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\u2022 The overall impact on the net result of fluctuations in the
\n
exchange rates of the main non-euro currencies was \u2013 on
\n
balance \u2013 limited to 27 million euros (mainly due to the
\n
appreciation of the average price of the Czech koruna and
\n
the Hungarian forint against the euro).
\n
\n\n
Effects of changes in foreign exchange rates
\n
\n
KBC\u2019s functional and presentation currency is the euro. Monetary assets and liabilities denominated in foreign currency are
\n
translated into the functional currency at the spot rate on the balance sheet date. Negative and positive valuation
\n
differences, except for those relating to the funding of equity instruments and investments of consolidated companies in a
\n
foreign currency, are recognised in the income statement. Non-monetary items measured at historical cost are translated
\n
into the functional currency at the historical exchange rate that existed on the transaction date. Non-monetary items carried
\n
at fair value are translated at the spot rate on the date the fair value was determined. Translation differences are reported
\n
together with changes in fair value. Income and expense items in foreign currency are taken to the income statement at the
\n
exchange rate prevailing when they were recognised.
\n
\n
Valuation differences are accounted for either in the income statement or in other comprehensive income. Valuation
\n
differences that are initially accounted for in other comprehensive income and that relate to gains or losses that are
\n
subsequently recognised in the income statement are recycled to the income statement in the same period in which that
\n
item is accounted for in the income statement. The balance sheets of foreign subsidiaries are translated into the presentation
\n
currency at the spot rate on the reporting date (except for equity, which is translated at the historical rate). The income
\n
statement is translated at the average rate for the financial year as a best estimate of the exchange rate on the transaction
\n
date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag2": { "value": "\n

\n\n
Market risk in non-trading activities
\n
Market risk relates to changes in the level or in the volatility of prices in financial markets. The process of managing
\n
our structural exposure to market risks in the non-trading activities covers interest rate risk, gap risk, basis risk, option
\n
risk (such as prepayment risk), currency risk, equity price risk, real estate price risk, credit spread risk and inflation risk.
\n
\u2018Structural exposure\u2019 encompasses all exposure inherent in our commercial activity or in our investments (banking and
\n
insurance). Trading activities are therefore not included. This process is also known as Asset/Liability Management
\n
(ALM).
\n
Managing market risk in non-trading activities
\n
In the area of market risk in the non-trading activities, the
\n
Executive Committee is supported by the Group Assets and
\n
Liability Committee (ALCO), which is to provide assistance in
\n
the area of (integrated) balance sheet management at
\n
group level. The governance, rules and procedures and how
\n
asset and liability risk management is performed throughout
\n
the group are outlined in the Non-Trading Market Risk
\n
Framework. Its implementation is monitored by Group Risk
\n
and its Market Non-Trading Risk Competence Centre. Within
\n
the risk function, the ALM & Liquidity Risk Council, chaired by
\n
the CRO Treasury & Markets, aims to establish, facilitate,
\n
promote and support the solid and efficient integration of all
\n
tasks assigned to the local and group risk departments.
\n
The Group and Local Treasury functions act as the first line of
\n
defence and measure and manage interest rate risk on a
\n
playing field defined by the risk appetite and the limits.
\n
The building blocks for managing market risk in
\n
non-trading activities
\n
\u2022 Risk identification: To identify market risks in the non-
\n
trading portfolios a number of tools are used, including the
\n
New and Active Products Process (NAPP), the Environmental
\n
Risk Impact Map, the risk scan, and early warning
\n
processes triggered by recurrent monitoring. Risk signals
\n
are an important tool as well. For this purpose, both the
\n
internal and external environment is scanned for events
\n
and developments that could have an impact on our
\n
non-trading books. Relevant risk signals are reported to
\n
management, if possible, including a proposal for remedial
\n
actions. New and upcoming regulation is followed up at
\n
group or local level to ensure that these are implemented
\n
in KBC\u2019s policies and instructions.
\n
\u2022 Risk measurements: a common rulebook, which
\n
supplements the framework for technical aspects, and a
\n
shared group measurement tool ensure that these risks are
\n
measured consistently throughout the group through,
\n
among others:
\n
- Basis-Point-Value (BPV) for interest rate risk;
\n
- gap analysis for interest rate risk, related to repricing
\n
mismatches between assets and liabilities and inflation
\n
risk;
\n
- economic sensitivities for currency risk, equity price risk
\n
and real estate price risk.
\n
Measures are complemented by stress tests, covering
\n
back testing of pre-payments, net interest income results
\n
under various scenarios, or the impact on regulatory
\n
capital stemming from interest, spread or equity risk
\n
residing within the banking books.
\n
\u2022 Setting and cascading risk appetite: limits cover all
\n
material market risks faced by the ALM function: limits
\n
covering interest rate risk, equity risk, real estate risk and
\n
foreign exchange risk for the consolidated entities are
\n
approved by the Board of Directors and limits for each
\n
local entity are approved by the Executive Committee.
\n
\u2022 Risk analysis, reporting and follow-up: besides regulatory
\n
reporting, structural reporting to the ALCO is performed.
\n
The reporting process includes a sign-off process to
\n
ensure data accuracy.
\n
ESG in market risk (non-trading) management
\n
Within the ALM scope, ESG risk, specifically climate and other
\n
environmental risks, is considered for the portfolios of
\n
sovereign and corporate bonds, equity investment, and
\n
direct real estate. For all products, environmental transition
\n
risk is assessed on the basis of either sector (corporate bonds
\n
and direct equity), country (sovereign bonds), or physical risk
\n
(direct real estate).
\n
The bond and equity portfolios are monitored via climate risk
\n
KRIs to ensure positions do not become more susceptible to
\n
transition risk. For corporate bonds and equity positions, the
\n
majority of the exposure is, and is expected to remain, in
\n
sectors with low transition risk. The same approach is taken
\n
with sovereign bonds. Direct real estate represents a small
\n
and more stable exposure, and is followed up on when
\n
positions change. All treasury investment decisions are taken
\n
in line with the single binding framework, which defines the
\n
screening criteria for responsible investments.
\n
For sovereign bonds, classification takes place based on an
\n
internal sustainability barometer of countries, which are
\n
classified as having low, medium, or high risk in respect of
\n
environmental commitments. Corporate bonds and direct
\n
equity positions are classified by sector as having low,
\n
medium, or high climate transition risk. The sustainability
\n
analysis for corporate bonds and equity positions follow a
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
scenario inspired by the \u2018disorderly transition scenario\u2019,
\n
developed by the \u2018Network for Greening the Financial
\n
System\u2019 (NGFS), which was used in the ECB climate stress test
\n
exercise carried out in 2022. For corporate bonds, sensitivity
\n
is measured by a credit spread shock based on the
\n
aforementioned 2022 ECB climate stress test spread shocks.
\n
Equity value is shocked per sector based on ECB climate
\n
equity shocks. Direct real estate is measured on a position-
\n
by-position basis with an emphasis on physical risk. Insights
\n
are gathered and reported in alignment with other risk types
\n
in the Climate Risk Impact Map (see \u2018ESG in our risk
\n
management\u2019).
\n
More information can be found in the Risk Report, at
\n
www.kbc.com.
\n
Impact of external developments on market
\n
risk in the non-trading activities
\n
After the significant rate hikes in 2022, 2023 was
\n
characterised by a normalisation of interest rate
\n
s after years of low rates. Banks in general experienced a
\n
sizeable shift from current and savings accounts to fixed-
\n
rate instruments. The issue of the one-year State Note in
\n
Belgium illustrated the overall trend of shifting from non-
\n
maturity deposits towards term deposits or fixed-rate
\n
instruments. However, KBC always applies a prudent
\n
investment approach for such deposits and holds significant
\n
buffers in short-term investments to be able to absorb
\n
material outflows. As such, given these prudent buffers, the
\n
large success of the Belgian State Note did not trigger any
\n
specific action for the existing investments.
\n
Market risk in the non-trading activities consists of different
\n
risk sub-types. These are outlined below, including more
\n
details and figures.
\n
Interest rate risk and gap risk
\n
We manage the ALM interest rate positions of the banking
\n
entities via a system of market-oriented internal pricing for
\n
products with a fixed maturity date, and via a replicating
\n
portfolio technique for products without a fixed maturity
\n
date (e.g., current and savings accounts). The bank also
\n
adjusts its interest rate profile through interest rate
\n
derivatives to stay within the limits set by the risk appetite.
\n
The main technique used to measure interest rate risks is the
\n
10 Basis Point Value (BPV) method, which measures the
\n
extent to which the value of the portfolio would change if
\n
interest rates were to go up by ten basis points across the
\n
entire swap curve (negative figures indicate a decrease in
\n
the value of the portfolio).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a parallel 10-basis-point increase in the swap 1 curve
for the KBC group, impact on value 2 (in millions of EUR)20232022
Banking-45-36
Insurance114
Total-33-32
\n\n\n\n
\n
1 In accordance with market standards, sensitivity figures are based on a risk-free curve (swap curve).
\n
2 Full market value, regardless of accounting classification or impairment rules.
\n
For the scope of the banking activities, two other
\n
methodologies to measure interest rate sensitivity, which is
\n
comparable across institutions, are the outlier stress test
\n
(SOT) on Economic Value of Equity (EVE) and the SOT on Net
\n
Interest Income (NII), both calculated according to the
\n
guidelines of the European Banking Authority.
\n
For the SOT on EVE, six different scenarios are applied to the
\n
banking books (material currencies) every quarter. These
\n
scenarios comprise material parallel shifts up and down,
\n
steepening or flattening of the swap curves or shifts in the
\n
short-term rates only. The worst-case scenario impact (the
\n
most negative impact on the economic value of equity) is set
\n
off against tier-1 capital. For the banking book at KBC group
\n
level, the SOT EVE came to -3.91% of tier-1 capital at year-end
\n
2023. This is well below the -15% threshold, which is monitored
\n
by the European Central Bank and indicates that the overall
\n
interest rate sensitivity of KBC\u2019s balance sheet is limited.
\n
As from 2023, the SOT EVE is complemented by the SOT NII,
\n
which measures the impact of two scenarios (parallel up and
\n
down) on NII. The impact of the worst-case scenario on NII is
\n
also set off against tier-1 capital. According to this measure,
\n
the interest rate sensitivity of KBC, too, is limited: it came to
\n
-1.27% at year-end 2023, compared to the 5% outlier
\n
threshold used by the supervisory authority.
\n
We also use other techniques to measure potential
\n
imbalances in terms of our interest rate position, such as gap
\n
analysis, the duration approach, scenario analysis and stress
\n
testing. Information regarding the Gap table, detailing
\n
mismatches between assets and liabilities by time bucket, is
\n
provided in the 2023 Risk Report.
\n
Where the group\u2019s insurance activities are concerned, the
\n
fixed-income investments for the non-life reserves are
\n
invested with the aim of matching the projected pay-out
\n
patterns for claims, based on extensive actuarial analysis.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
The non-unit-linked life activities (class 21) combine a
\n
guaranteed interest rate with a discretionary participation
\n
feature (DPF) fixed by the insurer. The main risks to which the
\n
insurer is exposed as a result of such activities are a low-
\n
interest-rate risk (the risk that return on investments will drop
\n
below the guaranteed level) and the risk that the investment
\n
return will not be sufficient to give clients a competitive
\n
profit-sharing rate. The risk of low interest rates is managed
\n
by largely matching asset and liability cashflows of the life
\n
insurance portfolios covered by fixed-income investments.
\n
Unit-linked life insurance investments (class 23) are not dealt
\n
with here, since this activity does not entail any market risk
\n
for KBC.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Expected cashflows (not discounted), life
insurance activities
(in millions of EUR)0\u20131 year1\u20132 years2-3 years3-4 years4-5 years>5 yearsTotal
31-12-2023
Fixed-income assets backing liabilities, guaran -1 7877419327871 0448 22513 516
teed component
Equity------937
Property------108
Other (no maturity)------299
Liabilities, guaranteed component1 5951 2018078828349 47414 793
Difference in time-sensitive expected cashflows192-460125-95210-1 250-1 278
Mean duration of assets6.72 years
Mean duration of liabilities7.92 years
31-12-2022
Fixed-income assets backing liabilities, guaran -1 2331 4898551 0488448 73814 208
teed component
Equity------929
Property------112
Other (no maturity)------95
Liabilities, guaranteed component1 3671 2018078828349 47414 566
Difference in time-sensitive expected cashflows-1342884816611-737-358
Mean duration of assets6.66 years
Mean duration of liabilities8.76 years
\n\n\n\n
\n
As mentioned above, the main interest rate risk for the insurer
\n
is the risk of low rates for a longer period. Liabilities in the Life
\n
or Workmen\u2019s Compensation businesses tend to have
\n
maturities beyond the classic investment horizon and there is
\n
a risk that reinvestments may need to be done at lower rates.
\n
We adopt a liability-driven ALM approach focused on
\n
mitigating the interest rate risk in accordance with KBC\u2019s risk
\n
appetite. For the remaining interest rate risk, we adhere to a
\n
policy that takes into account the possible negative
\n
consequences of a sustained decline in interest rates, and
\n
have built up adequate supplementary reserves.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Breakdown of the reserves for non-unit-linked life insurance by guaranteed interest
rate, insurance activities31-12-202331-12-2022
5.00% and higher3%3%
More than 4.25% up to and including 4.99%6%7%
More than 3.50% up to and including 4.25%4%4%
More than 3.00% up to and including 3.50%9%9%
More than 2.50% up to and including 3.00%3%3%
2.50% and lower73%72%
0.00%2%2%
Total 100%100%
\n\n\n\n
\n
Credit spread risk
\n
We purchase bonds with a view to acquiring interest income.
\n
Their selection is largely conservative and based on criteria
\n
such as credit risk rating, risk/return measures and liquidity
\n
characteristics.
\n
We manage the credit spread risk for, inter alia, the sovereign
\n
bond portfolio by monitoring the extent to which the value of
\n
the sovereign bonds would change if credit spreads were to
\n
go up by 100 basis points across the entire curve. In addition
\n
to the sovereign portfolio, KBC holds a non-sovereign bond
\n
portfolio (banks, corporations, supranational bodies). More
\n
details regarding the bond portfolio components can be
\n
found in the Risk Report.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Exposure to bonds at year-end 2023, KBC Group, carrying value (in millions of EUR)
At fair value For compari-
through other son purposes: Economic
comprehen-total impact of
At amortised sive income Held at year-end +100 basis
cost(FVOCI)for tradingTotal20223points 1
Sovereign 43 33713 2062 96659 50953 642-2 803
Of which2 :
Czech Republic12 0791 2782 25415 61113 556-721
Belgium7 0524 12618911 36710 664-659
France3 7101 703385 4515 408-223
Slovakia3 524617664 2073 618-219
Hungary2 4054721893 0662 624-114
Non-sovereign8 0353 70117211 90811 524-359
\n\n\n\n
\n
\n
1 Theoretical economic impact in fair value terms of a parallel 100-basis-point upward shift in the spread over the entire maturity structure. Only a portion of this impact is
\n
reflected in profit or loss and/or equity. Sensitivity figures relate to non-trading positions in sovereign bonds for the banking and insurance businesses (impact on trading book
\n
exposure was quite limited and amounted to 35 million euros at year-end 2023).
\n
2 Top 5 largest sovereign portfolios.
\n
3 2022 figures have been restated following the transition to IFRS17.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
Equity risk
\n
The main exposure to equity is within our insurance business,
\n
where the ALM strategies are based on a risk-return
\n
evaluation, taking into account the market risk attached to
\n
open equity positions. The vast majority of the equity
\n
portfolio is held as an economic hedge for long-term
\n
liabilities of the insurance company. Smaller equity portfolios
\n
are also held by other group entities, where the portfolios are
\n
of a strategic nature, such as participations in relation to the
\n
execution of KBC\u2019s business model. The sectorial repartition
\n
of the portfolio is included in the Risk Report.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Equity portfolio of the KBC groupBanking activitiesInsurance activitiesGroup
31-12-202331-12-202231-12-202331-12-202231-12-202331-12-2022
In billions of EUR*0.230.221.391.331.631.55
of which unlisted0.220.210.180.140.40.35
\n\n\n\n
\n
* The main reason for the difference with \u2018Equity instruments\u2018 in Note 4.1 of the \u2018Consolidated financial statements\u2019 section is that shares in the trading book are excluded above,
\n
but included in the table in Note 4.1.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 25% drop in equity prices, impact on value
(in millions of EUR)20232022
Banking activities-59-55
Insurance activities-348-333
Total-407-387
\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Net realised gains Net unrealised gains
(in income statement)on year-end exposure
Non-trading equity exposure*(in equity)
(in millions of EUR)31-12-202331-12-202231-12-202331-12-2022
Banking activities--1912
Insurance activities2-121280
Total2-123191
\n\n\n
\n
* 2022 figures for insurance activities and total have been restated following the transition to IFRS 17.
\n
Real estate risk
\n
The group\u2019s real estate businesses hold a limited real estate
\n
investment portfolio. KBC Insurance also holds a diversified
\n
real estate portfolio, as an investment for non-life reserves
\n
and long-term life activities. The real estate exposure is
\n
viewed as a long-term hedge against inflation risks and as a
\n
way of optimising the risk/return profile of these portfolios.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 25% drop in real estate prices, impact on value (in millions of EUR)20232022
Bank portfolios-94-94
Insurance portfolios-107-78
Total-201-172
\n\n\n
\n
Inflation risk
\n
Inflation can impact a financial company indirectly in many
\n
ways, for instance via changes in interest rates or operational
\n
costs. Inflation in general therefore is not easily quantifiable
\n
as a market risk concept. However, certain financial products
\n
or instruments have a direct link with inflation and their value
\n
is directly impacted by a change in market expectations.
\n
KBC Bank uses inflation-linked bonds as an opportunity to
\n
diversify its asset portfolio. At KBC Insurance, inflation risk
\n
relates specifically to workmen\u2019s compensation insurance,
\n
where particularly in the case of permanent or long-term
\n
disabilities an annuity benefit is paid to the insured person
\n
(with the annuity being linked to inflation by law). KBC
\n
Insurance partly mitigates the risks by investing in inflation-
\n
linked bonds and complements its inflation hedging
\n
programme by investing in real estate and shares, as these
\n
assets are traditionally correlated with inflation and do not
\n
have a maturity date.
\n
The banking business holds a portfolio of inflation-linked
\n
bonds with a sensitivity to inflation (BPI) of 7.5 million euros (a
\n
0.10% move in inflation expectations) at the end of 2023. For
\n
the insurance activities the BPI of liabilities was calculated at
\n
4.8 million euros, against which inflation-linked bonds are
\n
held with a 4.4-million-euro BPI, supplemented with a
\n
26-million-euro real estate portfolio. The sensitivity of
\n
liabilities to inflation is only known with a quarter\u2019s delay.
\n
Therefore, the insurance figures in this section are based on
\n
the third quarter of 2023.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
Foreign exchange risk
\n
We pursue a prudent policy as regards our structural
\n
currency exposure. Material foreign exchange exposure in
\n
the ALM books of banking entities with a trading book is
\n
transferred via internal deals to the trading book, where it is
\n
managed within the allocated trading limits. The foreign
\n
exchange exposure of banking entities without a trading
\n
book and of insurance and other entities has to be hedged, if
\n
material. However, non-euro-denominated equity holdings
\n
in the investment portfolio are not hedged, as foreign
\n
exchange volatility is considered part of the investment
\n
return.
\n
KBC focuses on stabilising the common equity ratio against
\n
foreign exchange fluctuations.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 10% decrease in currency value* BankingInsurance
(in millions of EUR)31-12-202331-12-202231-12-202331-12-2022
CZK-209-231-31-31
HUF-85-100-9-7
BGN-93-96-22-17
USD6-1-52-47
\n\n\n
\n
* Exposure for currencies where the impact exceeds 10 million euros in Banking or Insurance.
\n
Hedge accounting
\n
Assets and liabilities management uses derivatives to
\n
mitigate interest rate and foreign exchange risks. The aim of
\n
hedge accounting is to reduce the volatility in P&L resulting
\n
from the use of these derivatives.
\n
KBC decided not to apply hedge accounting to credit and
\n
equity risks. When the necessary criteria are met, it is applied
\n
to remove the accounting mismatch between the hedging
\n
instrument and the hedged item. For more information about
\n
hedge accounting, please see \u2018Notes on the accounting
\n
policies\u2019 in the \u2018Consolidated financial statements\u2019 section.
\n
Risk categories applying to hedge accounting
\n
Interest rates
\n
Hedging derivatives are used to mitigate an interest rate risk
\n
that arises from a difference in the interest rate profile of
\n
assets and their funding liabilities. The hedge accounting
\n
status of a hedge can be associated with either the asset or
\n
the liability item.
\n
Interest rate derivatives can be designated as:
\n
\u2022 Hedges of the fair value of recognised assets or liabilities.
\n
Changes in the fair value of derivatives that are
\n
designated and qualify as fair value hedges are recorded
\n
in profit or loss, together with any changes in the fair value
\n
of the hedged asset or liability that are attributable to the
\n
hedged risk. The gain or loss relating to the ineffective
\n
portion is also recognised in profit or loss.
\n
\u2022 Hedges of the cashflow of recognised assets and liabilities
\n
which are either certain or highly probable forecasted
\n
transactions. The effective portion of changes in the fair
\n
value of derivatives that are designated and qualify as
\n
cashflow hedges is recognised in the cashflow hedge
\n
reserve within equity. The gain or loss relating to the
\n
ineffective portion is recognised directly in profit or loss.
\n
KBC uses macro hedge accounting strategies for
\n
homogeneous portfolios of smaller items, where the
\n
frequency of occurrence or the relatively small size of the
\n
average operation renders the one-to-one relationship
\n
sub-optimal. This is the case for inter alia mortgages, loans
\n
to SMEs or customer deposits. Macro hedge strategies may
\n
be dynamic and undergo frequent changes based on
\n
balancing the portfolio (\u2018open portfolio hedge\u2019), among other
\n
things.
\n
The micro hedge designation is used when large individual
\n
assets or liabilities are hedged. Typical assets are large
\n
corporate loans and bond acquisitions for which the credit
\n
spread profile is relevant. Liabilities can include KBC\u2019s own
\n
issues or specific long-term facilities offered by a central
\n
bank. Micro hedges are either fair-value or cashflow based.
\n
Foreign exchange
\n
KBC has strategic investments denominated in non-euro
\n
currencies. The net asset value of significant participations is
\n
partly funded in the local currency by deposits and foreign
\n
exchange derivatives, to ensure stability of the common
\n
equity ratio. By using hedges of net investments in foreign
\n
operations, the foreign exchange component is reported in
\n
equity until realisation (unwinding of funding due to
\n
liquidation, dividend payments or other decreases in net
\n
asset value).
\n
KBC also has a limited portfolio of foreign-currency-
\n
denominated bonds that are funded through euro proceeds.
\n
These bonds are hedged by cross-currency interest rate
\n
swaps to create a synthetic EUR fixed-rate interest income.
\n
Cashflow hedge accounting (micro-hedge) is performed to
\n
mitigate foreign exchange volatility.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
Hedge effectiveness
\n
Hedge effectiveness is determined at the inception of the
\n
hedge relationship, as well as through periodic prospective
\n
and retrospective effectiveness assessments, to ensure that
\n
a relevant relationship between the hedged item and the
\n
hedging instrument exists and remains valid.
\n
Effectiveness testing
\n
For interest rates, several prospective and retrospective tests
\n
are performed to ensure the relationship between the
\n
hedged item and the hedging instrument qualifies for the
\n
hedge accounting strategy.
\n
Prospective tests are mostly based either on a sensitivity
\n
analysis (verifying if the basis point value of the hedged
\n
portfolio relative to the hedging instrument stays within the
\n
80-125% interval) or volume tests (if the principal amount of
\n
hedge-eligible items exceeds the notional volume of
\n
hedging instruments expected to be repriced or repaid in
\n
each specified time bucket).
\n
For macro cashflow hedges, extensive forward-looking
\n
analyses assess the sufficient likelihood that the future
\n
volume of hedged items will largely cover the volume of
\n
hedging instruments. A hedge ratio \u2013 measuring the
\n
proportion of a portfolio that is hedged by derivatives \u2013 is
\n
calculated for each hedging strategy.
\n
The retrospective effectiveness test of the hedge
\n
relationship is periodically carried out by comparing the
\n
change in fair value of the portfolio of hedging instruments
\n
relative to the change in fair value of the hedged eligible
\n
items imputable to the hedged risk over a given period (the
\n
ratio of fair value changes remains within the 80-125%
\n
interval).
\n
For foreign exchange hedging, effectiveness is ensured by
\n
adjusting the sum of the nominal amount of the funding
\n
deals and foreign exchange derivatives to the targeted
\n
hedge amount of the strategic participations. For foreign-
\n
currency-denominated bonds swapped into euro, the start
\n
date, maturity date and coupon dates are also matched.
\n
Sources of hedge ineffectiveness
\n
Ineffectiveness for interest rate swaps may occur due to:
\n
\u2022 differences in relevant terms between the hedged item
\n
and the hedging instrument (it can include discrepancies
\n
in interest curves and in periodicity);
\n
\u2022 a reduction in volume of the hedged item that would fall
\n
under the volume of hedging instruments for any time
\n
bucket;
\n
\u2022 the credit value adjustment on the interest rate swap not
\n
being matched by the loan. However, hedging swaps are
\n
fully collateralised or traded through clearing houses and
\n
the credit value adjustment is limited.
\n
Regarding the hedge of the net investment in foreign
\n
currency, the interest rate component from the hedging
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n
instruments can be a source of inefficiency. The counterparty
\n
risk on the hedging instrument, even if collateralised, can
\n
also be a source of inefficiency.
\n
Discontinuation of hedge accounting
\n
Hedge accounting strategies failing the effectiveness tests
\n
are discontinued. A de-designated hedging instrument can
\n
be re-designated in a new hedge relationship. Effective
\n
hedge accounting strategies may also be discontinued for
\n
technical or strategic reasons. Any impact on profit and loss
\n
arising from hedge ineffectiveness and discontinuation is
\n
reported to the Group ALCO.
\n
Capital sensitivity to market movements
\n
Available capital can be impacted by changes in the value
\n
of balance sheet items (e.g., sovereign and corporate bonds
\n
and equity) booked at fair value through other
\n
comprehensive income or fair value through profit or loss.
\n
This impact can be negative when the market is stressed,
\n
which can be triggered by a number of market parameters,
\n
including swap rates or bond spreads that increase or by
\n
equity prices that fall. At KBC, we use this capital sensitivity
\n
as a common denominator to measure the vulnerability of
\n
the banking book to different market risk shocks.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CET1 sensitivity to main market drivers (under Danish compromise), KBC group (as % points of 31-12-202331-12-2022
CET1 ratio), IFRS impact caused by:
+100-basis-point parallel shift in interest rates-0.1%-0.1%
+100-basis-point parallel shift in spread-0.2%-0.1%
-25% in equity prices-0.1%-0.1%
\n\n\n
\n
The table shows that the sensitivity of capital to market
\n
movements is limited. This is because the majority of KBC\u2019s
\n
bond portfolio is deemed to be held to maturity and is
\n
therefore booked at amortised cost. Those positions do not
\n
impact capital unless they are liquidated before maturity.
\n
Note that KBC holds material amounts of liquid assets (see
\n
the liquidity section) to absorb unexpected funding outflows.
\n
If these are not sufficient, KBC can still enter into repo
\n
agreements to access liquidity rather than having to realise
\n
losses on the bonds.
\n

