in $10m of net cash proceeds to the company. As previously announced, the ATRs were scheduled for delivery to Avation in Q4 2024/ Q1 2025, and will now be sold on to an airline client, with the aircraft sales expected to be completed on the date of delivery. The aircraft had been ordered through the exercise of purchase r
Companies: Avation PLC
WHIreland
Target Healthcare REIT’s Q324 update shows a fifth successive quarter of positive NAV total return, with indexed rent reviews driving increased earnings and property values. Tenant profitability continues to strengthen, reflected in a high level of rent cover and rent collection. Dividends are well covered by adjusted earnings and we expect further DPS growth.
Companies: Target Healthcare REIT PLC
Triple Point Social Housing REIT’s (SOHO’s) Q124 update confirms a continuing improvement in rent collection. The newly set FY24 DPS target is unchanged compared to FY23 at 5.46p as the board considers the impact of asset sales and transfers. This represents a yield of 9.0%. Strong indexed rental income continues to support income and capital values.
Companies: Triple Point Social Housing REIT PLC
In this note we look at the gap between perception and reality in the UK equity market, the opportunities and threats in the economic and market outlook, and the emerging consensus that the valuation discount versus other major markets is at or close to an inflection point. We consider the benefits of UK equity strategies both for income investors and for those seeking exposure to the higher growth potential of smaller and mid-cap companies.
Companies: ATS MRCH SCP SHRS LWDB JUGI MINI
Capital Access Group
The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. For the second year running, apart from global economic influences affecting world markets, performance in 2023 was dented by the capital-intensive nature of the sector. The HHI fell 3.7%, to 483.8, underperforming the main London markets – FTSE 100 (+3.8%) and FTSE All-Share (3.8%) but outperforming the FTSE AIM All-Share Index (
Companies: TXG ETXPF NDVA TSVT BCOW Z29 TXG NCYT GNS SUN AMS OMG APH EKF EAH IMM AGL DEMG AGY TSTL IPO GDR TRX HVO CTEC OXB DEST VLG IXI VAL INDV AGR AVCT BAI 123F IMCR BCOW
Hardman & Co
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Companies: Harworth Group PLC
Liberum
The key message from ICGT’s FY’24 results (to January) is the continued strength of the operating companies, which keep delivering mid-teen EBITDA growth. Despite challenging markets, margins have widened, which should help allay some concerns over the impact of the higher-rate environment. Target returns are “broadly unchanged”. FY’24 saw about half the usual investment and realisation activity (and fewer realisations saw less NAV uplift on exit). A degree of volatility is to be expected, and t
Companies: ICG Enterprise Trust PLC GBP
UK commercial property has been a cornerstone asset for many income-seeking investors (both retail and institutional) in recent decades, particularly since the global financial crisis of 2007/8 and the resulting ultra-low interest rate environment. However, since rates began to rise in 2022 to tackle surging inflation, meaningful returns have once more become available on lower-risk assets such as cash and government bonds, which has led to a retrenchment from alternative income assets such as p
Companies: LABS SREI SUPR AEWU
Companies: Arbuthnot Banking Group PLC
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