\n\n\n\n\n\n

\n\n\n\n\n\n

\n\n

\n

\n

\n
Market risk in trading activities
\n
Market risk relates to changes in the level or in the volatility of prices in financial markets. Market risk in trading activities
\n
is the potential negative deviation from the expected value of a financial instrument (or portfolio of such instruments)
\n
in the trading book due to changing interest rates, exchange rates, equity or commodity prices, etc.
\n
KBC\u2019s strategic objectives in undertaking trading activities
\n
are to offer sound and appropriate financial products and
\n
solutions to its clients in order to help them manage their risks
\n
and access capital, and to engage in certified market-
\n
making activities. Hedging the market risk arising from
\n
providing clients with such bespoke solutions with standard
\n
market products leaves us with some residual market risks
\n
due to the mismatch between the more market-standard
\n
sizes and expiry dates and the solutions provided to our
\n
clients.
\n
The focus of our trading activities is on interest-rate
\n
instruments, while activity on the foreign exchange markets
\n
and in relation to equity has traditionally been limited. These
\n
activities are carried out by our dealing rooms in our home
\n
countries as well as via a minor presence in the UK and Asia.
\n
Wherever possible and practical, the residual trading
\n
positions of our foreign entities are systematically transferred
\n
to KBC Bank NV, reflecting that the group\u2019s trading activity is
\n
managed centrally both from a business and a risk
\n
management perspective. Consequently, KBC Bank NV holds
\n
about 98% of the trading-book-related regulatory capital of
\n
KBC Group NV.
\n
KBC\u2019s low risk appetite for the market risk in trading activities
\n
is illustrated by the fact that market risk RWA for trading
\n
activities is around 2 to 3% of KBC\u2019s total RWA. The sections
\n
below give a general overview regarding market risk in
\n
trading activities. For more details, please refer to KBC\u2019s Risk
\n
Report, which is available at www.kbc.com.
\n
Managing market risk
\n
In the area of market risk in the trading activities, the
\n
Executive Committee is supported by the Group Markets
\n
Committee (GMC), which advises on risk monitoring and
\n
capital usage with respect to trading activities. The
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
governance, rules and procedures on how trading risk
\n
management should be performed throughout the group are
\n
outlined in the Trading Market Risk Management Framework.
\n
Its implementation is monitored by Group Risk and its Market
\n
Risk Trading Competence Centre.
\n
The building blocks for managing market risk
\n
\u2022 Risk identification: the risk function analyses the results of
\n
value and risk calculations, market developments, ESG risk
\n
assessments, industry trends, new modelling insights,
\n
changes in regulations, etc. Furthermore, before a new or
\n
changed dealing room product or activity can be
\n
introduced, the risk function screens whether the risk
\n
aspects (including ESG risks) are correctly and sufficiently
\n
covered and provides risk advice that includes powers of
\n
veto and is part of the NAPP.
\n
\u2022 Risk measurement: ownership of the definitions used for
\n
the group-wide measurement of trading market risk lies
\n
with the risk function. We measure risk via a number of
\n
parameters including nominal positions, concentrations,
\n
Basis Point Value (BPV) and other sensitivities (the so-
\n
called \u2018greeks\u2019) and scenario analysis. However, the
\n
primary tool we use for measuring and monitoring market
\n
risk exposures in the trading book is the Historical Value-
\n
at-Risk (HVaR) method, which gives an estimate of the
\n
amount of economic value that might be lost on a given
\n
portfolio due to market risk over a defined holding period,
\n
with a given confidence level.
\n
\u2022 Setting and cascading risk appetite: the risk appetite for
\n
market risk in trading activities is set in line with the overall
\n
requirements as defined in our overarching risk
\n
management framework and is overseen by the GMC via a
\n
risk limit framework consisting of a hierarchy of limits and
\n
early warning indicators. These are defined down to
\n
trading desk level and, in addition to HVaR, include a series
\n
of concentration limits, basis-point-value limits and (stress)
\n
scenario limits.
\n
\u2022 Risk analysis, reporting and follow-up: in addition to the
\n
more proactive elements described under \u2018Risk
\n
identification\u2019, this involves compiling the necessary
\n
external and internal reports, issuing advice on business
\n
proposals, and monitoring and advising on the risks
\n
attached to the positions. We monitor and follow up the
\n
risks attached to the positions on a daily basis by means of
\n
the risk limit framework. The GMC, which meets every
\n
month, receives an extensive Core Report as well as
\n
periodic and ad hoc memos and reports. The GMC also
\n
receives a dashboard halfway between the monthly
\n
meetings whose frequency is increased (up to daily, if
\n
needed) depending on market circumstances. The
\n
Executive Committee ratifies the minutes of the GMC
\n
meetings and also receives market-risk-related
\n
information and risk signals in its Integrated Risk Report
\n
eight times per year).
\n
\u2022 Stress testing: in addition to the risk limit framework, we
\n
conduct extensive stress tests on our positions on a weekly
\n
basis. Whereas the HVaR model captures potential losses
\n
under normal market conditions, stress tests show the
\n
impact of exceptional circumstances and events with a
\n
low degree of probability. The historical and hypothetical
\n
stress-test scenarios incorporate both market risk and the
\n
liquidity aspects of disruptions in the market. The stress
\n
tests are discussed at GMC meetings to enable the
\n
members to gain an insight into potential weaknesses in
\n
the positions held by the group.
\n
ESG in market risk (trading) management
\n
Climate and other environmental risks, an important subject
\n
in these times, are indeed considered and analysed in the
\n
context of business planning and have been integrated in
\n
market risk management. While ESG risk assessments (e.g.,
\n
the Climate Risk Impact Map and pilot studies on other
\n
environmental risks) have confirmed that ESG aspects can be
\n
considered to be negligible in a market risk context, the
\n
Group Markets Committee (GMC) is kept closely informed of
\n
the immateriality via a quarterly update (including ESG
\n
dashboards and climate risk stress test results for the trading
\n
book) and a full review is submitted on an annual basis.
\n
More information can be found in the Risk Report, available
\n
at www.kbc.com.
\n
Market risk profile
\n
Our Approved Internal Model is used to calculate the vast
\n
majority of market risk regulatory capital. Regulatory capital
\n
for business lines not included in the Approved Internal Model
\n
is measured according to the Standardised Approach.
\n
The tables below show the Management HVaR (using our
\n
Approved Internal Model and a 99% confidence interval,
\n
one-day holding period) for the residual trading positions at
\n
all the dealing rooms of KBC that can be modelled by HVaR
\n
and the breakdown per risk type.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Market risk (Management HVaR) (in millions of EUR)20232022
Average for 1Q78
Average for 2Q69
Average for 3Q610
Average for 4Q79
As at 31 December87
Maximum in year1012
Minimum in year46
\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Average for Average for
Breakdown by risk factor of trading HVaR for the KBC group (Management HVaR; in millions of EUR)20232022
Interest rate risk6.38.6
FX risk0.91.3
FX options risk0.20.3
Equity risk2.10.8
Diversification effect-3.0-2.1
Total HVaR6.58.9
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Liquidity risk
\n
Liquidity risk is the risk that an organisation will be unable to meet its liabilities and obligations as they come due,
\n
without incurring higher-than-expected costs.
\n
Managing liquidity risk
\n
In the area of liquidity risk, the Executive Committee is
\n
supported by the Group Assets and Liability Committee
\n
(ALCO), which is to provide assistance in the area of
\n
(integrated) balance sheet management at group level,
\n
including liquidity and funding. The governance, rules and
\n
procedures and how asset and liability risk management is
\n
performed throughout the group are outlined in the Liquidity
\n
Risk Management Framework. Its implementation is
\n
monitored by Group Risk and its Liquidity Risk Competence
\n
Centre, acting as the second line of defence. Within the risk
\n
function, the ALM & Liquidity Risk Council, chaired by the
\n
CRO Treasury & Markets, aims to establish, facilitate,
\n
promote and support the solid and efficient integration of all
\n
tasks assigned to the local and group risk departments.
\n
The Group and Local Treasury functions act as the first line of
\n
defence and are responsible for KBC\u2019s overall liquidity and
\n
funding management. The Group Treasury function monitors
\n
and steers the liquidity profile on a daily basis and sets the
\n
policies and steering mechanisms for funding management
\n
(intra-group funding, funds transfer pricing). These policies
\n
ensure that local management has an incentive to work
\n
towards a sound funding profile. The Group Treasury function
\n
also actively monitors its collateral on a group-wide basis.
\n
The building blocks for managing liquidity risk
\n
\u2022 Risk identification: the NAPP process, the Climate Risk
\n
Impact Map, the risk scan, stress testing and materiality
\n
assessments are important tools used for risk
\n
identification. An annual assessment of key risk drivers
\n
impacting liquidity is performed as well. When relevant, risk
\n
signals are presented in Treasury Risk Reports and
\n
Integrated Risk Reports.
\n
\u2022 Risk measurement: identified liquidity risks are measured
\n
by means of both regulatory metrics such as the Liquidity
\n
Coverage Ratio (159% in 2023) and the Net Stable Funding
\n
Ratio (136%), and internal metrics on, for example, the
\n
funding mix and concentration and the composition of the
\n
liquid asset buffer. In the maturity analysis table below,
\n
KBC\u2019s structural liquidity risk is illustrated by grouping the
\n
assets and liabilities according to the remaining term to
\n
maturity (using the contractual maturity date). The
\n
difference between the cash inflows and outflows is
\n
referred to as the \u2018net funding gap\u2019.
\n
\u2022 Setting and cascading risk appetite: the ALCO monitors
\n
the development of the liquidity risk profile in relation to
\n
the limits.
\n
\u2022 Risk analysis, reporting and follow-up: to mitigate
\n
day-to-day liquidity risk, group-wide trends in funding
\n
liquidity and funding needs are monitored continuously by
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
the Group Treasury function. A Liquidity Contingency Plan
\n
drafted by the Group Treasury function is in place to
\n
address possible liquidity crisis situations and is tested at
\n
least annually.
\n
\u2022 Stress testing: liquidity stress tests assess KBC\u2019s liquidity
\n
contingency risk by measuring how the liquidity buffer of
\n
the group\u2019s bank and insurance entities changes under
\n
extreme stressed scenarios. This buffer is based on
\n
assumptions regarding liquidity outflows and liquidity
\n
inflows resulting from actions to increase liquidity. The
\n
liquidity buffer has to be sufficient to cover liquidity needs
\n
over (i) a period that is required to restore market
\n
confidence in the group following a KBC-specific event,
\n
(ii) a period that is required for markets to stabilise after a
\n
general market event and (iii) a combined scenario, which
\n
takes a KBC-specific event and a general market event
\n
into account. This information is fed into the Liquidity
\n
Contingency Plan.
\n
Moreover, KBC has an Internal Liquidity Adequacy
\n
Assessment Process (ILAAP) in place to ensure it has robust
\n
strategies, policies, processes and systems for identifying,
\n
measuring, managing and monitoring liquidity risk and
\n
funding positions over all appropriate time horizons, in order
\n
to maintain adequate levels of liquidity buffers.
\n
ESG in liquidity risk management
\n
Climate and other environmental risks are considered and
\n
analysed in the context of liquidity risk management. The
\n
Climate Risk Impact Map and pilots on other environmental
\n
risks (see \u2018ESG in our risk management\u2019), however, show that
\n
physical and transition risks will have a limited impact on
\n
liquidity risk management. Despite this immateriality, the
\n
ALCO is regularly informed about developments in ESG risk in
\n
the context of liquidity risk management.
\n
More information is available in the Risk Report, available at
\n
www.kbc.com.
\n
Impact of external developments on liquidity
\n
risk
\n
The significant increase in short-term interest rates following
\n
the monetary policy tightening implemented by the ECB as
\n
of 2022 impacted the composition of the deposit base at
\n
KBC Group. However, no significant deposit outflows were
\n
observed until the beginning of September. In September, a
\n
tax-beneficial Belgian State Note with a one-year maturity
\n
was issued. Although the issuance of the Belgian State Note
\n
can be considered as a stress event, KBC passed the test
\n
without any major liquidity impact (the issuance led to a
\n
deposit outflow of 5.7 billion euros at the level of KBC Bank
\n
NV and CBC Banque SA).
\n
Maturity analysis
\n
The table below shows the maturity analysis of the total
\n
inflows and outflows. Note that the structural liquidity gap
\n
shown in the table does not include the concept of a Liquid
\n
Asset Buffer (i.e. the fact that KBC can monetise its liquid
\n
bonds at all times via repo or pledging). Rather, in this table,
\n
cash-generating capacity from bonds is only visible at final
\n
maturity of the bond. As a result, the net funding gaps shown
\n
in the first buckets in the table are a clear overestimation of
\n
the risk as in practice KBC would monetise its Liquid Asset
\n
Buffer (97 billion euros at year-end 2023, of which 72 billion
\n
euros in unencumbered central bank eligible assets and the
\n
remainder in cash and withdrawable central bank
\n
receivables) to address these net outflows.
\n
At year-end 2023, KBC had 72 billion euros\u2019 worth of
\n
unencumbered central bank eligible assets, 58 billion euros
\n
of which in the form of liquid government bonds (80%). The
\n
remaining available liquid assets were mainly covered bonds
\n
(11%). Most of the liquid assets are expressed in our home
\n
market currencies. The funding from non-wholesale markets
\n
was accounted for by stable funding from core customer
\n
segments in our core markets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Liquidity risk (excluding intercompany deals)*<= 1 1\u201333\u201312 1\u20135 >5 On Not
(in billions of EUR)monthmonthsmonthsyearsyearsdemanddefinedTotal
31-12-2023
Total inflows41227100115747312
Total outflows49302026615229312
Professional funding1031004018
Customer funding2414141351480218
Debt certificates111351310043
Other4000002933
Liquidity gap (excl. undrawn commitments)-45-18774108-145180
Undrawn commitments-------48-48
Financial guarantees-------11-11
Net funding gap (incl. undrawn commitments)-45-18774108-145-41-59
31-12-2022
Total inflows61220821155334322
Total outflows38202924517829322
Professional funding6020504036
Customer funding19981231740226
Debt certificates8111710028
Other4000002933
Liquidity gap (excl. undrawn commitments)-32-8-958111-12550
Undrawn commitments\u2013\u2013\u2013\u2013\u2013\u2013-47-47
Financial guarantees\u2013\u2013\u2013\u2013\u2013\u2013-11-11
Net funding gap (incl. undrawn commitments)-32-8-958111-125-53-58
\n\n\n\n\n\n\n\n\n\n\n
\n
* Cashflows include interest rate flows consistent with internal and regulatory liquidity reporting. Inflows/outflows that arise from margin calls posted/received for MtM positions
\n
in derivatives are reported in the \u2018Not defined\u2019 bucket. \u2018Professional funding\u2019 includes all deposits from credit institutions and investment firms, as well as all repos. Instruments
\n
are classified on the basis of their first callable date. Some instruments are reported at fair value (on a discounted basis), whereas others are reported on an undiscounted basis
\n
(in order to reconcile them with Note 4.1 of the \u2018Consolidated financial statements\u2019 section). Due to the uncertain nature of the maturity profile of undrawn commitments and
\n
financial guarantees, these instruments are reported in the \u2018Not defined\u2019 bucket. The \u2018Other\u2019 category under \u2018Total outflows\u2019 contains own equity, short positions, provisions for
\n
risks and charges, tax liabilities and other liabilities.
\n
Funding information
\n
We have a strong retail/mid-cap deposit base in our core
\n
markets, resulting in a stable funding mix. A significant
\n
portion of the funding is attracted from core customer
\n
segments and markets.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Funding mixInformation31-12-202331-12-2022
Funding from customers1Demand deposits, term deposits, savings deposits, other deposits, 79%79%
savings certificates and debt issues placed in the network
Debt issues placed with institu-
tional investorsIncluding covered bonds, tier-2 issues, KBC Group NV senior debt9%6%
Net unsecured interbank fundingIncluding TLTRO4%7%
Net secured funding2Repo financing-7%-3%
Certificates of deposit\u20136%3%
Total equityIncluding AT1 issues9%7%
Total100%100%
in billions of EUR276287
\n\n\n\n\n\n\n\n\n\n\n
\n
1 Some 86% of this funding relates to private individuals and SMEs at year-end 2023.
\n
2 Negative on account of KBC carrying out more reverse repo transactions than repo transactions.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n
Note 6.7: Risk management and capital adequacy
\n
Capital management is a key management process relating to all decisions on the level and composition of our capital, both for
\n
banking and for insurance. It covers all instruments that are positioned to absorb losses in going concern and/or gone concern
\n
situations. Capital management aims to achieve the best possible balance between regulatory requirements, investor
\n
expectations, rating agencies\u2019 views and management ambitions. Ultimate accountability for capital management lies with the
\n
Board of Directors. Capital management entails a broad scope of activities covering strategic topics (such as defining policies,
\n
targets, etc.), frameworks and models (e.g., for regulatory capital, internal capital, cost of equity, measuring performance, etc.),
\n
planning and allocation (e.g., allocating capital to business, planning capital instrument issuances, forecasting capital ratios,
\n
etc.), implementation (e.g., dividends, capital transactions) and monitoring (including current solvency positions at various levels,
\n
compliance with group policies and regulatory requirements). ICAAP (Internal Capital Adequacy Assessment Process) consists of
\n
numerous business and risk processes that together contribute to the aim of being adequately capitalised at all times in view of
\n
our risk profile and the quality of our risk management and control environment. In addition to the integrated approach at group
\n
level, KBC Insurance and its insurance and reinsurance subsidiaries conduct an Own Risk and Solvency Assessment (ORSA) on a
\n
regular basis, in accordance with Solvency II requirements.
\n
We report the solvency based on IFRS data and according to the rules imposed by the regulator.
\n
\u2022 For the KBC group and KBC Bank, this implies that we calculate the solvency ratios based on CRR/CRD. KBC began applying
\n
the transitional provisions for IFRS 9 and certain tier-2 instruments on 30 June 2020. KBC has received authorisation from the
\n
regulator to apply a risk weighting to the participation in KBC Insurance (Danish compromise method) at KBC group level. The
\n
KBC group and KBC Bank are subject to minimum solvency ratios.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of the KBC group must be 10.92% (fully loaded) at
\n
year-end 2023. This includes the pillar 1 minimum requirement (4.5%), the pillar 2 requirement (1.05 set by the ECB following its
\n
supervisory review and evaluation process) and the buffer requirements (5.38% set by the local competent authorities in KBC\u2019s
\n
core markets). At year-end 2023, the fully loaded common equity ratio came to 15.2% (see the \u2018How do we manage our
\n
capital?\u2019 section for more information). At year-end 2023, the transitional common equity ratio came to 13.8%, which
\n
represented a capital buffer of 3.4% relative to the minimum requirement of 10.45%.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of KBC Bank must be 10.50% (transitional) at year-
\n
end 2023. At year-end 2023, the transitional common equity ratio was 13.4%.
\n
\u2022 The solvency of KBC Insurance is calculated on the basis of Solvency II (the minimum requirement is 100%). At year-end 2023,
\n
the Solvency II ratio came to 206% relative to the minimum requirement of 100%.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC groupKBC Bank
(consolidated)(consolidated)KBC Insurance
Key solvency figures for the KBC group, CRR/CRDCRR/CRD(consolidated)
KBC Bank and KBC Insurance (in millions of EUR)transitionaltransitionalSolvency II
31-12-202331-12-202231-12-202331-12-202231-12-202331-12-2022
Total regulatory capital, after profit appropriation19 76818 74217 95217 5164 1303 721
Tier-1 capital17 38916 97415 57315 7493 6293 220
Common equity15 63915 47413 82314 249\u2013\u2013
Parent shareholders\u2019 equity (after deconsolidating KBC 18 20916 98215 45015 6183 3022 157
Insurance for the KBC group)
Solvency adjustments-2 571-1 508-1 627-1 3703271 063
Additional going concern capital 11 7501 5001 7501 500\u2013\u2013
Tier-2 capital 22 3791 7672 3791 768501501
Total weighted risk volume (RWA) 3113 029109 966103 192100 285\u2013\u2013
Credit risks88 04284 98888 04284 988\u2013\u2013
Market risks2 1163 1322 1163 132\u2013\u2013
Operational risks13 03412 16613 03412 166\u2013\u2013
Insurance risks9 1339 133\u2013\u2013\u2013\u2013
Holding-company activities and elimination of intragro up704548\u2013\u2013\u2013\u2013
transctiaons
Solvency capital requirement (insurance)\u2013\u2013\u2013\u20132 0051 833
Common equity ratio (group, bank)13.8%14.1%13.4%14.2%\u2013\u2013
Solvency II ratio (insurance)\u2013\u2013\u2013\u2013206%203%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n
1 Includes perpetual subordinated loans with fully discretionary, non-cumulative interest payments. The securities also have a loss absorption mechanism (i.e. a temporary write-down trigger
\n
should the common equity tier-1 ratio fall below 5.125%). Also see Note 5.10.
\n
2 Includes subordinated loans with a fixed maturity date where principal and interest payments cannot be cancelled in a going concern.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
3 Supervision of the RWA internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of the
\n
statutory auditor.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\u2022 More detailed information is provided in the \u2018How do we manage our capital?\u2019 section of this report and in KBC\u2019s Risk Report.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). The information required in relation to risks is provided in those parts of the \u2018How do we manage our risks?\u2019 section which
\n
have been audited by the statutory auditor and which constitute part of the financial statements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag3": { "value": "\n
Market risk in non-trading activities
\n
Market risk relates to changes in the level or in the volatility of prices in financial markets. The process of managing
\n
our structural exposure to market risks in the non-trading activities covers interest rate risk, gap risk, basis risk, option
\n
risk (such as prepayment risk), currency risk, equity price risk, real estate price risk, credit spread risk and inflation risk.
\n
\u2018Structural exposure\u2019 encompasses all exposure inherent in our commercial activity or in our investments (banking and
\n
insurance). Trading activities are therefore not included. This process is also known as Asset/Liability Management
\n
(ALM).
\n
Managing market risk in non-trading activities
\n
In the area of market risk in the non-trading activities, the
\n
Executive Committee is supported by the Group Assets and
\n
Liability Committee (ALCO), which is to provide assistance in
\n
the area of (integrated) balance sheet management at
\n
group level. The governance, rules and procedures and how
\n
asset and liability risk management is performed throughout
\n
the group are outlined in the Non-Trading Market Risk
\n
Framework. Its implementation is monitored by Group Risk
\n
and its Market Non-Trading Risk Competence Centre. Within
\n
the risk function, the ALM & Liquidity Risk Council, chaired by
\n
the CRO Treasury & Markets, aims to establish, facilitate,
\n
promote and support the solid and efficient integration of all
\n
tasks assigned to the local and group risk departments.
\n
The Group and Local Treasury functions act as the first line of
\n
defence and measure and manage interest rate risk on a
\n
playing field defined by the risk appetite and the limits.
\n
The building blocks for managing market risk in
\n
non-trading activities
\n
\u2022 Risk identification: To identify market risks in the non-
\n
trading portfolios a number of tools are used, including the
\n
New and Active Products Process (NAPP), the Environmental
\n
Risk Impact Map, the risk scan, and early warning
\n
processes triggered by recurrent monitoring. Risk signals
\n
are an important tool as well. For this purpose, both the
\n
internal and external environment is scanned for events
\n
and developments that could have an impact on our
\n
non-trading books. Relevant risk signals are reported to
\n
management, if possible, including a proposal for remedial
\n
actions. New and upcoming regulation is followed up at
\n
group or local level to ensure that these are implemented
\n
in KBC\u2019s policies and instructions.
\n
\u2022 Risk measurements: a common rulebook, which
\n
supplements the framework for technical aspects, and a
\n
shared group measurement tool ensure that these risks are
\n
measured consistently throughout the group through,
\n
among others:
\n
- Basis-Point-Value (BPV) for interest rate risk;
\n
- gap analysis for interest rate risk, related to repricing
\n
mismatches between assets and liabilities and inflation
\n
risk;
\n
- economic sensitivities for currency risk, equity price risk
\n
and real estate price risk.
\n
Measures are complemented by stress tests, covering
\n
back testing of pre-payments, net interest income results
\n
under various scenarios, or the impact on regulatory
\n
capital stemming from interest, spread or equity risk
\n
residing within the banking books.
\n
\u2022 Setting and cascading risk appetite: limits cover all
\n
material market risks faced by the ALM function: limits
\n
covering interest rate risk, equity risk, real estate risk and
\n
foreign exchange risk for the consolidated entities are
\n
approved by the Board of Directors and limits for each
\n
local entity are approved by the Executive Committee.
\n
\u2022 Risk analysis, reporting and follow-up: besides regulatory
\n
reporting, structural reporting to the ALCO is performed.
\n
The reporting process includes a sign-off process to
\n
ensure data accuracy.
\n
ESG in market risk (non-trading) management
\n
Within the ALM scope, ESG risk, specifically climate and other
\n
environmental risks, is considered for the portfolios of
\n
sovereign and corporate bonds, equity investment, and
\n
direct real estate. For all products, environmental transition
\n
risk is assessed on the basis of either sector (corporate bonds
\n
and direct equity), country (sovereign bonds), or physical risk
\n
(direct real estate).
\n
The bond and equity portfolios are monitored via climate risk
\n
KRIs to ensure positions do not become more susceptible to
\n
transition risk. For corporate bonds and equity positions, the
\n
majority of the exposure is, and is expected to remain, in
\n
sectors with low transition risk. The same approach is taken
\n
with sovereign bonds. Direct real estate represents a small
\n
and more stable exposure, and is followed up on when
\n
positions change. All treasury investment decisions are taken
\n
in line with the single binding framework, which defines the
\n
screening criteria for responsible investments.
\n
For sovereign bonds, classification takes place based on an
\n
internal sustainability barometer of countries, which are
\n
classified as having low, medium, or high risk in respect of
\n
environmental commitments. Corporate bonds and direct
\n
equity positions are classified by sector as having low,
\n
medium, or high climate transition risk. The sustainability
\n
analysis for corporate bonds and equity positions follow a
\n

\n\n\n\n\n\n
scenario inspired by the \u2018disorderly transition scenario\u2019,
\n
developed by the \u2018Network for Greening the Financial
\n
System\u2019 (NGFS), which was used in the ECB climate stress test
\n
exercise carried out in 2022. For corporate bonds, sensitivity
\n
is measured by a credit spread shock based on the
\n
aforementioned 2022 ECB climate stress test spread shocks.
\n
Equity value is shocked per sector based on ECB climate
\n
equity shocks. Direct real estate is measured on a position-
\n
by-position basis with an emphasis on physical risk. Insights
\n
are gathered and reported in alignment with other risk types
\n
in the Climate Risk Impact Map (see \u2018ESG in our risk
\n
management\u2019).
\n
More information can be found in the Risk Report, at
\n
www.kbc.com.
\n
Impact of external developments on market
\n
risk in the non-trading activities
\n
After the significant rate hikes in 2022, 2023 was
\n
characterised by a normalisation of interest rate
\n
s after years of low rates. Banks in general experienced a
\n
sizeable shift from current and savings accounts to fixed-
\n
rate instruments. The issue of the one-year State Note in
\n
Belgium illustrated the overall trend of shifting from non-
\n
maturity deposits towards term deposits or fixed-rate
\n
instruments. However, KBC always applies a prudent
\n
investment approach for such deposits and holds significant
\n
buffers in short-term investments to be able to absorb
\n
material outflows. As such, given these prudent buffers, the
\n
large success of the Belgian State Note did not trigger any
\n
specific action for the existing investments.
\n
Market risk in the non-trading activities consists of different
\n
risk sub-types. These are outlined below, including more
\n
details and figures.
\n
Interest rate risk and gap risk
\n
We manage the ALM interest rate positions of the banking
\n
entities via a system of market-oriented internal pricing for
\n
products with a fixed maturity date, and via a replicating
\n
portfolio technique for products without a fixed maturity
\n
date (e.g., current and savings accounts). The bank also
\n
adjusts its interest rate profile through interest rate
\n
derivatives to stay within the limits set by the risk appetite.
\n
The main technique used to measure interest rate risks is the
\n
10 Basis Point Value (BPV) method, which measures the
\n
extent to which the value of the portfolio would change if
\n
interest rates were to go up by ten basis points across the
\n
entire swap curve (negative figures indicate a decrease in
\n
the value of the portfolio).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a parallel 10-basis-point increase in the swap 1 curve
for the KBC group, impact on value 2 (in millions of EUR)20232022
Banking-45-36
Insurance114
Total-33-32
\n\n\n\n
\n
1 In accordance with market standards, sensitivity figures are based on a risk-free curve (swap curve).
\n
2 Full market value, regardless of accounting classification or impairment rules.
\n
For the scope of the banking activities, two other
\n
methodologies to measure interest rate sensitivity, which is
\n
comparable across institutions, are the outlier stress test
\n
(SOT) on Economic Value of Equity (EVE) and the SOT on Net
\n
Interest Income (NII), both calculated according to the
\n
guidelines of the European Banking Authority.
\n
For the SOT on EVE, six different scenarios are applied to the
\n
banking books (material currencies) every quarter. These
\n
scenarios comprise material parallel shifts up and down,
\n
steepening or flattening of the swap curves or shifts in the
\n
short-term rates only. The worst-case scenario impact (the
\n
most negative impact on the economic value of equity) is set
\n
off against tier-1 capital. For the banking book at KBC group
\n
level, the SOT EVE came to -3.91% of tier-1 capital at year-end
\n
2023. This is well below the -15% threshold, which is monitored
\n
by the European Central Bank and indicates that the overall
\n
interest rate sensitivity of KBC\u2019s balance sheet is limited.
\n
As from 2023, the SOT EVE is complemented by the SOT NII,
\n
which measures the impact of two scenarios (parallel up and
\n
down) on NII. The impact of the worst-case scenario on NII is
\n
also set off against tier-1 capital. According to this measure,
\n
the interest rate sensitivity of KBC, too, is limited: it came to
\n
-1.27% at year-end 2023, compared to the 5% outlier
\n
threshold used by the supervisory authority.
\n
We also use other techniques to measure potential
\n
imbalances in terms of our interest rate position, such as gap
\n
analysis, the duration approach, scenario analysis and stress
\n
testing. Information regarding the Gap table, detailing
\n
mismatches between assets and liabilities by time bucket, is
\n
provided in the 2023 Risk Report.
\n
Where the group\u2019s insurance activities are concerned, the
\n
fixed-income investments for the non-life reserves are
\n
invested with the aim of matching the projected pay-out
\n
patterns for claims, based on extensive actuarial analysis.
\n

\n\n\n\n\n\n
The non-unit-linked life activities (class 21) combine a
\n
guaranteed interest rate with a discretionary participation
\n
feature (DPF) fixed by the insurer. The main risks to which the
\n
insurer is exposed as a result of such activities are a low-
\n
interest-rate risk (the risk that return on investments will drop
\n
below the guaranteed level) and the risk that the investment
\n
return will not be sufficient to give clients a competitive
\n
profit-sharing rate. The risk of low interest rates is managed
\n
by largely matching asset and liability cashflows of the life
\n
insurance portfolios covered by fixed-income investments.
\n
Unit-linked life insurance investments (class 23) are not dealt
\n
with here, since this activity does not entail any market risk
\n
for KBC.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Expected cashflows (not discounted), life
insurance activities
(in millions of EUR)0\u20131 year1\u20132 years2-3 years3-4 years4-5 years>5 yearsTotal
31-12-2023
Fixed-income assets backing liabilities, guaran -1 7877419327871 0448 22513 516
teed component
Equity------937
Property------108
Other (no maturity)------299
Liabilities, guaranteed component1 5951 2018078828349 47414 793
Difference in time-sensitive expected cashflows192-460125-95210-1 250-1 278
Mean duration of assets6.72 years
Mean duration of liabilities7.92 years
31-12-2022
Fixed-income assets backing liabilities, guaran -1 2331 4898551 0488448 73814 208
teed component
Equity------929
Property------112
Other (no maturity)------95
Liabilities, guaranteed component1 3671 2018078828349 47414 566
Difference in time-sensitive expected cashflows-1342884816611-737-358
Mean duration of assets6.66 years
Mean duration of liabilities8.76 years
\n\n\n\n
\n
As mentioned above, the main interest rate risk for the insurer
\n
is the risk of low rates for a longer period. Liabilities in the Life
\n
or Workmen\u2019s Compensation businesses tend to have
\n
maturities beyond the classic investment horizon and there is
\n
a risk that reinvestments may need to be done at lower rates.
\n
We adopt a liability-driven ALM approach focused on
\n
mitigating the interest rate risk in accordance with KBC\u2019s risk
\n
appetite. For the remaining interest rate risk, we adhere to a
\n
policy that takes into account the possible negative
\n
consequences of a sustained decline in interest rates, and
\n
have built up adequate supplementary reserves.
\n

\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Breakdown of the reserves for non-unit-linked life insurance by guaranteed interest
rate, insurance activities31-12-202331-12-2022
5.00% and higher3%3%
More than 4.25% up to and including 4.99%6%7%
More than 3.50% up to and including 4.25%4%4%
More than 3.00% up to and including 3.50%9%9%
More than 2.50% up to and including 3.00%3%3%
2.50% and lower73%72%
0.00%2%2%
Total 100%100%
\n\n\n\n
\n
Credit spread risk
\n
We purchase bonds with a view to acquiring interest income.
\n
Their selection is largely conservative and based on criteria
\n
such as credit risk rating, risk/return measures and liquidity
\n
characteristics.
\n
We manage the credit spread risk for, inter alia, the sovereign
\n
bond portfolio by monitoring the extent to which the value of
\n
the sovereign bonds would change if credit spreads were to
\n
go up by 100 basis points across the entire curve. In addition
\n
to the sovereign portfolio, KBC holds a non-sovereign bond
\n
portfolio (banks, corporations, supranational bodies). More
\n
details regarding the bond portfolio components can be
\n
found in the Risk Report.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Exposure to bonds at year-end 2023, KBC Group, carrying value (in millions of EUR)
At fair value For compari-
through other son purposes: Economic
comprehen-total impact of
At amortised sive income Held at year-end +100 basis
cost(FVOCI)for tradingTotal20223points 1
Sovereign 43 33713 2062 96659 50953 642-2 803
Of which2 :
Czech Republic12 0791 2782 25415 61113 556-721
Belgium7 0524 12618911 36710 664-659
France3 7101 703385 4515 408-223
Slovakia3 524617664 2073 618-219
Hungary2 4054721893 0662 624-114
Non-sovereign8 0353 70117211 90811 524-359
\n\n\n\n
\n
\n
1 Theoretical economic impact in fair value terms of a parallel 100-basis-point upward shift in the spread over the entire maturity structure. Only a portion of this impact is
\n
reflected in profit or loss and/or equity. Sensitivity figures relate to non-trading positions in sovereign bonds for the banking and insurance businesses (impact on trading book
\n
exposure was quite limited and amounted to 35 million euros at year-end 2023).
\n
2 Top 5 largest sovereign portfolios.
\n
3 2022 figures have been restated following the transition to IFRS17.
\n

\n\n\n\n\n\n
Equity risk
\n
The main exposure to equity is within our insurance business,
\n
where the ALM strategies are based on a risk-return
\n
evaluation, taking into account the market risk attached to
\n
open equity positions. The vast majority of the equity
\n
portfolio is held as an economic hedge for long-term
\n
liabilities of the insurance company. Smaller equity portfolios
\n
are also held by other group entities, where the portfolios are
\n
of a strategic nature, such as participations in relation to the
\n
execution of KBC\u2019s business model. The sectorial repartition
\n
of the portfolio is included in the Risk Report.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Equity portfolio of the KBC groupBanking activitiesInsurance activitiesGroup
31-12-202331-12-202231-12-202331-12-202231-12-202331-12-2022
In billions of EUR*0.230.221.391.331.631.55
of which unlisted0.220.210.180.140.40.35
\n\n\n\n
\n
* The main reason for the difference with \u2018Equity instruments\u2018 in Note 4.1 of the \u2018Consolidated financial statements\u2019 section is that shares in the trading book are excluded above,
\n
but included in the table in Note 4.1.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 25% drop in equity prices, impact on value
(in millions of EUR)20232022
Banking activities-59-55
Insurance activities-348-333
Total-407-387
\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Net realised gains Net unrealised gains
(in income statement)on year-end exposure
Non-trading equity exposure*(in equity)
(in millions of EUR)31-12-202331-12-202231-12-202331-12-2022
Banking activities--1912
Insurance activities2-121280
Total2-123191
\n\n\n
\n
* 2022 figures for insurance activities and total have been restated following the transition to IFRS 17.
\n
Real estate risk
\n
The group\u2019s real estate businesses hold a limited real estate
\n
investment portfolio. KBC Insurance also holds a diversified
\n
real estate portfolio, as an investment for non-life reserves
\n
and long-term life activities. The real estate exposure is
\n
viewed as a long-term hedge against inflation risks and as a
\n
way of optimising the risk/return profile of these portfolios.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 25% drop in real estate prices, impact on value (in millions of EUR)20232022
Bank portfolios-94-94
Insurance portfolios-107-78
Total-201-172
\n\n\n
\n
Inflation risk
\n
Inflation can impact a financial company indirectly in many
\n
ways, for instance via changes in interest rates or operational
\n
costs. Inflation in general therefore is not easily quantifiable
\n
as a market risk concept. However, certain financial products
\n
or instruments have a direct link with inflation and their value
\n
is directly impacted by a change in market expectations.
\n
KBC Bank uses inflation-linked bonds as an opportunity to
\n
diversify its asset portfolio. At KBC Insurance, inflation risk
\n
relates specifically to workmen\u2019s compensation insurance,
\n
where particularly in the case of permanent or long-term
\n
disabilities an annuity benefit is paid to the insured person
\n
(with the annuity being linked to inflation by law). KBC
\n
Insurance partly mitigates the risks by investing in inflation-
\n
linked bonds and complements its inflation hedging
\n
programme by investing in real estate and shares, as these
\n
assets are traditionally correlated with inflation and do not
\n
have a maturity date.
\n
The banking business holds a portfolio of inflation-linked
\n
bonds with a sensitivity to inflation (BPI) of 7.5 million euros (a
\n
0.10% move in inflation expectations) at the end of 2023. For
\n
the insurance activities the BPI of liabilities was calculated at
\n
4.8 million euros, against which inflation-linked bonds are
\n
held with a 4.4-million-euro BPI, supplemented with a
\n
26-million-euro real estate portfolio. The sensitivity of
\n
liabilities to inflation is only known with a quarter\u2019s delay.
\n
Therefore, the insurance figures in this section are based on
\n
the third quarter of 2023.
\n

\n\n\n\n\n\n
Foreign exchange risk
\n
We pursue a prudent policy as regards our structural
\n
currency exposure. Material foreign exchange exposure in
\n
the ALM books of banking entities with a trading book is
\n
transferred via internal deals to the trading book, where it is
\n
managed within the allocated trading limits. The foreign
\n
exchange exposure of banking entities without a trading
\n
book and of insurance and other entities has to be hedged, if
\n
material. However, non-euro-denominated equity holdings
\n
in the investment portfolio are not hedged, as foreign
\n
exchange volatility is considered part of the investment
\n
return.
\n
KBC focuses on stabilising the common equity ratio against
\n
foreign exchange fluctuations.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impact of a 10% decrease in currency value* BankingInsurance
(in millions of EUR)31-12-202331-12-202231-12-202331-12-2022
CZK-209-231-31-31
HUF-85-100-9-7
BGN-93-96-22-17
USD6-1-52-47
\n\n\n
\n
* Exposure for currencies where the impact exceeds 10 million euros in Banking or Insurance.
\n
Hedge accounting
\n
Assets and liabilities management uses derivatives to
\n
mitigate interest rate and foreign exchange risks. The aim of
\n
hedge accounting is to reduce the volatility in P&L resulting
\n
from the use of these derivatives.
\n
KBC decided not to apply hedge accounting to credit and
\n
equity risks. When the necessary criteria are met, it is applied
\n
to remove the accounting mismatch between the hedging
\n
instrument and the hedged item. For more information about
\n
hedge accounting, please see \u2018Notes on the accounting
\n
policies\u2019 in the \u2018Consolidated financial statements\u2019 section.
\n
Risk categories applying to hedge accounting
\n
Interest rates
\n
Hedging derivatives are used to mitigate an interest rate risk
\n
that arises from a difference in the interest rate profile of
\n
assets and their funding liabilities. The hedge accounting
\n
status of a hedge can be associated with either the asset or
\n
the liability item.
\n
Interest rate derivatives can be designated as:
\n
\u2022 Hedges of the fair value of recognised assets or liabilities.
\n
Changes in the fair value of derivatives that are
\n
designated and qualify as fair value hedges are recorded
\n
in profit or loss, together with any changes in the fair value
\n
of the hedged asset or liability that are attributable to the
\n
hedged risk. The gain or loss relating to the ineffective
\n
portion is also recognised in profit or loss.
\n
\u2022 Hedges of the cashflow of recognised assets and liabilities
\n
which are either certain or highly probable forecasted
\n
transactions. The effective portion of changes in the fair
\n
value of derivatives that are designated and qualify as
\n
cashflow hedges is recognised in the cashflow hedge
\n
reserve within equity. The gain or loss relating to the
\n
ineffective portion is recognised directly in profit or loss.
\n
KBC uses macro hedge accounting strategies for
\n
homogeneous portfolios of smaller items, where the
\n
frequency of occurrence or the relatively small size of the
\n
average operation renders the one-to-one relationship
\n
sub-optimal. This is the case for inter alia mortgages, loans
\n
to SMEs or customer deposits. Macro hedge strategies may
\n
be dynamic and undergo frequent changes based on
\n
balancing the portfolio (\u2018open portfolio hedge\u2019), among other
\n
things.
\n
The micro hedge designation is used when large individual
\n
assets or liabilities are hedged. Typical assets are large
\n
corporate loans and bond acquisitions for which the credit
\n
spread profile is relevant. Liabilities can include KBC\u2019s own
\n
issues or specific long-term facilities offered by a central
\n
bank. Micro hedges are either fair-value or cashflow based.
\n
Foreign exchange
\n
KBC has strategic investments denominated in non-euro
\n
currencies. The net asset value of significant participations is
\n
partly funded in the local currency by deposits and foreign
\n
exchange derivatives, to ensure stability of the common
\n
equity ratio. By using hedges of net investments in foreign
\n
operations, the foreign exchange component is reported in
\n
equity until realisation (unwinding of funding due to
\n
liquidation, dividend payments or other decreases in net
\n
asset value).
\n
KBC also has a limited portfolio of foreign-currency-
\n
denominated bonds that are funded through euro proceeds.
\n
These bonds are hedged by cross-currency interest rate
\n
swaps to create a synthetic EUR fixed-rate interest income.
\n
Cashflow hedge accounting (micro-hedge) is performed to
\n
mitigate foreign exchange volatility.
\n

\n\n\n\n\n\n
Hedge effectiveness
\n
Hedge effectiveness is determined at the inception of the
\n
hedge relationship, as well as through periodic prospective
\n
and retrospective effectiveness assessments, to ensure that
\n
a relevant relationship between the hedged item and the
\n
hedging instrument exists and remains valid.
\n
Effectiveness testing
\n
For interest rates, several prospective and retrospective tests
\n
are performed to ensure the relationship between the
\n
hedged item and the hedging instrument qualifies for the
\n
hedge accounting strategy.
\n
Prospective tests are mostly based either on a sensitivity
\n
analysis (verifying if the basis point value of the hedged
\n
portfolio relative to the hedging instrument stays within the
\n
80-125% interval) or volume tests (if the principal amount of
\n
hedge-eligible items exceeds the notional volume of
\n
hedging instruments expected to be repriced or repaid in
\n
each specified time bucket).
\n
For macro cashflow hedges, extensive forward-looking
\n
analyses assess the sufficient likelihood that the future
\n
volume of hedged items will largely cover the volume of
\n
hedging instruments. A hedge ratio \u2013 measuring the
\n
proportion of a portfolio that is hedged by derivatives \u2013 is
\n
calculated for each hedging strategy.
\n
The retrospective effectiveness test of the hedge
\n
relationship is periodically carried out by comparing the
\n
change in fair value of the portfolio of hedging instruments
\n
relative to the change in fair value of the hedged eligible
\n
items imputable to the hedged risk over a given period (the
\n
ratio of fair value changes remains within the 80-125%
\n
interval).
\n
For foreign exchange hedging, effectiveness is ensured by
\n
adjusting the sum of the nominal amount of the funding
\n
deals and foreign exchange derivatives to the targeted
\n
hedge amount of the strategic participations. For foreign-
\n
currency-denominated bonds swapped into euro, the start
\n
date, maturity date and coupon dates are also matched.
\n
Sources of hedge ineffectiveness
\n
Ineffectiveness for interest rate swaps may occur due to:
\n
\u2022 differences in relevant terms between the hedged item
\n
and the hedging instrument (it can include discrepancies
\n
in interest curves and in periodicity);
\n
\u2022 a reduction in volume of the hedged item that would fall
\n
under the volume of hedging instruments for any time
\n
bucket;
\n
\u2022 the credit value adjustment on the interest rate swap not
\n
being matched by the loan. However, hedging swaps are
\n
fully collateralised or traded through clearing houses and
\n
the credit value adjustment is limited.
\n
Regarding the hedge of the net investment in foreign
\n
currency, the interest rate component from the hedging
\n

\n\n\n\n\n\n
instruments can be a source of inefficiency. The counterparty
\n
risk on the hedging instrument, even if collateralised, can
\n
also be a source of inefficiency.
\n
Discontinuation of hedge accounting
\n
Hedge accounting strategies failing the effectiveness tests
\n
are discontinued. A de-designated hedging instrument can
\n
be re-designated in a new hedge relationship. Effective
\n
hedge accounting strategies may also be discontinued for
\n
technical or strategic reasons. Any impact on profit and loss
\n
arising from hedge ineffectiveness and discontinuation is
\n
reported to the Group ALCO.
\n
Capital sensitivity to market movements
\n
Available capital can be impacted by changes in the value
\n
of balance sheet items (e.g., sovereign and corporate bonds
\n
and equity) booked at fair value through other
\n
comprehensive income or fair value through profit or loss.
\n
This impact can be negative when the market is stressed,
\n
which can be triggered by a number of market parameters,
\n
including swap rates or bond spreads that increase or by
\n
equity prices that fall. At KBC, we use this capital sensitivity
\n
as a common denominator to measure the vulnerability of
\n
the banking book to different market risk shocks.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CET1 sensitivity to main market drivers (under Danish compromise), KBC group (as % points of 31-12-202331-12-2022
CET1 ratio), IFRS impact caused by:
+100-basis-point parallel shift in interest rates-0.1%-0.1%
+100-basis-point parallel shift in spread-0.2%-0.1%
-25% in equity prices-0.1%-0.1%
\n\n\n
\n
The table shows that the sensitivity of capital to market
\n
movements is limited. This is because the majority of KBC\u2019s
\n
bond portfolio is deemed to be held to maturity and is
\n
therefore booked at amortised cost. Those positions do not
\n
impact capital unless they are liquidated before maturity.
\n
Note that KBC holds material amounts of liquid assets (see
\n
the liquidity section) to absorb unexpected funding outflows.
\n
If these are not sufficient, KBC can still enter into repo
\n
agreements to access liquidity rather than having to realise
\n
losses on the bonds.
\n

\n\n\n\n\n\n

\n

\n

\n
Market risk in trading activities
\n
Market risk relates to changes in the level or in the volatility of prices in financial markets. Market risk in trading activities
\n
is the potential negative deviation from the expected value of a financial instrument (or portfolio of such instruments)
\n
in the trading book due to changing interest rates, exchange rates, equity or commodity prices, etc.
\n
KBC\u2019s strategic objectives in undertaking trading activities
\n
are to offer sound and appropriate financial products and
\n
solutions to its clients in order to help them manage their risks
\n
and access capital, and to engage in certified market-
\n
making activities. Hedging the market risk arising from
\n
providing clients with such bespoke solutions with standard
\n
market products leaves us with some residual market risks
\n
due to the mismatch between the more market-standard
\n
sizes and expiry dates and the solutions provided to our
\n
clients.
\n
The focus of our trading activities is on interest-rate
\n
instruments, while activity on the foreign exchange markets
\n
and in relation to equity has traditionally been limited. These
\n
activities are carried out by our dealing rooms in our home
\n
countries as well as via a minor presence in the UK and Asia.
\n
Wherever possible and practical, the residual trading
\n
positions of our foreign entities are systematically transferred
\n
to KBC Bank NV, reflecting that the group\u2019s trading activity is
\n
managed centrally both from a business and a risk
\n
management perspective. Consequently, KBC Bank NV holds
\n
about 98% of the trading-book-related regulatory capital of
\n
KBC Group NV.
\n
KBC\u2019s low risk appetite for the market risk in trading activities
\n
is illustrated by the fact that market risk RWA for trading
\n
activities is around 2 to 3% of KBC\u2019s total RWA. The sections
\n
below give a general overview regarding market risk in
\n
trading activities. For more details, please refer to KBC\u2019s Risk
\n
Report, which is available at www.kbc.com.
\n
Managing market risk
\n
In the area of market risk in the trading activities, the
\n
Executive Committee is supported by the Group Markets
\n
Committee (GMC), which advises on risk monitoring and
\n
capital usage with respect to trading activities. The
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
governance, rules and procedures on how trading risk
\n
management should be performed throughout the group are
\n
outlined in the Trading Market Risk Management Framework.
\n
Its implementation is monitored by Group Risk and its Market
\n
Risk Trading Competence Centre.
\n
The building blocks for managing market risk
\n
\u2022 Risk identification: the risk function analyses the results of
\n
value and risk calculations, market developments, ESG risk
\n
assessments, industry trends, new modelling insights,
\n
changes in regulations, etc. Furthermore, before a new or
\n
changed dealing room product or activity can be
\n
introduced, the risk function screens whether the risk
\n
aspects (including ESG risks) are correctly and sufficiently
\n
covered and provides risk advice that includes powers of
\n
veto and is part of the NAPP.
\n
\u2022 Risk measurement: ownership of the definitions used for
\n
the group-wide measurement of trading market risk lies
\n
with the risk function. We measure risk via a number of
\n
parameters including nominal positions, concentrations,
\n
Basis Point Value (BPV) and other sensitivities (the so-
\n
called \u2018greeks\u2019) and scenario analysis. However, the
\n
primary tool we use for measuring and monitoring market
\n
risk exposures in the trading book is the Historical Value-
\n
at-Risk (HVaR) method, which gives an estimate of the
\n
amount of economic value that might be lost on a given
\n
portfolio due to market risk over a defined holding period,
\n
with a given confidence level.
\n
\u2022 Setting and cascading risk appetite: the risk appetite for
\n
market risk in trading activities is set in line with the overall
\n
requirements as defined in our overarching risk
\n
management framework and is overseen by the GMC via a
\n
risk limit framework consisting of a hierarchy of limits and
\n
early warning indicators. These are defined down to
\n
trading desk level and, in addition to HVaR, include a series
\n
of concentration limits, basis-point-value limits and (stress)
\n
scenario limits.
\n
\u2022 Risk analysis, reporting and follow-up: in addition to the
\n
more proactive elements described under \u2018Risk
\n
identification\u2019, this involves compiling the necessary
\n
external and internal reports, issuing advice on business
\n
proposals, and monitoring and advising on the risks
\n
attached to the positions. We monitor and follow up the
\n
risks attached to the positions on a daily basis by means of
\n
the risk limit framework. The GMC, which meets every
\n
month, receives an extensive Core Report as well as
\n
periodic and ad hoc memos and reports. The GMC also
\n
receives a dashboard halfway between the monthly
\n
meetings whose frequency is increased (up to daily, if
\n
needed) depending on market circumstances. The
\n
Executive Committee ratifies the minutes of the GMC
\n
meetings and also receives market-risk-related
\n
information and risk signals in its Integrated Risk Report
\n
eight times per year).
\n
\u2022 Stress testing: in addition to the risk limit framework, we
\n
conduct extensive stress tests on our positions on a weekly
\n
basis. Whereas the HVaR model captures potential losses
\n
under normal market conditions, stress tests show the
\n
impact of exceptional circumstances and events with a
\n
low degree of probability. The historical and hypothetical
\n
stress-test scenarios incorporate both market risk and the
\n
liquidity aspects of disruptions in the market. The stress
\n
tests are discussed at GMC meetings to enable the
\n
members to gain an insight into potential weaknesses in
\n
the positions held by the group.
\n
ESG in market risk (trading) management
\n
Climate and other environmental risks, an important subject
\n
in these times, are indeed considered and analysed in the
\n
context of business planning and have been integrated in
\n
market risk management. While ESG risk assessments (e.g.,
\n
the Climate Risk Impact Map and pilot studies on other
\n
environmental risks) have confirmed that ESG aspects can be
\n
considered to be negligible in a market risk context, the
\n
Group Markets Committee (GMC) is kept closely informed of
\n
the immateriality via a quarterly update (including ESG
\n
dashboards and climate risk stress test results for the trading
\n
book) and a full review is submitted on an annual basis.
\n
More information can be found in the Risk Report, available
\n
at www.kbc.com.
\n
Market risk profile
\n
Our Approved Internal Model is used to calculate the vast
\n
majority of market risk regulatory capital. Regulatory capital
\n
for business lines not included in the Approved Internal Model
\n
is measured according to the Standardised Approach.
\n
The tables below show the Management HVaR (using our
\n
Approved Internal Model and a 99% confidence interval,
\n
one-day holding period) for the residual trading positions at
\n
all the dealing rooms of KBC that can be modelled by HVaR
\n
and the breakdown per risk type.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Market risk (Management HVaR) (in millions of EUR)20232022
Average for 1Q78
Average for 2Q69
Average for 3Q610
Average for 4Q79
As at 31 December87
Maximum in year1012
Minimum in year46
\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Average for Average for
Breakdown by risk factor of trading HVaR for the KBC group (Management HVaR; in millions of EUR)20232022
Interest rate risk6.38.6
FX risk0.91.3
FX options risk0.20.3
Equity risk2.10.8
Diversification effect-3.0-2.1
Total HVaR6.58.9
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag103": { "value": "\n
Liquidity risk
\n
Liquidity risk is the risk that an organisation will be unable to meet its liabilities and obligations as they come due,
\n
without incurring higher-than-expected costs.
\n
Managing liquidity risk
\n
In the area of liquidity risk, the Executive Committee is
\n
supported by the Group Assets and Liability Committee
\n
(ALCO), which is to provide assistance in the area of
\n
(integrated) balance sheet management at group level,
\n
including liquidity and funding. The governance, rules and
\n
procedures and how asset and liability risk management is
\n
performed throughout the group are outlined in the Liquidity
\n
Risk Management Framework. Its implementation is
\n
monitored by Group Risk and its Liquidity Risk Competence
\n
Centre, acting as the second line of defence. Within the risk
\n
function, the ALM & Liquidity Risk Council, chaired by the
\n
CRO Treasury & Markets, aims to establish, facilitate,
\n
promote and support the solid and efficient integration of all
\n
tasks assigned to the local and group risk departments.
\n
The Group and Local Treasury functions act as the first line of
\n
defence and are responsible for KBC\u2019s overall liquidity and
\n
funding management. The Group Treasury function monitors
\n
and steers the liquidity profile on a daily basis and sets the
\n
policies and steering mechanisms for funding management
\n
(intra-group funding, funds transfer pricing). These policies
\n
ensure that local management has an incentive to work
\n
towards a sound funding profile. The Group Treasury function
\n
also actively monitors its collateral on a group-wide basis.
\n
The building blocks for managing liquidity risk
\n
\u2022 Risk identification: the NAPP process, the Climate Risk
\n
Impact Map, the risk scan, stress testing and materiality
\n
assessments are important tools used for risk
\n
identification. An annual assessment of key risk drivers
\n
impacting liquidity is performed as well. When relevant, risk
\n
signals are presented in Treasury Risk Reports and
\n
Integrated Risk Reports.
\n
\u2022 Risk measurement: identified liquidity risks are measured
\n
by means of both regulatory metrics such as the Liquidity
\n
Coverage Ratio (159% in 2023) and the Net Stable Funding
\n
Ratio (136%), and internal metrics on, for example, the
\n
funding mix and concentration and the composition of the
\n
liquid asset buffer. In the maturity analysis table below,
\n
KBC\u2019s structural liquidity risk is illustrated by grouping the
\n
assets and liabilities according to the remaining term to
\n
maturity (using the contractual maturity date). The
\n
difference between the cash inflows and outflows is
\n
referred to as the \u2018net funding gap\u2019.
\n
\u2022 Setting and cascading risk appetite: the ALCO monitors
\n
the development of the liquidity risk profile in relation to
\n
the limits.
\n
\u2022 Risk analysis, reporting and follow-up: to mitigate
\n
day-to-day liquidity risk, group-wide trends in funding
\n
liquidity and funding needs are monitored continuously by
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
the Group Treasury function. A Liquidity Contingency Plan
\n
drafted by the Group Treasury function is in place to
\n
address possible liquidity crisis situations and is tested at
\n
least annually.
\n
\u2022 Stress testing: liquidity stress tests assess KBC\u2019s liquidity
\n
contingency risk by measuring how the liquidity buffer of
\n
the group\u2019s bank and insurance entities changes under
\n
extreme stressed scenarios. This buffer is based on
\n
assumptions regarding liquidity outflows and liquidity
\n
inflows resulting from actions to increase liquidity. The
\n
liquidity buffer has to be sufficient to cover liquidity needs
\n
over (i) a period that is required to restore market
\n
confidence in the group following a KBC-specific event,
\n
(ii) a period that is required for markets to stabilise after a
\n
general market event and (iii) a combined scenario, which
\n
takes a KBC-specific event and a general market event
\n
into account. This information is fed into the Liquidity
\n
Contingency Plan.
\n
Moreover, KBC has an Internal Liquidity Adequacy
\n
Assessment Process (ILAAP) in place to ensure it has robust
\n
strategies, policies, processes and systems for identifying,
\n
measuring, managing and monitoring liquidity risk and
\n
funding positions over all appropriate time horizons, in order
\n
to maintain adequate levels of liquidity buffers.
\n
ESG in liquidity risk management
\n
Climate and other environmental risks are considered and
\n
analysed in the context of liquidity risk management. The
\n
Climate Risk Impact Map and pilots on other environmental
\n
risks (see \u2018ESG in our risk management\u2019), however, show that
\n
physical and transition risks will have a limited impact on
\n
liquidity risk management. Despite this immateriality, the
\n
ALCO is regularly informed about developments in ESG risk in
\n
the context of liquidity risk management.
\n
More information is available in the Risk Report, available at
\n
www.kbc.com.
\n
Impact of external developments on liquidity
\n
risk
\n
The significant increase in short-term interest rates following
\n
the monetary policy tightening implemented by the ECB as
\n
of 2022 impacted the composition of the deposit base at
\n
KBC Group. However, no significant deposit outflows were
\n
observed until the beginning of September. In September, a
\n
tax-beneficial Belgian State Note with a one-year maturity
\n
was issued. Although the issuance of the Belgian State Note
\n
can be considered as a stress event, KBC passed the test
\n
without any major liquidity impact (the issuance led to a
\n
deposit outflow of 5.7 billion euros at the level of KBC Bank
\n
NV and CBC Banque SA).
\n
Maturity analysis
\n
The table below shows the maturity analysis of the total
\n
inflows and outflows. Note that the structural liquidity gap
\n
shown in the table does not include the concept of a Liquid
\n
Asset Buffer (i.e. the fact that KBC can monetise its liquid
\n
bonds at all times via repo or pledging). Rather, in this table,
\n
cash-generating capacity from bonds is only visible at final
\n
maturity of the bond. As a result, the net funding gaps shown
\n
in the first buckets in the table are a clear overestimation of
\n
the risk as in practice KBC would monetise its Liquid Asset
\n
Buffer (97 billion euros at year-end 2023, of which 72 billion
\n
euros in unencumbered central bank eligible assets and the
\n
remainder in cash and withdrawable central bank
\n
receivables) to address these net outflows.
\n
At year-end 2023, KBC had 72 billion euros\u2019 worth of
\n
unencumbered central bank eligible assets, 58 billion euros
\n
of which in the form of liquid government bonds (80%). The
\n
remaining available liquid assets were mainly covered bonds
\n
(11%). Most of the liquid assets are expressed in our home
\n
market currencies. The funding from non-wholesale markets
\n
was accounted for by stable funding from core customer
\n
segments in our core markets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Liquidity risk (excluding intercompany deals)*<= 1 1\u201333\u201312 1\u20135 >5 On Not
(in billions of EUR)monthmonthsmonthsyearsyearsdemanddefinedTotal
31-12-2023
Total inflows41227100115747312
Total outflows49302026615229312
Professional funding1031004018
Customer funding2414141351480218
Debt certificates111351310043
Other4000002933
Liquidity gap (excl. undrawn commitments)-45-18774108-145180
Undrawn commitments-------48-48
Financial guarantees-------11-11
Net funding gap (incl. undrawn commitments)-45-18774108-145-41-59
31-12-2022
Total inflows61220821155334322
Total outflows38202924517829322
Professional funding6020504036
Customer funding19981231740226
Debt certificates8111710028
Other4000002933
Liquidity gap (excl. undrawn commitments)-32-8-958111-12550
Undrawn commitments\u2013\u2013\u2013\u2013\u2013\u2013-47-47
Financial guarantees\u2013\u2013\u2013\u2013\u2013\u2013-11-11
Net funding gap (incl. undrawn commitments)-32-8-958111-125-53-58
\n\n\n\n\n\n\n\n\n\n\n
\n
* Cashflows include interest rate flows consistent with internal and regulatory liquidity reporting. Inflows/outflows that arise from margin calls posted/received for MtM positions
\n
in derivatives are reported in the \u2018Not defined\u2019 bucket. \u2018Professional funding\u2019 includes all deposits from credit institutions and investment firms, as well as all repos. Instruments
\n
are classified on the basis of their first callable date. Some instruments are reported at fair value (on a discounted basis), whereas others are reported on an undiscounted basis
\n
(in order to reconcile them with Note 4.1 of the \u2018Consolidated financial statements\u2019 section). Due to the uncertain nature of the maturity profile of undrawn commitments and
\n
financial guarantees, these instruments are reported in the \u2018Not defined\u2019 bucket. The \u2018Other\u2019 category under \u2018Total outflows\u2019 contains own equity, short positions, provisions for
\n
risks and charges, tax liabilities and other liabilities.
\n
Funding information
\n
We have a strong retail/mid-cap deposit base in our core
\n
markets, resulting in a stable funding mix. A significant
\n
portion of the funding is attracted from core customer
\n
segments and markets.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Funding mixInformation31-12-202331-12-2022
Funding from customers1Demand deposits, term deposits, savings deposits, other deposits, 79%79%
savings certificates and debt issues placed in the network
Debt issues placed with institu-
tional investorsIncluding covered bonds, tier-2 issues, KBC Group NV senior debt9%6%
Net unsecured interbank fundingIncluding TLTRO4%7%
Net secured funding2Repo financing-7%-3%
Certificates of deposit\u20136%3%
Total equityIncluding AT1 issues9%7%
Total100%100%
in billions of EUR276287
\n\n\n\n\n\n\n\n\n\n\n
\n
1 Some 86% of this funding relates to private individuals and SMEs at year-end 2023.
\n
2 Negative on account of KBC carrying out more reverse repo transactions than repo transactions.
\n

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Sensitivity to parameters underlying the
\n
IFRS 17 valuation of insurance liabilities
\n
The table gives an overview of the sensitivity of IFRS 17
\n
insurance liabilities to a change at the reporting date of a
\n
selection of parameters which are used in the calculation of
\n
the IFRS 17 fulfilment cashflows. Liabilities on the balance
\n
sheet which are in scope of IFRS 9 reporting, mainly unit-
\n
linked liabilities, are not included in the sensitivity reporting
\n
below. The impact is reported before reinsurance, given the
\n
small impact which the reinsurance has on the sensitivities.
\n

\n\n\n\n\n\n

\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
31-12-202331-12-2022
Sensitivity (in millions of EUR)Discounted Contrac-Result Equity: OCI Discounted Contrac-Result Equity: OCI
fulfilmenttual Service before tax before taxfulfilmenttual Service before tax before tax
cashflowsMargincashflowsMargin
Life insurance: balance11 7452 117--11 5421 902--
Impact of:
Mortality rates: +1%5-30-24-3-0-1
Mortality rates: -1% -5302-43-01
Morbidity rates: +1%6-6-015-601
Morbidity rates: -1%-660-1-56-0-1
Expenses: +5%49-54-3941-48-311
Expenses: -5%-49533-9-41483-11
Lapse rate: +10%55507-11237244-66
Lapse rate: -10%-58-52-6116-39-23-467
Non-life insurance: balance2 238---2 061---
Impact of:
Unpaid claims & expenses: +5%111--1165102--1108
Unpaid claims & expenses: -5%-111-116-5-102-110-8
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n
\n

\n\n\n\n

\n
Sensitivity of the IFRS 17 valuation of insurance liabilities to a change in the discount curve
\n
The table shows the sensitivity to a 30-bp parallel shift up and down of the discount curve.
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
31-12-202331-12-2022
Sensitivity (in millions of EUR)Fulfilment Contrac- Result Equity: OCI Fulfilment Contrac-Result Equity: OCI
cashflowstual Service before taxbefore taxcashflowstual Service before taxbefore tax
MarginMargin
Life insurance:
Assets: balance14 466-- - 14 244---
Impact of discount rate +0.30%-22002-222-19601-197
Impact of discount rate -0.30%2280-22302030-1204
Insurance liabilities (excl. unit-linked): balance11 7452 117-- 11 5421 902--
Impact of discount rate +0.30%-30651300-31416-0296
Impact of discount rate -0.30%354-6-0-348336-161-317
Combined effect--------
Impact of discount rate +0.30%865378118161100
Impact of discount rate -0.30%-126-6-2-118-132-16-0-112
Non-life insurance
Assets: balance4 152- -- 3 800---
Impact of discount rate +0.30%-1200-12-1600-16
Impact of discount rate -0.30%120012170017
Insurance liabilities: balance2 238 -- - 2 061---
Impact of discount rate +0.30%-310031-280028
Impact of discount rate -0.30%310-0-312800-28
Combined effect- -- - ----
Impact of discount rate +0.30%190019120012
Impact of discount rate -0.30%-190-0-19-1200-12
\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n
\n

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\u2022 The \u2018Dividends\u2019 item in 2022 (3.6 billion euros) includes the final dividend of 7.60 euros per share (paid in May 2022) and the
\n
interim dividend of 1.00 euro per share (paid in November 2022). The \u2018Dividends\u2019 item in 2023 (1.7 billion euros) includes the
\n
final dividend of 3.00 euros per share (paid in May 2023) and the interim dividend of 1.00 euro per share (paid in November
\n
2023).
\n
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "Tag690": { "value": "3600000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaid", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag691": { "value": "7.6", "decimals": 2, "dimensions": { "concept": "kbc:FinalDividendPaidPerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag692": { "value": "1", "decimals": 2, "dimensions": { "concept": "kbc:InterimDividendPaidPerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag693": { "value": "1700000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaid", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag694": { "value": "3", "decimals": 2, "dimensions": { "concept": "kbc:FinalDividendPaidPerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag695": { "value": "1", "decimals": 2, "dimensions": { "concept": "kbc:InterimDividendPaidPerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag786": { "value": "\n
\u2022 We propose to the General Meeting of Shareholders of 2 May 2024 a total dividend of 4.15 euros per share entitled to
\n
dividend related to 2023, comprising the interim dividend of 1.00 euro paid in November 2023 and a final dividend of 3.15
\n
euros, payable in May 2024. Note that shares repurchased under the current share buyback programme are excluded from
\n
the calculation of the number of shares entitled to dividend (see also \u2018Abridged company annual accounts\u2019 elsewhere in
\n
this annual report). In line with our capital allocation plan for 2023, in the first half of 2024 the Board of Directors will decide
\n
at its own discretion on the distribution of the surplus capital exceeding a 15% fully loaded common equity ratio.
\n
\n\n
Note 3.2: Dividend income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag696": { "value": "4.15", "decimals": 2, "dimensions": { "concept": "kbc:GrossDividendPerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag697": { "value": "3.15", "decimals": 2, "dimensions": { "concept": "kbc:DividendPayablePerShare", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "Tag698": { "value": "0.15", "decimals": 2, "dimensions": { "concept": "kbc:PercentageExceedingFullyLoadedCommonEquityRatioAsDistributionOfSurplusCapital", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00" } }, "Tag699": { "value": "1166000000", 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"scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "ifrs-full:ComponentsOfEquityAxis": "ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember", "unit": "iso4217:EUR" } }, "Tag713": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:Equity", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "ifrs-full:ComponentsOfEquityAxis": "ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember", "unit": "iso4217:EUR" } }, "Tag714": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:Equity", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "ifrs-full:ComponentsOfEquityAxis": "ifrs-full:ReserveOfChangeInFairValueOfFinancialLiabilityAttributableToChangeInCreditRiskOfLiabilityMember", "unit": "iso4217:EUR" } }, "Tag715": { "value": "1799000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:Equity", "entity": "scheme:213800X3Q9LSAKRUWY91", 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"ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag207": { "value": "-330000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag208": { "value": "503000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag209": { "value": "53961000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag210": { "value": "67481000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag211": { "value": "14697000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" }, "links": { "ftTyp_fact-footnote": { "ftGrp_default": [ "footnote1" ] } } }, "Tag212": { "value": "6063000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" }, "links": { "ftTyp_fact-footnote": { "ftGrp_default": [ "footnote1" ] } } }, "Tag213": { "value": "20170000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" }, "links": { "ftTyp_fact-footnote": { "ftGrp_default": [ "footnote1" ] } } }, "Tag214": { "value": "11225000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" }, "links": { "ftTyp_fact-footnote": { "ftGrp_default": [ "footnote1" ] } } }, "Tag215": { "value": "59000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsReceived", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag216": { "value": "59000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsReceived", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag217": { "value": "34530000000", "decimals": -6, "dimensions": { "concept": "kbc:CashCashBalancesWithCentralBanksAndOtherDemandDepositsWithCreditInstitutions", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag218": { "value": "51427000000", "decimals": -6, "dimensions": { "concept": "kbc:CashCashBalancesWithCentralBanksAndOtherDemandDepositsWithCreditInstitutions", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag219": { "value": "222000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:LoansAndAdvancesToBanks", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag220": { "value": "1237000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:LoansAndAdvancesToBanks", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag221": { "value": "25345000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ReverseRepurchaseAgreementsAndCashCollateralOnSecuritiesBorrowed", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag222": { "value": "19903000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ReverseRepurchaseAgreementsAndCashCollateralOnSecuritiesBorrowed", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag223": { "value": "6136000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DepositsFromBanks", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag224": { "value": "5085000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DepositsFromBanks", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag225": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag226": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag227": { "value": "53961000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag228": { "value": "67481000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag229": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RestrictedCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag230": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RestrictedCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag231": { "value": "\n
\u2022 KBC uses the indirect method to report on cashflows from operating activities.
\n

\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag232": { "value": "\n
\u2022 Net cash from or used in operating activities:
\n
- In 2023, this item included a repayment of part of the amount borrowed under TLTRO III (12.9 billion euros), lower demand
\n
deposits and savings deposits (partly due to the outflow to the Belgian State Note in September 2023), lower repos and
\n
higher mortgage loans and term loans, partly offset by growth in certificates of deposit and time deposits;
\n
- In 2022, this item included the realised result and strong deposit growth (mainly customer deposits) and repos, partly
\n
offset by a growing home loan and term loan portfolio and repayment of part of the amount borrowed under TLTRO III
\n
(9.1 billion euros);
\n
\u2022 Net cash from or used in investing activities:
\n
- In 2023, this item included the cash proceeds from the finalisation of the sale in Ireland, partly offset by additional
\n
investments in debt securities at amortised cost.
\n
- In 2022, this item included additional investments in debt securities at amortised cost, as well as -42 million euros related
\n
to the acquisition of the Bulgarian operations of Raiffeisenbank, -52 million euros related to the acquisition of a property
\n
company and +111 million euros related to the sale of KBC Verzekeringen Vastgoed Nederland BV.
\n
\u2022 Net cash from or used in financing activities:
\n
- In 2023, this item included the dividend payout (-1.7 billion euros), treasury share buybacks (-0.5 billion euros) and the
\n
issue or repayment of promissory notes and other debt securities (+6.0 billion euros); KBC IFIMA, KBC Group NV, \u010cSOB in
\n
the Czech Republic and KBC Bank NV accounted for the bulk of the figure for 2023, which related primarily to 8.6 billion
\n
euros\u2019 worth of these instruments being issued and 2.7 billion euros being redeemed. This item also included the
\n
proceeds from or repayment of subordinated liabilities (+0.5 billion euros; KBC Group NV accounted for the bulk of the
\n
figure for 2023) and the issue of an additional tier-1 instrument (+0.75 billion euros).
\n
- In 2022, this item included the dividend payout (-3.6 billion euros) and the issue or repayment of promissory notes and
\n
other debt securities. KBC IFIMA, KBC Group NV, \u010cSOB in the Czech Republic and KBC Bank NV accounted for the bulk
\n
of the figure for 2022, which related primarily to 5.6 billion euros\u2019 worth of these instruments being issued and 4.9 billion
\n
euros being redeemed. This item also included the proceeds from or repayment of subordinated liabilities. KBC Group
\n
NV accounted for the bulk of the figure for 2022, which related primarily to redemptions.
\n

\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag233": { "value": "12900000000", "decimals": -8, "dimensions": { "concept": "kbc:RepaymentsOfBorrowingsUnderTargetedLongerTermRefinancingOperations", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag234": { "value": "9100000000", "decimals": -8, "dimensions": { "concept": "kbc:RepaymentsOfBorrowingsUnderTargetedLongerTermRefinancingOperations", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag248": { "value": "-42000000", "decimals": -6, "dimensions": { "concept": "kbc:AcquisitionOfSubsidiaryOrBusinessUnitNetOfCashAcquiredClassifiedAsInvestingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "ifrs-full:BusinessCombinationsAxis": "kbc:BulgarianOperationsOfRaiffeisenbankMember", "unit": "iso4217:EUR" } }, "Tag249": { "value": "-52000000", "decimals": -6, "dimensions": { "concept": "kbc:AcquisitionOfSubsidiaryOrBusinessUnitNetOfCashAcquiredClassifiedAsInvestingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "ifrs-full:BusinessCombinationsAxis": "kbc:AcquisitionOfPropertyCompanyMember", "unit": "iso4217:EUR" } }, "Tag237": { "value": "111000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashFlowsFromLosingControlOfSubsidiariesOrOtherBusinessesClassifiedAsInvestingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag238": { "value": "1700000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag239": { "value": "500000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag240": { "value": "6000000000", "decimals": -8, "dimensions": { "concept": "kbc:ProceedsFromIssueRepaymentsOfPromissoryNotesAndOtherDebtSecurities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag241": { "value": "8600000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag242": { "value": "2700000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:RepaymentsOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag243": { "value": "500000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfSubordinatedLiabilities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag244": { "value": "750000000", "decimals": -7, "dimensions": { "concept": "kbc:ProceedsFromPaymentForIssueOfAdditionalTier1Instruments", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag245": { "value": "3600000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag246": { "value": "5600000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag247": { "value": "4900000000", "decimals": -8, "dimensions": { "concept": "ifrs-full:RepaymentsOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag250": { "value": "This item also included the proceeds from or repayment of subordinated liabilities. KBC GroupNV accounted for the bulk of the figure for 2022, which related primarily to redemptions.", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "Tag789": { "value": "\n

\n

\n

\n
Note 1.1: Statement of compliance
\n
\u00a0
\n
The consolidated financial statements of KBC Group\u00a0NV, including all the notes, were authorised for issue on 14 March 2024
\n
by the Board of Directors.\u00a0They have been prepared in accordance with the International Financial Reporting Standards as
\n
adopted for use in the European Union (\u2018endorsed IFRS\u2019) and present one year of comparative information.\u00a0All\u00a0amounts are
\n
shown in millions of euros and rounded to\u00a0the million (unless otherwise stated).
\n
\u00a0
\n\n

\n

\n

\n\n

\n

\n\n
The following standards became effective on 1 January 2023:
\n
\u2022\u00a0\u00a0IFRS 17, with significant consequences for KBC (see Note 1.5).
\n
\u2022\u00a0\u00a0Amendments to IAS 1 Presentation of Financial Statements: the amended IAS 1 requires that companies provide information
\n
about material accounting policies rather than a list of their main accounting policies. The impact of these amendments
\n
was limited for KBC.
\n
\u2022\u00a0\u00a0Amendments to IAS 12 International Tax Reform \u2013 Pillar Two Model Rules: the amended IAS 12 provides companies with a
\n
temporary exception to the recognition and disclosure requirements for deferred tax assets/liabilities related to Pillar Two
\n
income taxes and introduces specific disclosure requirements for companies affected by this tax reform (see Note 3.11).
\n

\n\n\n\n\n
\u00a0
\n\n
The following IFRS standards were issued but not yet effective in 2023.\u00a0KBC will apply these standards when they become
\n
mandatory.
\n
\u2022\u00a0\u00a0The IASB has published several limited amendments to existing IFRSs and IFRICs. They will be applied when they become
\n
mandatory, but their impact is currently estimated to be negligible.
\n

\n\n\n\n\n
\u00a0
\n
The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n
\u00a0
\n
\u00a0
\n
As a bank-insurance group, KBC presents banking and insurance information in its financial statements on an integrated
\n
basis. Information relating specifically to our banking business and to our insurance business is provided separately in the
\n
respective annual reports of KBC Bank and KBC Insurance under \u2018Information on\u00a0KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com/en/investor-relations.
\n

\n\n\n\n\n

\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag819": { "value": "The consolidated financial statements of KBC Group\u00a0NV, including all the notes, were authorised for issue on 14 March 2024 by the Board of Directors.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag820": { "value": "KBC Group", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag821": { "value": "They have been prepared in accordance with the International Financial Reporting Standards as adopted for use in the European Union (\u2018endorsed IFRS\u2019) and present one year of comparative information.", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag823": { "value": "\n

\n

\n

\n\n

\n

\n\n
The following standards became effective on 1 January 2023:
\n
\u2022\u00a0\u00a0IFRS 17, with significant consequences for KBC (see Note 1.5).
\n
\u2022\u00a0\u00a0Amendments to IAS 1 Presentation of Financial Statements: the amended IAS 1 requires that companies provide information
\n
about material accounting policies rather than a list of their main accounting policies. The impact of these amendments
\n
was limited for KBC.
\n
\u2022\u00a0\u00a0Amendments to IAS 12 International Tax Reform \u2013 Pillar Two Model Rules: the amended IAS 12 provides companies with a
\n
temporary exception to the recognition and disclosure requirements for deferred tax assets/liabilities related to Pillar Two
\n
income taxes and introduces specific disclosure requirements for companies affected by this tax reform (see Note 3.11).
\n

\n\n\n\n\n
\u00a0
\n\n
The following IFRS standards were issued but not yet effective in 2023.\u00a0KBC will apply these standards when they become
\n
mandatory.
\n
\u2022\u00a0\u00a0The IASB has published several limited amendments to existing IFRSs and IFRICs. They will be applied when they become
\n
mandatory, but their impact is currently estimated to be negligible.
\n

\n\n\n\n\n
\u00a0
\n
The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n
\u00a0
\n
\u00a0
\n
As a bank-insurance group, KBC presents banking and insurance information in its financial statements on an integrated
\n
basis. Information relating specifically to our banking business and to our insurance business is provided separately in the
\n
respective annual reports of KBC Bank and KBC Insurance under \u2018Information on\u00a0KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com/en/investor-relations.
\n

\n\n\n\n\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag824": { "value": "\n

\n

\n\n
The following standards became effective on 1 January 2023:
\n
\u2022\u00a0\u00a0IFRS 17, with significant consequences for KBC (see Note 1.5).
\n
\u2022\u00a0\u00a0Amendments to IAS 1 Presentation of Financial Statements: the amended IAS 1 requires that companies provide information
\n
about material accounting policies rather than a list of their main accounting policies. The impact of these amendments
\n
was limited for KBC.
\n
\u2022\u00a0\u00a0Amendments to IAS 12 International Tax Reform \u2013 Pillar Two Model Rules: the amended IAS 12 provides companies with a
\n
temporary exception to the recognition and disclosure requirements for deferred tax assets/liabilities related to Pillar Two
\n
income taxes and introduces specific disclosure requirements for companies affected by this tax reform (see Note 3.11).
\n

\n\n\n\n\n
\u00a0
\n\n
The following IFRS standards were issued but not yet effective in 2023.\u00a0KBC will apply these standards when they become
\n
mandatory.
\n
\u2022\u00a0\u00a0The IASB has published several limited amendments to existing IFRSs and IFRICs. They will be applied when they become
\n
mandatory, but their impact is currently estimated to be negligible.
\n

\n\n\n\n\n
\u00a0
\n
The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n
\u00a0
\n
\u00a0
\n
As a bank-insurance group, KBC presents banking and insurance information in its financial statements on an integrated
\n
basis. Information relating specifically to our banking business and to our insurance business is provided separately in the
\n
respective annual reports of KBC Bank and KBC Insurance under \u2018Information on\u00a0KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com/en/investor-relations.
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag825": { "value": "\n
The following standards became effective on 1 January 2023:
\n
\u2022\u00a0\u00a0IFRS 17, with significant consequences for KBC (see Note 1.5).
\n
\u2022\u00a0\u00a0Amendments to IAS 1 Presentation of Financial Statements: the amended IAS 1 requires that companies provide information
\n
about material accounting policies rather than a list of their main accounting policies. The impact of these amendments
\n
was limited for KBC.
\n
\u2022\u00a0\u00a0Amendments to IAS 12 International Tax Reform \u2013 Pillar Two Model Rules: the amended IAS 12 provides companies with a
\n
temporary exception to the recognition and disclosure requirements for deferred tax assets/liabilities related to Pillar Two
\n
income taxes and introduces specific disclosure requirements for companies affected by this tax reform (see Note 3.11).
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag826": { "value": "\n
The following IFRS standards were issued but not yet effective in 2023.\u00a0KBC will apply these standards when they become
\n
mandatory.
\n
\u2022\u00a0\u00a0The IASB has published several limited amendments to existing IFRSs and IFRICs. They will be applied when they become
\n
mandatory, but their impact is currently estimated to be negligible.
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:ExplanationOfNotAppliedNewStandardsOrInterpretations", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag790": { "value": "bank-insurance group", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag791": { "value": "\n

\n

\n
Note 1.2: Summary of material accounting policies
\n
\u00a0
\n\n
General / Basic principle
\n
\u00a0
\n
The general accounting principles of KBC\u00a0Group NV (\u2018KBC\u2019) are based on the International Financial Reporting Standards
\n
(IFRS), as adopted by the European Union, and on the IFRS Framework. The financial statements of KBC are prepared based
\n
on the going concern assumption. KBC presents each material class of similar items separately.\u00a0Dissimilar items are presented
\n
separately unless they are\u00a0immaterial, and items are only offset\u00a0when explicitly required or permitted by the relevant IFRS.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n

\n\n

\n\n

\n\n

\n
Financial assets
\n
\u00a0
\n
KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
\n
continue to be accounted for in accordance with IAS 39.
\n
\u00a0
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n

\n

\n\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Business model assessment
\n
\u00a0
\n
The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
\n
the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
\n
reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
\n
\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
\n
management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
\n
matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
\n
the sale of the assets);
\n
\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
\n
risks are managed;
\n
\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
\n
managed or the contractual cashflows collected); and
\n
\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
\n
activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
\n
how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\n
\u00a0
\n\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n

\n

\n

\n\n
Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
\n
\u00a0
\n
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
\n
is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
\n
\u2022\u00a0\u00a0leverage features;
\n
\u2022\u00a0\u00a0prepayment and extension terms;
\n
\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n
\u00a0
\n\n
Reclassifications
\n
\u00a0
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
\n
model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
\n
its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
\n
of the reporting period immediately following the change.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n

\n

\n\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n

\n\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n

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\n

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\n

\n

\n

\n

\n\n

\n

\n\n

\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n\n
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\u00a0
\n
Cash comprises cash on hand and demand deposits, e.g., cheques, petty cash and cash balances at central and other
\n
banks.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n

\n
Financial liabilities
\n
\u00a0
\n
Financial instruments or their component parts are classified on initial recognition as\u00a0liabilities or as equity in accordance with
\n
the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments. A financial
\n
instrument is classified as a liability if:
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to deliver cash or another financial asset to the holder or to exchange another financial
\n
instrument with the holder under conditions that are potentially unfavourable to KBC; or
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\u00a0
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the\u00a0
\n
way set out under \u2018Equity\u2019.
\n
\u00a0
\n
Financial liabilities \u2013 recognition and derecognition
\n
\u00a0
\n
KBC recognises a financial liability when it becomes party to the contractual provisions of the relevant instrument. This is
\n
typically the date when the consideration in the form of cash or\u00a0some other financial asset is received. Upon initial recognition,
\n
the financial liability is recognised at fair value less transaction costs directly attributable to issuance of the instrument,\u00a0
\n
except for financial liabilities at fair value through profit or loss.
\n
\u00a0
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in\u00a0the contract is discharged or
\n
cancelled, or it expires. KBC can also derecognise the financial liability and recognise a new one where an exchange takes\u00a0
\n
place between KBC and the lenders of the financial liability, each with substantially different terms, or if there are substantial
\n
modifications to the terms of the existing\u00a0financial liabilities. In assessing whether terms differ, KBC compares the discounted
\n
present value of cashflows under the new terms, including any fees paid net of any fees received and discounted using the
\n
original effective interest rate, and the discounted present value of the remaining cashflows of the original financial liability.
\n
If the difference is 10% or more, KBC derecognises the original financial liability and recognises a new one. Where the
\n
exchange of debt instruments or\u00a0modification\u00a0of terms is accounted for\u00a0as an extinguishment, any costs or fees incurred\u00a0are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\u00a0
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\u00a0
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n

\n\n
\u2022 \u00a0Financial liabilities designated by the entity as liabilities at fair value through profit or loss upon initial recognition (FVO).
\n
Under IFRS 9, a financial liability or group of financial liabilities can be measured upon initial recognition at fair value,
\n
whereby fair value changes are recognised\u00a0in the income statement except for fair value\u00a0changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair\u00a0value designation is used by KBC for the following reasons:
\n
- \u00a0managed on an FV basis: KBC designates a financial\u00a0liability or a group of financial\u00a0liabilities at fair value where it is
\n
managed and its performance is evaluated on a fair value basis. It is used to account for (unbundled) deposit
\n
components (i.e. financial liabilities that do not include a discretionary participation feature);
\n
- \u00a0Accounting mismatch: the fair value option can be used when doing so eliminates or significantly reduces a
\n
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising
\n
gains and losses on them on different bases;
\n
- \u00a0Hybrid instruments: a financial instrument is regarded as hybrid when it contains one or more embedded derivatives
\n
that are not closely related to the host contract. The fair value option\u00a0can be used when it is not possible to separate
\n
the non-closely-related embedded derivative from the host contract, in which case the entire\u00a0hybrid instrument can be
\n
designated at fair value. This means that both the embedded derivative and the host contract are measured at fair
\n
value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which case
\n
both the host contract and the embedded derivative is measured at fair value.
\n
\u2022 Financial liabilities measured at amortised cost (AC). KBC classifies most of its financial liabilities\u00a0under this category,
\n
including those used to fund trading activities where no trading intent is present in\u00a0them (e.g., issued\u00a0bonds). These financial
\n
liabilities are initially measured at cost, which is the fair value of the consideration received including transaction costs.
\n
Subsequently, they are measured at amortised cost, which is\u00a0the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus\u00a0or minus the cumulative amortisation of any difference between that initial\u00a0
\n
amount and the maturity amount. The difference between the amount made available\u00a0and the nominal value is recorded
\n
on an accruals basis as an interest expense. Interest expenses accrued but not yet paid are recorded under accruals and
\n
deferrals.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Financial liabilities \u2013 own credit risk
\n
\u00a0
\n
For financial liabilities designated at fair value, IFRS 9 requires the financial liability to be measured at fair value upon initial
\n
recognition. Any changes in fair value are subsequently recognised in the income statement, except for changes in own credit
\n
risk, which are presented separately in OCI.
\n
Accordingly, movements in the fair\u00a0value of the liability are presented in different\u00a0places: changes in own credit risk are
\n
presented in OCI and all other fair value changes are presented in the income statement under \u2018Net result from financial
\n
instruments at fair value through profit or\u00a0loss\u2019. Amounts recognised in OCI relating\u00a0to own credit risk are not recycled to\u00a0the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is\u00a0prohibited, KBC
\n
does transfer the amounts in OCI to retained earnings within equity upon derecognition. The only situation in which
\n
presentation of own credit risk in OCI is not applied is where this would create an accounting mismatch in the income
\n
statement. This could arise if there is a close economic relationship between the\u00a0financial liability designated at fair value (for
\n
which the own credit risk is recognised in OCI), while all changes in fair value of the corresponding financial asset are
\n
measured and recognised at fair value through profit or loss. This is the case with unit-linked investment contracts, where
\n
changes in fair value of the liability position are fully offset by the asset position.
\n
\u00a0
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\u00a0
\n
A financial guarantee contract is one that requires KBC to make\u00a0specified payments to reimburse\u00a0holders for losses they incur\u00a0
\n
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
\n
instrument. A financial guarantee contract is initially recognised at fair value and is subsequently measured at the higher\u00a0of
\n
(a) the amount determined in accordance with the impairment provisions of IFRS 9 (see \u2018Financial assets \u2013 impairment\u2019) and
\n
(b) the amount initially recognised less,\u00a0when appropriate, cumulative amortisation recognised in accordance with the\u00a0
\n
revenue recognition principle of IFRS 15.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n

\n

\n\n
Reverse repos and repos
\n
\u00a0
\n
A reverse repo is a transaction in which KBC purchases a financial asset and simultaneously enters into an agreement to sell
\n
the asset (or a similar asset) at a fixed price on a future date; this agreement is accounted for as a loan\u00a0or advance, and the\u00a0
\n
underlying asset is not recognised in the financial statements.
\n
\u00a0
\n
In a repo transaction, KBC sells a security and simultaneously agrees to\u00a0repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues\u00a0to recognise the securities in their entirety because it retains substantially all of
\n
the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and the financial
\n
liability is recognised for the obligation to pay the repurchase price.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n
Offsetting
\n
\u00a0
\n
KBC offsets and presents only a net amount of a financial asset and financial liability in its balance sheet if and only if (i)\u00a0it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis\u00a0or
\n
to realise the asset and settle the liability simultaneously.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n
Fair value
\n
\u00a0
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or\u00a0paid to transfer a liability in an orderly
\n
transaction between market participants at the measurement date\u2019. Fair value is not the amount that an entity would\u00a0receive
\n
or pay in a forced transaction, involuntary liquidation or distress sale. An imbalance between supply and demand (e.g., fewer
\n
buyers than sellers, thereby forcing prices down) is not the\u00a0same as a forced transaction or distress sale.
\n
\u00a0
\n
Market value adjustments are recognised on all positions that are measured at fair value, with fair value changes being
\n
reported in the income statement or\u00a0in OCI. They relate to close-out costs, adjustments for\u00a0less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty\u00a0risk (credit value adjustment) and funding costs:
\n
\u2022\u00a0\u00a0Credit value adjustments (CVAs) are used when measuring derivatives to ensure that their market value is adjusted to
\n
reflect the credit risk of the counterparty. In making this adjustment, both the mark-to-market value of the contract and
\n
its expected future fair value are taken into account. These valuations are weighted based on the counterparty credit risk
\n
that is determined using a quoted credit default swap (CDS) spread, or, if there is no such spread, on the counterparty
\n
credit risk that is derived from bonds whose issuers are similar to the derivative counterparty in terms of rating, sector and
\n
geographical location. A debt value adjustment (DVA) is made for contracts where the counterparty is exposed to KBC. It
\n
is similar to a CVA, but the expected future negative fair value of\u00a0the contracts is taken into consideration.
\n
\u2022\u00a0\u00a0A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to\u00a0ensure
\n
that the (future) funding\u00a0costs or income\u00a0attached to entering into\u00a0and hedging\u00a0such instruments are factored in when
\n
measuring their value.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n

\n\n

\n\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Insurance contracts
\n
\u00a0
\n
General
\n
\u00a0
\n
KBC applies all the requirements of IFRS 17 as from 1 January 2023.
\n
\u00a0
\n
Scope
\n
\u00a0
\n
In order to qualify as an insurance contract, the associated insurance risk must be significant even if the insured event is
\n
extremely unlikely to occur, for example catastrophic events such as earthquakes.
\n
Whether insurance risk is significant is assessed on initial recognition of each individual contract on a present value basis.
\n
In general, the following types of contracts within KBC are in scope of IFRS 17: Non-life insurance contracts, reinsurance
\n
contracts (accepted & ceded), Life insurance contracts being the non-unit-linked contracts, the unit-linked contracts, the
\n
hybrid products and investment contracts with discretionary participating features if issued by a KBC insurance entity.
\n
In general, the following\u00a0types of contracts are out of scope of IFRS 17: investment contracts without discretionary
\n
participating features (IFRS 9), most unit-linked contracts of KBC Insurance Belgium (IFRS 9) as these insurance contracts do
\n
not contain significant insurance risk, credit cards including certain cover issued by a KBC bank entity (IFRS 15), and roadside
\n
assistance contracts (IFRS 15).
\n
Distinct non-insurance components are separated from the insurance components in\u00a0the contract and thus accounted for
\n
in accordance with the\u00a0appropriate IFRS.
\n
\u00a0
\n
Level of aggregation\u00a0
\n
\u00a0
\n
IFRS 17 calculations are performed at an aggregated level, rather than contract by contract, taking into account the following
\n
four dimensions:
\n
\u2022\u00a0\u00a0IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);\u00a0
\n
\u2022\u00a0\u00a0Annual cohort (year of inception of the\u00a0policy);
\n
\u2022\u00a0\u00a0Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022\u00a0\u00a0Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\u00a0
\n
Aggregation by IFRS 17 portfolio
\n
IFRS 17 portfolios are country-specific and driven by the local product mix (similar risks) and the way in which the local
\n
insurance business is managed\u00a0(managed together). As a minimum, the portfolios are broken down into:
\n
\u2022\u00a0\u00a0Life
\n
- \u00a0Unit-linked\u00a0
\n
- \u00a0Non-unit-linked
\n
- \u00a0Hybrid products
\n
\u2022\u00a0\u00a0Non-life insurance
\n
- \u00a0Personal insurance
\n
- \u00a0Liabilities \u2013 MTPL
\n
- \u00a0Liabilities \u2013 other than\u00a0MTPL
\n
- \u00a0Property (including other) other than fully comprehensive
\n
- \u00a0Fully comprehensive\u00a0
\n
- \u00a0Accepted reinsurance
\n
\u2022\u00a0\u00a0Ceded reinsurance
\n
\u00a0
\n
Aggregation by annual cohort
\n
KBC applies annual cohorts (a cohort is a time bucket of contracts issued in the same year), aligned with the start and end
\n
of the financial year of KBC. On 23 November 2021, the EU published a Regulation endorsing IFRS 17 Insurance Contracts,
\n
including the amendments to the original IFRS 17 and a solution for the annual cohort requirement for certain types of
\n
insurance contracts, for use in the European Union. KBC will not apply the European optional exemption from the annual
\n
cohort requirement.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\n

\n

\n\n\n
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\u00a0
\n
BBA and VFA \u2013 Expected profitability on initial recognition
\n
For contracts measured according to the Building Block Approach (BBA, see below) and the Variable Fee Approach (VFA, see
\n
below), the allocation to the onerous, profitable or doubtful group of contracts (GoC) is determined based on the presence
\n
of a Contractual Service Margin (CSM is the unearned profit in the group of contracts at inception) under different risk
\n
adjustment levels (i.e. compensation for uncertainty in the amount and timing of future cashflows):
\n
\u2022\u00a0\u00a0If CSM < 0 when risk adjustment is calculated at a 75% confidence level,\u00a0the onerous group of contracts
\n
\u2022\u00a0\u00a0If CSM > 0 when risk adjustment is calculated at a 75% confidence\u00a0level AND
\n
- \u00a0if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, the doubtful group of contracts
\n
- \u00a0if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, the profitable group of contracts
\n
\u00a0
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA),\u00a0facts and circumstances indicating that\u00a0the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio exceeding 100%. This ratio differs from the externally
\n
published combined ratio. The IFRS 17 expected economic combined ratio is calculated for a set of contracts on an annual
\n
basis. Consequently, the new business of a year is assigned to one specific group of contracts under IFRS 17. In exceptional
\n
cases, when qualitative information reveals facts and circumstances indicating a negative trend in the IFRS 17 expected
\n
economic ratio, a recalculation is performed during the financial year.
\n
\u00a0
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous\u00a0profitability expectation. A set of contracts (SoC) is
\n
defined such that the conclusion on the expected profitability of the SoC and the associated classification (i.e. profitable,
\n
doubtful or onerous) equals the conclusion that would have been reached if the expected\u00a0profitability assessment had been
\n
carried out at the level of\u00a0the individual contract.
\n
\u00a0
\n
Recognition \u2013 derecognition
\n
\u00a0
\n
KBC recognises a group of\u00a0insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of contracts;
\n
\u2022\u00a0\u00a0The date when the first payment from a policyholder in the group becomes due;
\n
\u2022\u00a0\u00a0For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from\u00a0the policyholder is deemed\u00a0to be due when it is received.
\n
As time progresses in the cohort, new business can be added to a group of contracts if it meets\u00a0the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of reinsurance contracts held;
\n
\u2022\u00a0\u00a0The date the entity recognises an onerous group of underlying insurance contracts, if the entity entered into the related
\n
ceded reinsurance contract in the group of reinsurance contracts held at or before that date.
\n
KBC delays the recognition of a group of\u00a0reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that\u00a0date is later than the beginning of\u00a0the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance\u00a0sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\u00a0
\n
Valuation
\n
\u00a0
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take\u00a0into account the insurance contract
\n
characteristics.
\n
\u2022\u00a0\u00a0The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022\u00a0\u00a0The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the\u00a0
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n

\n\n\n\n\n\n\n
\u2022\u00a0\u00a0The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder significantly depend on the return of the\u00a0invested assets. This is a mandatory measurement
\n
model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some hybrid products of Central
\n
European entities.
\n
Only one measurement model can\u00a0be applied to each IFRS 17 portfolio.
\n
\u00a0
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of\u00a0two
\n
components, namely a Liability for Remaining Coverage\u00a0(LRC) and a Liability for Incurred Claims (LIC).
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\n

\n\n
Measurement of Life insurance liabilities
\n
\n
The Life insurance liabilities are mostly valued according to either the BBA or the VFA model:
\n
\u2022 Valuation according to the BBA is applied to calculate the liability for non-unit-linked life insurance contracts and for some
\n
hybrid products.
\n
\u2022 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts and
\n
some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the invested
\n
assets.
\n
\n
Valuation according to the Building Block Approach (BBA)
\n
\n
The insurance liability consists of the following four blocks:
\n
\u2022 Actuarially estimated value of expected future cashflows;
\n
\u2022 Discounting to convert the estimation into a present value;
\n
\u2022 Risk adjustment as compensation for the uncertainty in the amount and timing of the expected future cashflows;
\n
\u2022 Contractual Service Margin (CSM), being the unearned profit that is released from the balance sheet in P&L over the term
\n
of the contract based on services provided, i.e. there are no day one gains.
\n
\n
Estimation of expected future cashflows
\n
\n
The basic principle is that Solvency II cashflows are used to ensure consistency with IFRS 17.
\n
The IFRS 17 estimation of future cashflows deviates from Solvency II on the following points:
\n
\u2022 Under Solvency II all expenses are included in the Best Estimate. Under IFRS 17 expenses are divided into directly
\n
attributable costs and non-directly attributable costs. Directly attributable costs are expenses directly related to insurance
\n
contracts. Only these directly attributable costs are included in the estimation of expected future cashflows.
\n
\u2022 Under Solvency II contracts where the insurer is at risk, tacit renewals and contracts where the coverage period starts in
\n
the future are within the Solvency II contract boundary. Under IFRS 17 cashflows are within the contract boundary if they
\n
arise from rights and obligations that exist during the reporting period
\n
- in which the entity can compel the policyholder to pay the premiums; or
\n
- in which the entity has a substantive obligation to provide services.
\n
Contracts under which the insurer provides cover, i.e. under which the insurer is at risk, are within the IFRS 17 contract
\n
boundaries. Tacit renewals for Non-life insurance contracts and contracts with a coverage period starting in the future are
\n
outside the IFRS 17 contract boundaries.
\n
Level of aggregation of projected cashflows: the Solvency II aggregation levels are Lines of Business (LoBs) and risk buckets.
\n
The IFRS 17 unit of account is based on portfolios, cohorts and expected profitability.
\n
\n
Discounting \u2013 time value of money
\n
\n
A discount rate is created per currency, in line with the currency of the cashflows. The starting point for the creation of the
\n
curves are observable market prices of a set of assets with multiple durations.
\n
The inflation assumptions for the nominal cashflows and the discount rates are consistent. Inflation is taken into account in
\n
the projection of the cashflows. Notwithstanding the reference to \u2018cashflows\u2019, the standard allows the same discount curve
\n
to be applied to all cashflows in the same contract. This simplification is applied at KBC.
\n
\n
For cashflows that vary with underlying items, the discount rate is determined by means of a top-down approach.
\n
Cashflows that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that
\n
are not fixed at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using
\n
a risk-free rate adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the current
\n
asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities. The
\n
risk-taking curve is adjusted to exclude the part not related to the insurance liabilities.
\n
Per currency, a last liquid point (LLP) is set at the level of KBC that is consistent for all entities. The last liquid points per currency
\n
are defined by taking the last available tenor for the risk-free rate in the relevant currency.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\n

\n\n
For long-term Life insurance contracts, the cashflows are modelled over a duration of 110 years. The Ultimate Forward Rate
\n
(UFR) is the rate of the 110-year tenor to which the discount curve must converge. This UFR is defined as the sum of an
\n
expected real rate and an expected inflation rate.
\n
\n
For cashflows that do not vary with underlying items, KBC chooses to apply the bottom-up approach. The bottom-up
\n
approach is determined by adding an illiquidity premium on top of a risk-free rate, so that the discount curve reflects the
\n
illiquidity characteristics of the insurance contract liabilities. This approach is used for Non-life liabilities for incurred claims.
\n
The illiquidity premium is the premium demanded by the policyholder because the insurance contract liabilities cannot be
\n
easily converted into cash at fair market value.
\n
\n
Risk adjustment of Life insurance liabilities
\n
\n
The risk adjustment for non-financial risk is the compensation that the entity requires for bearing the uncertainty about the
\n
amount and timing of cashflows that arises from non-financial risk. It is a buffer on top of the Best Estimate future cashflows
\n
which represents a 50% probability of being able to fulfil future obligations and thus a 50% probability of not being able to
\n
meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters.
\n
The risk adjustment is defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows
\n
as part of the fulfilment cashflows. The VaR is calculated at a 75% confidence level.
\n
Non-financial risks included in the VaR model are mortality risk, longevity risk, morbidity/disability risk, lapse risk, expense risk
\n
and revision risk. The correlations between the different risk types are in line with the correlation matrix of Solvency II.
\n
\n
Contractual service margin
\n
\n
The contractual service margin (CSM) represents the unearned profit the insurer will recognise in P&L as services are provided
\n
under the insurance contracts. The CSM is recognised in the balance sheet as part of the insurance liability on initial
\n
recognition in order to avoid a day one gain. The CSM on the balance sheet is released gradually over time, on the basis of
\n
services provided in the period, and should be zero at the end of the coverage period for a group of contracts.
\n
The CSM release pattern is based on coverage units in the GoC. The number of coverage units is the quantity of services
\n
provided by the insurer under the contracts in that GoC, determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period. The CSM amount recognised in
\n
P&L is the amount of coverage units allocated to the current period for the insurance coverage provided in the current period.
\n
The number of coverage units is reassessed at the end of each reporting period to reflect the most up-to-date assumptions
\n
of the contract.
\n
KBC has opted to reflect the time value of money on coverage units. By discounting the coverage units, a more stable
\n
allocation of the CSM to P&L is achieved.
\n
For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following into consideration:
\n
\u2022 Coverage units are determined based on the individual benefit components separately;
\n
\u2022 Weights are assigned to each component to reflect an appropriate level of service to be provided.
\n
Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided for each service.
\n
Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
Coverage units cannot be negative. They have a positive sign and are floored to zero. In case of zero coverage units in a
\n
given period, no CSM is allocated to P&L as no services have been provided in the period. This is possible in some cases, for
\n
instance where contracts provide for \u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but
\n
there is a mandatory waiting period for the client to be able to benefit from insurance coverage.
\n
\n
Valuation according to the Variable Fee Approach (VFA)
\n
\n
Under the VFA, the CSM mainly reflects the fee that KBC expects to earn on the market value of the Assets under
\n
Management (AUM), also referred to as \u2018underlying items\u2019.
\n
The CSM is determined as the net of the fair value of the underlying items and the total entity obligation to the policyholder.
\n
The change in the variable fee that impacts the CSM is determined as the net of:
\n
\u2022 the change in the fair value of the underlying items; and
\n
\u2022 the change in the total entity obligation to the policyholder.
\n
KBC applies the simplification of a combined amount rather than the different CSM unlocking adjustments separately.
\n
Under the VFA, the difference in measurement from BBA lies in the subsequent measurement of direct participating contracts.
\n
All changes in fulfilment cashflows are absorbed by the CSM, until the CSM becomes negative and a loss is recognised in P&L.
\n
\n
In Belgium, the insurance company has discretion over the amount of profit sharing allocated to policyholders. The
\n
policyholder does not have an \u2018enforceable right\u2019 to participate in the returns of the insurance company, which means that
\n
the VFA eligibility criteria are not fulfilled and the BBA is applied.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\n

\n\n
Measurement of Non-life insurance liabilities
\n
\n
Valuation according to the PAA is applied for the liability for most Non-life products. The PAA Liability for Remaining Coverage
\n
(LRC) reflects the premium receipts and the acquisition cashflows adjusted for amounts recognised in the income statement
\n
on a pro rata temporis basis. When an insured claim arises, a Liability for Incurred Claims (LIC) is recognised, which is similar
\n
to the BBA LIC (see below).
\n
In the case of onerous contracts, an additional liability to cover expected future losses is added to the LRC on the balance
\n
sheet and a loss is recognised immediately in P&L.
\n
\n
Valuation according to the Premium Allocation Approach
\n
\n
The PAA LRC reflects only premiums received and acquisition cashflows. As such, to appropriately present the insurance
\n
liability on a cash basis, an adjustment is performed by netting insurance payables and receivables against the LRC value.
\n
Under the PAA, KBC will not make use of the option to expense acquisition costs when incurred.
\n
At the end of each reporting period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and
\n
some of the premium receipts are earned (i.e. recorded as insurance revenues). Both components of the LRC are allocated
\n
to P&L on the basis of passage of time or the expected timing of incurred claims and benefits, if that pattern better reflects
\n
the release from risk.
\n
\n
Measurement of the Liability for Incurred Claims (LIC) for claims outstanding
\n
\n
The Liability for Incurred Claims is measured separately. A discounted best estimate of future cash outflows subject to a risk
\n
adjustment as a safety margin is provisioned on the balance sheet. No CSM is included in the LIC as there is no future
\n
coverage in scope of the liabilities for incurred claims, i.e. it contains fulfilment cashflows related to past service.
\n
A provision for the internal cost of settling claims is included, which is calculated as a percentage based on past experience.
\n
The risk adjustment for Non-life insurance liabilities is only calculated for claims incurred. Consequently, only reserve risk is
\n
taken into account. Comparable with Life insurance liabilities, a Value at Risk method (VaR) is used, but here it is calculated
\n
at a 90% confidence level.
\n
\n
Subsequent measurement
\n
\n
BBA/VFA \u2013 Liability for Remaining Coverage
\n
\n
At the end of each reporting period, subsequent to initial recognition, KBC updates its estimates and assumptions to reflect
\n
the most up-to-date situation. As a result of these updates, the carrying amount of fulfilment cashflows will vary from one
\n
period to another.
\n
Subsequent measurement under BBA/VFA for the LRC is driven by:
\n
\u2022 experience adjustments (either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result (i.e.
\n
related to current or past service)) and portfolio rollforward;
\n
\u2022 non-economic parameter updates to the fulfilment cashflows;
\n
\u2022 economic parameter updates to the fulfilment cashflows;
\n
\u2022 CSM release.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n

\n

\n\n\n

\n
PAA \u2013 Liability for Remaining Coverage
\n
\n
Under the PAA, the LRC is unwound on a pro rata temporis basis to obtain the so-called \u2018earned premiums\u2019, i.e. the premium
\n
reserve and the deferred acquisition commission reserve. At the end of each reporting period, acquisition cashflows are
\n
amortised (i.e. recorded as an insurance service expense) and some of the premium receipts are earned (i.e. recorded as
\n
insurance revenues). Both components of the LRC are allocated to P&L on the basis of passage of time or the expected
\n
timing of incurred claims and benefits, if that pattern better reflects the release from risk.
\n
\n
BBA/VFA/PAA \u2013 Liability for Incurred Claims
\n
\n
Any changes to the Liability for Incurred Claims are recorded in the income statement. Depending on the driver of such
\n
changes, they are either recorded in:
\n
\u2022 Insurance service expenses
\n
- Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim payments, changes in the
\n
statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 Insurance finance income and expense
\n
- Main drivers: a change in the discount rate, interest from deposits at the ceding company.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
Other matters
\n
\n
KBC has opted for a year-to-date approach, i.e. a recalculation of previously reported quarters, with the impact of the
\n
recalculation being included in the current period.
\n
KBC chooses to disaggregate insurance finance income and expense between P&L and OCI. This means recognising in P&L
\n
the interest expense on the insurance liability over the reporting period, with this interest expense being calculated using the
\n
locked-in rate (i.e. the rate curve applicable at the inception of the IFRS 17 contract) and recognising in OCI the impact of
\n
changes in the market interest rate over the reporting period.
\n
The liability position of insurance contracts and the asset position of reinsurance contracts is presented in the balance sheet
\n
on a received basis. Ceded reinsurance contracts (i.e. reinsurance contracts held) are required to be accounted for and
\n
presented separately from the underlying contracts to which they relate.
\n
Upon the acquisition of another insurance company or a portfolio transfer, the consideration received or paid partly consists
\n
of the Value of Business In-force (VBI). Insurance contracts acquired in a business combination are measured in the same
\n
way as insurance contracts issued by the entity except that the fulfilment cashflows are recognised at the acquisition date.
\n
\n\n
\n\n
Leasing
\n
\n
All leases are required to be classified as either finance leases or operating leases. The classification under IFRS 16 is based
\n
on the extent to which risk and rewards incidental to ownership of leased assets lie with the lessor or the lessee. A finance
\n
lease transfers substantially all the risks and rewards incidental to ownership of an asset.
\n
This classification is crucial for positions as a lessor, but less important for positions as a lessee, since both classifications
\n
result in similar recognition and measurement of the lease on the balance sheet and in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n

\n
Equity
\n
\n
Equity represents the residual interest in KBC\u2019s total assets after deduction of all its liabilities (referred to as \u2018net assets\u2019) and
\n
encompasses all shares issued by KBC, reserves attributable to the holders of the shares and minority interests.
\n
\n
KBC classifies all issued financial instruments as equity or as a financial liability based on the substance of the contractual
\n
arrangements. The critical feature that distinguishes a financial liability from a share is whether KBC has an unconditional
\n
right to avoid delivering cash or another financial asset to settle a contractual obligation.
\n
Minority interests represent the equity in a subsidiary that is not attributable to the holders of KBC shares. When the
\n
proportion of the equity held by the minority interests changes, KBC adjusts the carrying value of the controlling and minority
\n
interests to reflect changes in their relative interests in the consolidated companies. KBC recognises in equity any difference
\n
between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received,
\n
and allocates it to its controlling stake.
\n
\n\n
KBC can buy back its own shares within the legal framework. These treasury shares (ordinary shares) are initially recognised
\n
on the balance sheet on the transaction date under the \u2018treasury shares\u2019 heading. The acquisition price (including transaction
\n
costs) is deducted from equity. The dividend income from \u2018treasury shares\u2019 is recognised in equity.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n

\n\n

\n

\n
Employee benefits
\n
\n\n

\n\n
Short-term employee benefits
\n
\n
Short-term employee benefits, such as salaries, paid absences, performance-related cash awards and social security
\n
contributions, are recognised over the period in which the employees provide the corresponding services. The related
\n
expenses are presented in the income statement as \u2018Operating expenses\u2019 under the \u2018Staff expenses\u2019 heading.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
Post-employment benefits
\n
\n
KBC offers its employees pension schemes in the form of defined contribution or defined benefit plans. Under the defined
\n
contribution plans, KBC\u2019s statutory or constructive obligation is limited to the amount that it agrees to contribute to the fund.
\n
The amount of the post-employment benefit to be received by the employee is determined by the amount of the
\n
contributions paid by KBC and the employee into the post-employment benefit plan, as well as by the investment returns
\n
arising from those contributions. The actuarial risk is borne by the employee.
\n
Conversely, under the defined benefit plans, KBC\u2019s obligation is to provide the agreed benefits to current and former
\n
employees and, in substance, the actuarial risk and investment risk fall on KBC. This means that if, from an actuarial or
\n
investment viewpoint, things turn out worse than expected, KBC\u2019s obligation may be increased.
\n
In Belgium, defined contribution plans have a legally guaranteed minimum return and the actual return can be lower than
\n
the legally required return. In addition, these plans have defined benefit plan features and KBC treats them as defined benefit
\n
plans.
\n
Liabilities under the defined benefit plans and the Belgian defined contribution plans (or pension liabilities) are included under
\n
\u2018Other liabilities\u2019 and relate to the obligations for retirement and survivor\u2019s pensions, early retirement benefits and similar
\n
pensions and annuities.
\n
The pension obligations for employees under the defined benefit plans are calculated using the projected-unit-credit
\n
method, with each period of service granting additional entitlement to pension benefits.
\n
Actuarial valuations are performed every reporting period. The defined benefit liabilities are discounted using rates
\n
equivalent to the yields on high-quality corporate bonds that are denominated in the currency in which the benefits will be
\n
paid and that have a maturity similar to the related pension liabilities.
\n\n
Changes in the net defined benefit liability/asset, apart from cash movements, are grouped into three main categories and
\n
recognised in operating expenses (service costs), interest expenses (net interest costs) and other comprehensive income
\n
(remeasurements).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n
Net fee and commission income
\n
\n
Most net fee and commission income falls under the scope of IFRS 15 (Revenue from Contracts with Customers), as it relates
\n
to the services that KBC provides to its clients and is outside the scope of other IFRS standards. For the recognition of revenue,
\n
KBC identifies the contract and defines the promises (performance obligations) in the transaction. Revenue is recognised only
\n
when KBC has satisfied the performance obligation.
\n
The revenue presented under \u2018Securities and asset management\u2019 falls under the scope of IFRS 15 and, in principle, entails
\n
KBC keeping assets in a trust for the beneficiary (\u2018fund\u2019) and being responsible for investing the amounts received from clients
\n
to their benefit. These transactions are straightforward, because KBC provides a series of distinct services which clients use
\n
at the same time when receiving the benefits. In return, KBC receives a monthly or quarterly management fee, which is
\n
calculated as a fixed percentage of the net asset value, or a subscription fee retained from the beneficiary. The fees do not
\n
include a variable component.
\n
Revenue reported as \u2018Margin on life insurance investment contracts without DPF\u2019 represents the amount realised on
\n
investment contracts without a discretionary participation feature, i.e. a fixed percentage or fixed amount is withheld from
\n
the client\u2019s payments, enabling the insurance company to cover its expenses.
\n
Payment services, where KBC charges clients for certain current-account transactions, domestic or foreign payments,
\n
payment services provided through ATMs, etc., are usually settled when the actual transaction is carried out, enabling the
\n
relevant fee to be recognised directly at that time.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n\n

\n\n
Levies
\n
\n
Public authorities can impose various levies on KBC. The size of the levies can depend on the amount of revenue (mainly
\n
interest income) generated by KBC, the amount of deposits accepted from clients, and the total balance sheet volume,
\n
including corrections based on certain, specific ratios. In accordance with IFRIC 21, levies are recognised when the obligating
\n
event that gives rise to recognition of the liability has occurred as stated in the relevant legislation. Depending on the
\n
obligating event, levies can be recognised at a single point in time or over time. Most of the levies imposed on KBC have to
\n
be recognised at a single point in time, which is mainly the beginning of the financial year. KBC recognises levies under
\n
\u2018Operating expenses\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n
Income tax
\n
\n
Income tax consists of three items, namely taxes paid/payable over the reporting period, underprovisioning/overprovisioning
\n
in previous years, and changes in deferred tax assets/deferred tax liabilities. It is accounted for either in the income
\n
statement or in other comprehensive income, depending on where the items that triggered the tax are recorded. Income
\n
taxes that are initially accounted for in other comprehensive income and that relate to gains or losses that are subsequently
\n
recognised in the income statement are recycled to the income statement in the same period in which that item is accounted
\n
for in the income statement.
\n
\n
Deferred and current tax assets and liabilities are offset when there is both a legal right of offset and the intention to settle
\n
on a net basis or to realise the asset and settle the liability simultaneously.
\n
\n
Current tax assets/liabilities
\n
\n
Current tax for the period is measured at the amount expected to be paid to or recovered from the tax authorities, using the
\n
rates of tax in effect during the reporting period.
\n
\n\n
Deferred tax assets/liabilities
\n
\n
Deferred tax liabilities are recognised for all taxable temporary differences between the carrying value of an asset or liability
\n
and its tax base. They are measured using the tax rates that are substantively enacted at the reporting date and expected
\n
to be in effect on realisation of the assets or settlement of the liabilities to which they relate and that reflect the tax
\n
consequences following from the manner in which the entity expects to recover or settle the carrying value of the underlying
\n
asset or liability at the balance sheet date.
\n
Deferred tax assets are recognised for all deductible temporary differences between the carrying value of assets and
\n
liabilities and their tax base, as well as for the carry forward of unused tax losses and unused tax credits, to the extent that
\n
it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. KBC
\n
calculates deferred tax assets to carry forward unused tax losses. When estimating the period over which tax losses can be
\n
set off against future taxable profits, KBC uses projections for a period of eight to ten years.
\n
Deferred tax assets/liabilities that relate to business combinations are recorded directly in goodwill.
\n
Deferred tax assets/liabilities are not discounted.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n

\n\n
Property and equipment
\n
\n
Property and equipment are recognised initially at cost (including directly allocable acquisition costs). KBC subsequently
\n
measures property and equipment at the initial cost less accumulated depreciation and impairment. The rates of
\n
depreciation are determined on the basis of the estimated useful life of the assets and are applied according to the straight-
\n
line method from the moment the assets are available for use. Property and equipment are derecognised upon disposal or
\n
when the relevant asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.
\n
Gains or losses upon derecognition are recognised in the income statement in the period in which derecognition occurs.
\n
Property and equipment are subject to impairment testing when there is an indication that the asset might have been
\n
impaired.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n\n

\n\n

\n\n
Depreciation charges, impairment losses and gains or losses on disposal are recognised under \u2018Operating expenses\u2019 in the
\n
income statement, with the exception of assets that are leased under operating leases (KBC as a lessor), for which the costs
\n
are recognised in \u2018Other net income\u2019. Where a disposal falls within the definition of a discontinued operation, the net results
\n
are reported in a single line in the income statement (see \u2018Discontinued operations\u2019 below).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n
Investment property
\n
\n
Investment property is defined as a property built, purchased or acquired by KBC under a finance lease and is held to earn
\n
rentals or for the purpose of capital appreciation rather than being used by KBC for the provision of services or for
\n
administrative purposes.
\n
Investment property is initially recognised at cost (including directly attributable costs). KBC subsequently measures it at the
\n
initial cost less accumulated depreciation and impairment.
\n
The depreciation charge is recognised under \u2018Other net income\u2019 in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n

\n\n

\n\n

\n\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n

\n\n
Impairment of non-financial assets
\n
\n
When KBC prepares financial statements, it ensures that the carrying value of the non-financial asset does not exceed the
\n
amount that could be obtained from either using or selling it (\u2018recoverable amount\u2019). Property and equipment, investment
\n
property and software are subject to the impairment review only when there is objective evidence of impairment. Goodwill
\n
and intangible assets with an indefinite useful life are subject to impairment reviews at least annually and also reviewed for
\n
impairment indicators every quarter.
\n
Indications that an impairment loss is required may stem from either an internal source (e.g., the condition of the asset) or an
\n
external source (e.g., new technology or a significant decline in the asset\u2019s market value).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n\n

\n\n

\n\n
When an impairment indicator is present, KBC reviews the asset\u2019s recoverable amount and the asset is impaired if its
\n
recoverable amount is lower than its carrying value at the reporting date. The recoverable amount is defined as the higher
\n
of the value in use and the fair value less cost to sell.
\n
Value in use is defined as the discounted future cashflows expected to be derived from an asset or a cash-generating unit.
\n
Impairment is borne at individual asset level, but when the individual asset does not generate cash inflows that are largely
\n
independent of those from other assets or groups of assets, the recoverable amount is determined for the so-called \u2018cash-
\n
generating unit\u2019 (CGU) to which the asset or group of assets belongs. In forming the CGUs, KBC applies its own judgement to
\n
define the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows
\n
from other assets or groups of assets. This process mainly applies to goodwill that has been recognised in relation to
\n
acquisitions.
\n
Impairment losses are recognised in the income statement for the period in which they occur. An impairment loss can be
\n
reversed if the condition that triggered it is no longer present, except for goodwill, which can never be reversed. Impairment
\n
gains are recognised in the income statement for the period in which they occur.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n
Provisions, contingent liabilities and contingent assets
\n
\n
Provisions are recognised on the reporting date if and only if the following criteria are met:
\n
\u2022 There is a present obligation (legal or constructive) due to a past event;
\n
\u2022 It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
\n
\u2022 A reliable estimate can be made of the amount of the obligation.
\n
\n
The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the balance
\n
sheet date. When the effect of time is material, the amount recognised as a provision is the net present value of the best
\n
estimate.
\n
Due to its inherent nature, a provision requires management judgement regarding the amount and timing of probable future
\n
economic outflows.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n
Consolidated financial statements / interim financial statements
\n
\n
All material entities (including structured entities) over which KBC exercises direct or indirect control as defined in IFRS 10 are
\n
consolidated according to the method of full consolidation. Changes in ownership interests (that do not result in a loss of
\n
control) are accounted for as equity transactions. They do not affect goodwill or profit or loss.
\n
\n
Subsidiaries that are not included in the consolidated financial statements because of immateriality are classified as equity
\n
instruments at fair value through other comprehensive income, with all fair value changes being reported in other
\n
comprehensive income, except for dividend income, which is recognised in the income statement. Material companies over
\n
which joint control is directly or indirectly exercised and material investments in associates (companies over which KBC has
\n
significant influence) are all accounted for using the equity method.
\n
\n
Consolidation threshold: subsidiaries are effectively included in the consolidated financial statements using the full
\n
consolidation method if at least two of the following materiality criteria are exceeded:
\n
\u2022 Group share in equity is 2 500 000 euros;
\n
\u2022 Group share in the result is 1 000 000 euros (absolute value);
\n
\u2022 Group share in the balance sheet total is 100 000 000 euros.
\n
In order to prevent too many entities from being excluded, KBC checks that the combined balance sheet total of the entities
\n
excluded from consolidation does not amount to more than 1% of the consolidated balance sheet total.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n
Business combinations and goodwill
\n
\n\n

\n\n
Business combinations are accounted for using the acquisition method. Under this method, the cost of an acquisition is
\n
measured as the aggregate of the consideration transferred (measured at acquisition-date fair value) and the amount of
\n
any minority interests in the acquired entity. For measurement of the minority interests, KBC can decide for each business
\n
combination separately whether to measure the minority interest at fair value or as its proportionate share of the acquired
\n
entity\u2019s net identifiable assets. The way the minority interest is measured on the acquisition date will have an impact on
\n
purchase accounting as a result of the determination of goodwill.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n\n

\n\n
Goodwill is the excess of the cost of the acquisition over the acquirer\u2019s interest in the fair value of the identifiable assets
\n
acquired and liabilities and contingent liabilities assumed at the date of acquisition. In order to complete the acquisition
\n
accounting and determine the goodwill item, KBC applies a measurement period of 12 months. The classification of the
\n
financial assets acquired and financial liabilities assumed in the business combination is based on the facts and
\n
circumstances existing at the acquisition date (except for lease and insurance contracts, which are classified on the basis of
\n
the contractual terms and other factors at the inception of the relevant contract).
\n
Goodwill is presented under \u2018Goodwill and other intangible assets\u2019 and is carried at cost less impairment losses. Goodwill is
\n
not amortised, but is tested for impairment at least once a year or when there is objective evidence (external or internal) that
\n
it should be impaired. If the acquisition accounting is not complete because the 12-month measurement period has not
\n
elapsed, the goodwill is not considered as final and is only tested if there is objective evidence that the provisional goodwill
\n
is impaired.
\n
For the purpose of testing goodwill for impairment, it is allocated to each of KBC\u2019s cash-generating units that are expected
\n
to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquired entity are
\n
assigned to those units. An impairment loss is recognised if the carrying value of the cash-generating unit to which the
\n
goodwill belongs exceeds its recoverable amount. Impairment losses on goodwill cannot be reversed.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n\n
Effects of changes in foreign exchange rates
\n
\n
KBC\u2019s functional and presentation currency is the euro. Monetary assets and liabilities denominated in foreign currency are
\n
translated into the functional currency at the spot rate on the balance sheet date. Negative and positive valuation
\n
differences, except for those relating to the funding of equity instruments and investments of consolidated companies in a
\n
foreign currency, are recognised in the income statement. Non-monetary items measured at historical cost are translated
\n
into the functional currency at the historical exchange rate that existed on the transaction date. Non-monetary items carried
\n
at fair value are translated at the spot rate on the date the fair value was determined. Translation differences are reported
\n
together with changes in fair value. Income and expense items in foreign currency are taken to the income statement at the
\n
exchange rate prevailing when they were recognised.
\n
\n
Valuation differences are accounted for either in the income statement or in other comprehensive income. Valuation
\n
differences that are initially accounted for in other comprehensive income and that relate to gains or losses that are
\n
subsequently recognised in the income statement are recycled to the income statement in the same period in which that
\n
item is accounted for in the income statement. The balance sheets of foreign subsidiaries are translated into the presentation
\n
currency at the spot rate on the reporting date (except for equity, which is translated at the historical rate). The income
\n
statement is translated at the average rate for the financial year as a best estimate of the exchange rate on the transaction
\n
date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n
Related-party transactions
\n
\n
A party related to KBC is either a party over which KBC has control or significant influence or a party that has control or
\n
significant influence over KBC. KBC defines its related parties as:
\n
\u2022 KBC subsidiaries, KBC associates and joint ventures, KBC Ancora, Cera and MRBB;
\n
\u2022 KBC key management staff (i.e. the Board of Directors and the Executive Committee of KBC Group NV).
\n
\n
Transactions with related parties must occur at arm\u2019s length.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n

\n
Non-current assets held for sale and disposal groups, liabilities associated with disposal groups and discontinued operations
\n
\n\n
Non-current assets held for sale and disposal groups, liabilities associated with disposal groups
\n
\n
Non-current assets or groups of assets and liabilities held for sale are those where the carrying value will be recovered by
\n
KBC through a sale transaction, which is expected to qualify as a sale within a year, rather than through continued use. Non-
\n
current assets and liabilities held for sale are reported separately from the other assets and liabilities in the balance sheet at
\n
the end of the reporting date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n\n

\n\n
Discontinued operations
\n
\n
A discontinued operation refers to a part of KBC that has been disposed of or is classified as held for sale and:
\n
\u2022 represents a separate major line of business or geographical area of operations; or
\n
\u2022 is part of a single, coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\n
\u2022 is a subsidiary acquired exclusively with a view to resale.
\n
\n
Results from discontinued operations are recognised separately in the income statement and in other comprehensive income
\n
and contain:
\n
\u2022 the post-tax profit or loss of discontinued operations; and
\n
\u2022 the post-tax gain or loss recognised on the measurement to fair value less the costs of the sale or disposal of the assets
\n
or group of assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n
Events after the reporting period
\n
\n
Events after the reporting date are defined as favourable or unfavourable events that occur between the reporting date and
\n
the date on which the financial statements are authorised for issue. There are two types of event after the reporting date:
\n
\u2022 Those which provide evidence of conditions that existed on the reporting date (adjusting events);
\n
\u2022 Those that are indicative of conditions that arose after the reporting date (non-adjusting events).
\n
\n
The impact of adjusting events has already been reflected in the financial position and financial performance for the current
\n
year. The impact and consequences of non-adjusting events are disclosed in the notes to the financial statements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n
Main exchange rates used*
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Exchange rate at 31-12-2023 Exchange rate average in 2023
Change relative to Change relative to
31-12-2022 average in 2022
1 EUR = \u2026 (positive: appreciation relative to EUR) 1 EUR = \u2026 (positive: appreciation relative to EUR)
\u2026 currency (negative: depreciation relative to EUR) \u2026 currency (negative: depreciation relative to EUR)
CZK 24.724 -2% 23.946 +3%
HUF 382.80 +5% 381.33 +3%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
* Rounded figures.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n
Note 2.1: Segment reporting based on the management structure
\n
\n
Detailed information on the group\u2019s management structure and the results per segment can be found in the \u2018Our business
\n
units\u2019 section (which has not been audited by the statutory auditor). Based on IFRS 8, KBC has identified the Executive
\n
Committee and Board of Directors as \u2018chief operating decision-makers\u2019, responsible for allocating the resources and
\n
assessing the performance of the different parts of the company. The operating segments are based on the internal financial
\n
reporting to those policy bodies and on the location of the company\u2019s activities, resulting in geographical segmentation.
\n
\n
The three operating segments are (essentially):
\n
\u2022 the Belgium Business Unit (all activities in Belgium);
\n
\u2022 the Czech Republic Business Unit (all activities in the Czech Republic);
\n
\u2022 the International Markets Business Unit (activities in Hungary, Slovakia and Bulgaria, reported together in accordance with
\n
IFRS 8.16).
\n
For reporting purposes, there is also a Group Centre (comprising the results of the holding company, items that have not
\n
been allocated to the other business units, and the results of companies to be divested \u2013 including KBC Bank Ireland, where
\n
the sale of the loan and deposit portfolios was finalised in February 2023).
\n
\n
\n
Segment reporting
\n
\n
\u2022 The policy bodies analyse the performance of the segments based on a number of criteria, with the \u2018Result after tax\u2019 being
\n
the most important results indicator. The segment data is based entirely on IFRS data (with no adjustments).
\n
\u2022 In principle, we assign a group company in its entirety to one specific segment/business unit. Exceptions are only made for
\n
those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of loans
\n
(such items are recognised under Group Centre).
\n
\u2022 We allocate the funding cost of participating interests to the Group Centre. Any funding cost in respect of leveraging at
\n
KBC Group NV level is also recognised under Group Centre.
\n
\u2022 Transactions among the different segments are reported at arm\u2019s length.
\n\n

\n\n

\n\n
\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 We do not provide any information on income from sales to external clients per group of products or services, since the
\n
information is prepared at consolidated level chiefly for each business unit, and not per client group or product group.
\n
\u2022 For information on the acquisition of Raiffeisenbank Bulgaria in 2022 and the sale of KBC Bank Ireland\u2019s loan and deposit
\n
portfolios in 2022 and 2023, see Note 6.6.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag792": { "value": "\n
General / Basic principle
\n
\u00a0
\n
The general accounting principles of KBC\u00a0Group NV (\u2018KBC\u2019) are based on the International Financial Reporting Standards
\n
(IFRS), as adopted by the European Union, and on the IFRS Framework. The financial statements of KBC are prepared based
\n
on the going concern assumption. KBC presents each material class of similar items separately.\u00a0Dissimilar items are presented
\n
separately unless they are\u00a0immaterial, and items are only offset\u00a0when explicitly required or permitted by the relevant IFRS.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag822": { "value": "The financial statements of KBC are prepared based on the going concern assumption. KBC presents each material class of similar items separately.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag793": { "value": "\n

\n\n

\n\n

\n\n

\n\n

\n
Financial assets
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\u00a0
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KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
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continue to be accounted for in accordance with IAS 39.
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Financial assets \u2013 recognition and derecognition
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\u00a0
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Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
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provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
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accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
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value plus transaction costs directly\u00a0attributable to their acquisition.
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\u00a0
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Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
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or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
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all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
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KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
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the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
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transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
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the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
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that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
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\u00a0
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Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
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uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
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manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
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settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
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directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
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impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
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subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
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or part of the debt outstanding to the client.
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\u00a0
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Classification of debt instruments and equity instruments
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\u00a0
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On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
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an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
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in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
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obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
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conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
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instruments are classified as debt instruments by KBC, with the exception of derivatives.
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Classification and measurement \u2013 debt instruments
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\u00a0
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If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
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following categories:
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\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
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- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
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(HFT);
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- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
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\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
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\u2022\u00a0\u00a0Measured at amortised cost (AC).
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\u00a0
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Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
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objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
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by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
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but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
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and interest on the principal amount outstanding.\u00a0
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\u00a0
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Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
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the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
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accounting mismatch that would otherwise arise.
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\u00a0
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A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
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at FVO:
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\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
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financial assets;
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\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
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and interest on the principal amount outstanding.
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\u00a0
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A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
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at FVO:
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\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
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\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
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and interest on the principal amount outstanding.
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Business model assessment
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\u00a0
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The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
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the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
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reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
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\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
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management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
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matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
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the sale of the assets);
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\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
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\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
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risks are managed;
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\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
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managed or the contractual cashflows collected); and
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\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
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activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
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how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
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\u00a0
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Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
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because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
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selling financial assets.
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Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
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\u00a0
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For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
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is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
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outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
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costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
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considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
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term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
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In making the assessment, KBC considers:
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\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
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\u2022\u00a0\u00a0leverage features;
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\u2022\u00a0\u00a0prepayment and extension terms;
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\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
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\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
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Reclassifications
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\u00a0
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Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
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model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
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its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
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of the reporting period immediately following the change.
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Classification and measurement \u2013 equity instruments
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\u00a0
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Financial equity instruments are classified in one of\u00a0the following categories:
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\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
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\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
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There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
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contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
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FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
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interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
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value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
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even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
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statement under \u2018Dividend income\u2019.\u00a0
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Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
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\u00a0
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KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
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as assets or liabilities depending on their current market value.\u00a0
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Trading derivatives
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Derivatives are always measured at fair value and KBC draws distinctions as follows:
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\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
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hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
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applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
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all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
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\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
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intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
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term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
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under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
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\u00a0
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Hedging derivatives
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Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
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such derivatives is detailed in \u2018Hedge accounting\u2019.
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Financial assets \u2013 impairment
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\u00a0
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Definition of default
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\u00a0
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KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
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with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
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following conditions is fulfilled:
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\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
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\u2022\u00a0\u00a0The asset is flagged as non-accrual;
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\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
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when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
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years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
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within the two-year period);
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\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
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\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
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\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
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\u00a0
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KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
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control to ensure that all the assets that should have been designated as defaulted are properly identified.
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Expected credit loss model (ECL model)\u00a0\u2013 general
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The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
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\u00a0
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The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
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assets:
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\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
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\u2022\u00a0\u00a0Loan commitments and financial guarantees;
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\u2022\u00a0\u00a0Finance lease receivables;
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\u2022\u00a0\u00a0Trade and other receivables.
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No ECLs are calculated for investments in equity instruments.
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\u00a0
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Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
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increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
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information on the significant\u00a0increase in\u00a0credit risk).
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\u00a0
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To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
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1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
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Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
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month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
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\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
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For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
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equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
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Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
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Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
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carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
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value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
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between the income statement and OCI.
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Significant increase in credit risk since initial recognition
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\u00a0
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In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
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recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
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The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
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upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
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Multi-tier approach (MTA) \u2013 bond portfolio
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\u00a0
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For the bond portfolio, the MTA consists of three tiers:
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\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
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\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
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\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
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of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
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reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
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\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
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at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
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captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
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macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
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secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
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\u00a0
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If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
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3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
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3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
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date.
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Loan portfolio
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\u00a0
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For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
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result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
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migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
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\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
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compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
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(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
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\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
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they are moved into \u2018Stage 3\u2019.
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\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
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moved into \u2018Stage 2\u2019.
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\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n

\n

\n

\n

\n

\n

\n\n

\n

\n\n

\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n\n
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\u00a0
\n
Cash comprises cash on hand and demand deposits, e.g., cheques, petty cash and cash balances at central and other
\n
banks.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n

\n
Financial liabilities
\n
\u00a0
\n
Financial instruments or their component parts are classified on initial recognition as\u00a0liabilities or as equity in accordance with
\n
the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments. A financial
\n
instrument is classified as a liability if:
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to deliver cash or another financial asset to the holder or to exchange another financial
\n
instrument with the holder under conditions that are potentially unfavourable to KBC; or
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\u00a0
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the\u00a0
\n
way set out under \u2018Equity\u2019.
\n
\u00a0
\n
Financial liabilities \u2013 recognition and derecognition
\n
\u00a0
\n
KBC recognises a financial liability when it becomes party to the contractual provisions of the relevant instrument. This is
\n
typically the date when the consideration in the form of cash or\u00a0some other financial asset is received. Upon initial recognition,
\n
the financial liability is recognised at fair value less transaction costs directly attributable to issuance of the instrument,\u00a0
\n
except for financial liabilities at fair value through profit or loss.
\n
\u00a0
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in\u00a0the contract is discharged or
\n
cancelled, or it expires. KBC can also derecognise the financial liability and recognise a new one where an exchange takes\u00a0
\n
place between KBC and the lenders of the financial liability, each with substantially different terms, or if there are substantial
\n
modifications to the terms of the existing\u00a0financial liabilities. In assessing whether terms differ, KBC compares the discounted
\n
present value of cashflows under the new terms, including any fees paid net of any fees received and discounted using the
\n
original effective interest rate, and the discounted present value of the remaining cashflows of the original financial liability.
\n
If the difference is 10% or more, KBC derecognises the original financial liability and recognises a new one. Where the
\n
exchange of debt instruments or\u00a0modification\u00a0of terms is accounted for\u00a0as an extinguishment, any costs or fees incurred\u00a0are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\u00a0
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\u00a0
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n

\n\n
\u2022 \u00a0Financial liabilities designated by the entity as liabilities at fair value through profit or loss upon initial recognition (FVO).
\n
Under IFRS 9, a financial liability or group of financial liabilities can be measured upon initial recognition at fair value,
\n
whereby fair value changes are recognised\u00a0in the income statement except for fair value\u00a0changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair\u00a0value designation is used by KBC for the following reasons:
\n
- \u00a0managed on an FV basis: KBC designates a financial\u00a0liability or a group of financial\u00a0liabilities at fair value where it is
\n
managed and its performance is evaluated on a fair value basis. It is used to account for (unbundled) deposit
\n
components (i.e. financial liabilities that do not include a discretionary participation feature);
\n
- \u00a0Accounting mismatch: the fair value option can be used when doing so eliminates or significantly reduces a
\n
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising
\n
gains and losses on them on different bases;
\n
- \u00a0Hybrid instruments: a financial instrument is regarded as hybrid when it contains one or more embedded derivatives
\n
that are not closely related to the host contract. The fair value option\u00a0can be used when it is not possible to separate
\n
the non-closely-related embedded derivative from the host contract, in which case the entire\u00a0hybrid instrument can be
\n
designated at fair value. This means that both the embedded derivative and the host contract are measured at fair
\n
value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which case
\n
both the host contract and the embedded derivative is measured at fair value.
\n
\u2022 Financial liabilities measured at amortised cost (AC). KBC classifies most of its financial liabilities\u00a0under this category,
\n
including those used to fund trading activities where no trading intent is present in\u00a0them (e.g., issued\u00a0bonds). These financial
\n
liabilities are initially measured at cost, which is the fair value of the consideration received including transaction costs.
\n
Subsequently, they are measured at amortised cost, which is\u00a0the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus\u00a0or minus the cumulative amortisation of any difference between that initial\u00a0
\n
amount and the maturity amount. The difference between the amount made available\u00a0and the nominal value is recorded
\n
on an accruals basis as an interest expense. Interest expenses accrued but not yet paid are recorded under accruals and
\n
deferrals.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Financial liabilities \u2013 own credit risk
\n
\u00a0
\n
For financial liabilities designated at fair value, IFRS 9 requires the financial liability to be measured at fair value upon initial
\n
recognition. Any changes in fair value are subsequently recognised in the income statement, except for changes in own credit
\n
risk, which are presented separately in OCI.
\n
Accordingly, movements in the fair\u00a0value of the liability are presented in different\u00a0places: changes in own credit risk are
\n
presented in OCI and all other fair value changes are presented in the income statement under \u2018Net result from financial
\n
instruments at fair value through profit or\u00a0loss\u2019. Amounts recognised in OCI relating\u00a0to own credit risk are not recycled to\u00a0the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is\u00a0prohibited, KBC
\n
does transfer the amounts in OCI to retained earnings within equity upon derecognition. The only situation in which
\n
presentation of own credit risk in OCI is not applied is where this would create an accounting mismatch in the income
\n
statement. This could arise if there is a close economic relationship between the\u00a0financial liability designated at fair value (for
\n
which the own credit risk is recognised in OCI), while all changes in fair value of the corresponding financial asset are
\n
measured and recognised at fair value through profit or loss. This is the case with unit-linked investment contracts, where
\n
changes in fair value of the liability position are fully offset by the asset position.
\n
\u00a0
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\u00a0
\n
A financial guarantee contract is one that requires KBC to make\u00a0specified payments to reimburse\u00a0holders for losses they incur\u00a0
\n
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
\n
instrument. A financial guarantee contract is initially recognised at fair value and is subsequently measured at the higher\u00a0of
\n
(a) the amount determined in accordance with the impairment provisions of IFRS 9 (see \u2018Financial assets \u2013 impairment\u2019) and
\n
(b) the amount initially recognised less,\u00a0when appropriate, cumulative amortisation recognised in accordance with the\u00a0
\n
revenue recognition principle of IFRS 15.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n\n
Reverse repos and repos
\n
\u00a0
\n
A reverse repo is a transaction in which KBC purchases a financial asset and simultaneously enters into an agreement to sell
\n
the asset (or a similar asset) at a fixed price on a future date; this agreement is accounted for as a loan\u00a0or advance, and the\u00a0
\n
underlying asset is not recognised in the financial statements.
\n
\u00a0
\n
In a repo transaction, KBC sells a security and simultaneously agrees to\u00a0repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues\u00a0to recognise the securities in their entirety because it retains substantially all of
\n
the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and the financial
\n
liability is recognised for the obligation to pay the repurchase price.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n
Offsetting
\n
\u00a0
\n
KBC offsets and presents only a net amount of a financial asset and financial liability in its balance sheet if and only if (i)\u00a0it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis\u00a0or
\n
to realise the asset and settle the liability simultaneously.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n
Fair value
\n
\u00a0
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or\u00a0paid to transfer a liability in an orderly
\n
transaction between market participants at the measurement date\u2019. Fair value is not the amount that an entity would\u00a0receive
\n
or pay in a forced transaction, involuntary liquidation or distress sale. An imbalance between supply and demand (e.g., fewer
\n
buyers than sellers, thereby forcing prices down) is not the\u00a0same as a forced transaction or distress sale.
\n
\u00a0
\n
Market value adjustments are recognised on all positions that are measured at fair value, with fair value changes being
\n
reported in the income statement or\u00a0in OCI. They relate to close-out costs, adjustments for\u00a0less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty\u00a0risk (credit value adjustment) and funding costs:
\n
\u2022\u00a0\u00a0Credit value adjustments (CVAs) are used when measuring derivatives to ensure that their market value is adjusted to
\n
reflect the credit risk of the counterparty. In making this adjustment, both the mark-to-market value of the contract and
\n
its expected future fair value are taken into account. These valuations are weighted based on the counterparty credit risk
\n
that is determined using a quoted credit default swap (CDS) spread, or, if there is no such spread, on the counterparty
\n
credit risk that is derived from bonds whose issuers are similar to the derivative counterparty in terms of rating, sector and
\n
geographical location. A debt value adjustment (DVA) is made for contracts where the counterparty is exposed to KBC. It
\n
is similar to a CVA, but the expected future negative fair value of\u00a0the contracts is taken into consideration.
\n
\u2022\u00a0\u00a0A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to\u00a0ensure
\n
that the (future) funding\u00a0costs or income\u00a0attached to entering into\u00a0and hedging\u00a0such instruments are factored in when
\n
measuring their value.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n

\n\n

\n\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
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of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
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statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
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changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
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statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
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income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
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value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
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adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
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is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
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recognised directly when the hedged item is derecognised.
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\u00a0
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Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
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of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
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removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
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strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
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revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
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KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
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measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
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interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
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at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
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amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
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balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
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separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
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assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
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financial assets and liabilities.
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\u00a0
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Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
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designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
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currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
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hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
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the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
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OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
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includes a dividend distribution or capital decrease).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
\n
\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
\n
(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag794": { "value": "\n

\n\n

\n\n

\n\n

\n
Financial assets
\n
\u00a0
\n
KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
\n
continue to be accounted for in accordance with IAS 39.
\n
\u00a0
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Business model assessment
\n
\u00a0
\n
The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
\n
the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
\n
reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
\n
\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
\n
management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
\n
matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
\n
the sale of the assets);
\n
\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
\n
risks are managed;
\n
\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
\n
managed or the contractual cashflows collected); and
\n
\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
\n
activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
\n
how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\n
\u00a0
\n\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n
Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
\n
\u00a0
\n
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
\n
is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
\n
\u2022\u00a0\u00a0leverage features;
\n
\u2022\u00a0\u00a0prepayment and extension terms;
\n
\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
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\u00a0
\n
\u00a0
\n
\u00a0
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Reclassifications
\n
\u00a0
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
\n
model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
\n
its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
\n
of the reporting period immediately following the change.
\n

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\u00a0
\n\n

\n

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\n\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

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Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

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\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n

\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n\n
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\u00a0
\n
Cash comprises cash on hand and demand deposits, e.g., cheques, petty cash and cash balances at central and other
\n
banks.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag818": { "value": "\n

\n\n

\n\n

\n
Financial assets
\n
\u00a0
\n
KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
\n
continue to be accounted for in accordance with IAS 39.
\n
\u00a0
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n

\n\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Business model assessment
\n
\u00a0
\n
The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
\n
the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
\n
reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
\n
\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
\n
management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
\n
matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
\n
the sale of the assets);
\n
\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
\n
risks are managed;
\n
\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
\n
managed or the contractual cashflows collected); and
\n
\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
\n
activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
\n
how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\n
\u00a0
\n\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
\n
\u00a0
\n
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
\n
is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
\n
\u2022\u00a0\u00a0leverage features;
\n
\u2022\u00a0\u00a0prepayment and extension terms;
\n
\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag795": { "value": "\n

\n\n

\n
Financial assets
\n
\u00a0
\n
KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
\n
continue to be accounted for in accordance with IAS 39.
\n
\u00a0
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Business model assessment
\n
\u00a0
\n
The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
\n
the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
\n
reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
\n
\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
\n
management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
\n
matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
\n
the sale of the assets);
\n
\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
\n
risks are managed;
\n
\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
\n
managed or the contractual cashflows collected); and
\n
\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
\n
activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
\n
how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\n
\u00a0
\n\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n

\n

\n\n
Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
\n
\u00a0
\n
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
\n
is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
\n
\u2022\u00a0\u00a0leverage features;
\n
\u2022\u00a0\u00a0prepayment and extension terms;
\n
\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n
\u00a0
\n\n
Reclassifications
\n
\u00a0
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
\n
model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
\n
its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
\n
of the reporting period immediately following the change.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n

\n

\n\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag796": { "value": "\n

\n
Financial assets
\n
\u00a0
\n
KBC has applied all the requirements of IFRS 9 since 1 January 2018, except for hedge accounting transactions, which
\n
continue to be accounted for in accordance with IAS 39.
\n
\u00a0
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Business model assessment
\n
\u00a0
\n
The business model is assessed to determine whether debt instruments should be measured at AC or FVOCI. In performing
\n
the assessment, KBC reviews at portfolio level the objective of the business model in which an asset is held because this best
\n
reflects how the business is managed and how information is provided to management. The information considered includes:\u00a0
\n
\u2022\u00a0\u00a0the stated policies and objectives for the portfolio and how those policies operate in practice (in particular, whether
\n
management\u2019s strategy focuses on earning contractual interest income, maintaining a specific interest rate profile,
\n
matching the duration of the financial assets to that of the liabilities that fund those assets, or realising cashflows through\u00a0
\n
the sale of the assets);
\n
\u2022\u00a0\u00a0how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022\u00a0\u00a0the risks that affect the performance of the business model (and the financial assets\u00a0held within that model) and how those
\n
risks are managed;
\n
\u2022\u00a0\u00a0how managers of the business are rewarded (for instance, whether remuneration is based on the fair value of the assets
\n
managed or the contractual cashflows collected); and
\n
\u2022\u00a0\u00a0the frequency, volume and timing of sales in prior\u00a0periods, the reasons for such sales and KBC\u2019s\u00a0expectations of future sales\u00a0
\n
activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment of
\n
how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\n
\u00a0
\n\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n

\n\n
Assessment whether contractual cashflows\u00a0are solely payments of principal and interest (SPPI)
\n
\u00a0
\n
For the purposes of this assessment, \u2018principal\u2019 is defined as the fair value of the financial asset on initial recognition. \u2018Interest\u2019
\n
is defined as consideration for the time value of\u00a0money and for the credit\u00a0risk associated with the principal\u00a0amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk\u00a0and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely\u00a0payments of principal and interest, KBC\u00a0
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains\u00a0a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument\u00a0would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022\u00a0\u00a0contingent events that could change the amount and timing of cashflows;
\n
\u2022\u00a0\u00a0leverage features;
\n
\u2022\u00a0\u00a0prepayment and extension terms;
\n
\u2022\u00a0\u00a0terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022\u00a0\u00a0features that modify consideration of the time value of money (e.g., periodic resets of interest rates).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
\u00a0
\n
\u00a0
\n\n
Reclassifications
\n
\u00a0
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
\n
model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
\n
its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
\n
of the reporting period immediately following the change.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n

\n

\n\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag797": { "value": "\n

\n
Financial assets \u2013 recognition and derecognition
\n
\u00a0
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes\u00a0party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets\u00a0are recognised using settlement date
\n
accounting. All financial assets \u2013 except those measured at fair value through profit or loss \u2013 are measured initially at fair\u00a0
\n
value plus transaction costs directly\u00a0attributable to their acquisition.
\n
\u00a0
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Write-offs: KBC writes off the gross carrying value of financial assets (or the part of the gross carrying value) it deems
\n
uncollectable. This means that there is\u00a0no reasonable expectation\u00a0that KBC will recover any interest or principal in a timely
\n
manner. The timing of write-offs depends on several factors, including the portfolio, the existence and type of collateral, the\u00a0
\n
settlement process in each jurisdiction, and local legislation. If\u00a0a loan is uncollectable, the gross carrying value is written\u00a0off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of\u00a0
\n
impairments in the income statement. KBC differentiates between write-offs for financial reporting purposes (which are still
\n
subject to credit enforcement activities) and debt forgiveness.\u00a0The latter entails the forfeiture of\u00a0the legal right to recover\u00a0all
\n
or part of the debt outstanding to the client.
\n
\u00a0
\n
Classification of debt instruments and equity instruments
\n
\u00a0
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it\u00a0as
\n
an equity instrument or a debt instrument. An equity instrument\u00a0is defined as any contract that\u00a0evidences a\u00a0residual interest
\n
in another entity\u2019s net assets. To satisfy this condition, KBC checks that the instrument does not include a contractual
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under\u00a0
\n
conditions that are potentially unfavourable to the issuer. Any instruments that do not meet the criteria to qualify as equity
\n
instruments are classified as debt instruments by KBC, with the exception of derivatives.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag798": { "value": "\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire\u00a0
\n
or when KBC transfers its rights to receive contractual cashflows from the financial asset in a transaction in which substantially
\n
all the risks and rewards of ownership are transferred. If the terms and conditions change during the term of a financial asset,
\n
KBC assesses whether the\u00a0new terms are substantially different from the original ones and whether the changes indicate that
\n
the rights to the cashflows from the instrument have expired. If it is concluded that the terms are substantially different, the
\n
transaction is accounted for as a financial asset derecognition, which means that the existing financial asset is removed from\u00a0
\n
the balance sheet and that a\u00a0new financial asset is recognised\u00a0based on the revised terms. Conversely, when KBC assesses
\n
that the terms are not substantially different, the transaction is accounted for as a financial asset modification.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag800": { "value": "\n
Classification and measurement \u2013 debt instruments
\n
\u00a0
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified\u00a0in one of the
\n
following categories:
\n
\u2022\u00a0\u00a0Measured at fair value through profit or loss (FVPL);
\n
- \u00a0Mandatorily measured at fair value through\u00a0profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- \u00a0Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022\u00a0\u00a0Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022\u00a0\u00a0Measured at amortised cost (AC).
\n
\u00a0
\n
Debt instruments have to be classified in the FVPL category where (i) they\u00a0are not held within a business model whose
\n
objective is to hold assets in order to collect contractual cashflows or within a business model whose objective is achieved
\n
by both collecting contractual cashflows and selling financial assets or, alternatively, (ii) they are held within a business model
\n
but, on specified dates, the contractual terms of the instrument give rise to cashflows that are not solely payments of principal
\n
and interest on the principal amount outstanding.\u00a0
\n
\u00a0
\n
Furthermore, KBC may in some cases \u2013 on initial recognition \u2013 irrevocably designate a financial asset that otherwise meets
\n
the requirements to be measured at AC or at FVOCI as at fair value (FVO) if doing so eliminates or\u00a0significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\u00a0
\n
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n
\u00a0
\n
A debt instrument is measured\u00a0at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022\u00a0\u00a0The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022\u00a0\u00a0The contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal
\n
and interest on the principal amount outstanding.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\u00a0
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 \u00a0Financial liabilities designated by the entity as liabilities at fair value through profit or loss upon initial recognition (FVO).
\n
Under IFRS 9, a financial liability or group of financial liabilities can be measured upon initial recognition at fair value,
\n
whereby fair value changes are recognised\u00a0in the income statement except for fair value\u00a0changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair\u00a0value designation is used by KBC for the following reasons:
\n
- \u00a0managed on an FV basis: KBC designates a financial\u00a0liability or a group of financial\u00a0liabilities at fair value where it is
\n
managed and its performance is evaluated on a fair value basis. It is used to account for (unbundled) deposit
\n
components (i.e. financial liabilities that do not include a discretionary participation feature);
\n
- \u00a0Accounting mismatch: the fair value option can be used when doing so eliminates or significantly reduces a
\n
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising
\n
gains and losses on them on different bases;
\n
- \u00a0Hybrid instruments: a financial instrument is regarded as hybrid when it contains one or more embedded derivatives
\n
that are not closely related to the host contract. The fair value option\u00a0can be used when it is not possible to separate
\n
the non-closely-related embedded derivative from the host contract, in which case the entire\u00a0hybrid instrument can be
\n
designated at fair value. This means that both the embedded derivative and the host contract are measured at fair
\n
value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which case
\n
both the host contract and the embedded derivative is measured at fair value.
\n
\u2022 Financial liabilities measured at amortised cost (AC). KBC classifies most of its financial liabilities\u00a0under this category,
\n
including those used to fund trading activities where no trading intent is present in\u00a0them (e.g., issued\u00a0bonds). These financial
\n
liabilities are initially measured at cost, which is the fair value of the consideration received including transaction costs.
\n
Subsequently, they are measured at amortised cost, which is\u00a0the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus\u00a0or minus the cumulative amortisation of any difference between that initial\u00a0
\n
amount and the maturity amount. The difference between the amount made available\u00a0and the nominal value is recorded
\n
on an accruals basis as an interest expense. Interest expenses accrued but not yet paid are recorded under accruals and
\n
deferrals.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag799": { "value": "\n
Financial assets that are held for trading or whose performance is evaluated on a fair value basis are measured at FVPL,
\n
because they are neither held for collecting contractual cashflows, nor held for both collecting contractual cashflows and
\n
selling financial assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradingIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag801": { "value": "\n
Reclassifications
\n
\u00a0
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business\u00a0
\n
model for managing financial assets, which\u00a0can occur when KBC begins or ceases to perform an activity that is significant to
\n
its operations (e.g., when KBC acquires, disposes of, or terminates a business line). Reclassification takes place from the start
\n
of the reporting period immediately following the change.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag802": { "value": "\n
Classification and measurement \u2013 equity instruments
\n
\u00a0
\n
Financial equity instruments are classified in one of\u00a0the following categories:
\n
\u2022\u00a0\u00a0Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022\u00a0\u00a0Equity instruments elected to be measured\u00a0at fair\u00a0value through other comprehensive income (FVOCI).
\n
\u00a0
\n
There is a rebuttable presumption that all equity instruments are to be regarded as FVOCI if held for neither trading nor a
\n
contingent consideration in a business combination to which IFRS 3 applies. The election to include equity instruments in the
\n
FVOCI category is irrevocable on initial recognition and can be done on an investment-by-investment basis, which is
\n
interpreted by KBC as a share-by-share basis. Equity instruments categorised as FVOCI are subsequently measured at fair
\n
value, with all value changes\u00a0recognised in other comprehensive income and without\u00a0any recycling to the income statement,
\n
even when the investment\u00a0is disposed of. The only exception applies to dividend income, which\u00a0is recognised in the income
\n
statement under \u2018Dividend income\u2019.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag803": { "value": "\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag804": { "value": "\n
Classification and measurement \u2013 derivatives (trading and hedging)\u00a0
\n
\u00a0
\n
KBC can recognise derivative instruments either for trading purposes or as hedging derivatives. They can be accounted for
\n
as assets or liabilities depending on their current market value.\u00a0
\n
\u00a0
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022\u00a0\u00a0Derivatives that are held with the intent of hedging, but for which hedge accounting cannot be or is not applied (economic
\n
hedges): hedging instruments can be acquired with the intention of economically hedging an external exposure but without
\n
applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest income\u2019, while
\n
all other fair value changes are recognised under \u2018Net result from financial instruments at fair\u00a0value through profit or loss\u2019.\u00a0
\n
\u2022\u00a0\u00a0Derivatives held with no intent\u00a0of hedging (trading derivatives): KBC entities can also contract derivatives without any
\n
intention to hedge a position economically. Such activity can relate to closing or selling an external position in the near
\n
term or for short-term profit-taking purposes. All fair value changes (including interest) on such derivatives are recognised
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.
\n
\u00a0
\n
Hedging derivatives
\n
Hedging derivatives are derivatives that are specifically designated in a hedging relationship. The process for accounting for
\n
such derivatives is detailed in \u2018Hedge accounting\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag805": { "value": "\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

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\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag806": { "value": "\n

\n

\n
Financial assets \u2013 impairment
\n
\u00a0
\n
Definition of default
\n
\u00a0
\n
KBC defines defaulted financial assets in the same way as the definition for internal risk management purposes and in line
\n
with the guidance and standards of financial industry regulators. A financial asset\u00a0is considered in default if any of the\u00a0
\n
following conditions is fulfilled:
\n
\u2022\u00a0\u00a0There is a significant deterioration in creditworthiness;
\n
\u2022\u00a0\u00a0The asset is flagged as non-accrual;
\n
\u2022\u00a0\u00a0The asset is forborne and meets the default criteria in accordance with the internal policies for forbearance (for example,
\n
when an additional forbearance measure is extended to a forborne asset that did not reach default status within two\u00a0
\n
years of the first forbearance measure being granted, or\u00a0when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022\u00a0\u00a0KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022\u00a0\u00a0The counterparty\u00a0has filed for bankruptcy or sought similar protection measures;
\n
\u2022\u00a0\u00a0The credit facility granted to the client has been terminated.
\n
\u00a0
\n
KBC applies a backstop for facilities whose status is \u201890\u00a0days or more past due\u2019. In this context, a backstop is used as a final
\n
control to ensure that all the assets that should have been designated as defaulted are properly identified.
\n
\u00a0
\n
Expected credit loss model (ECL model)\u00a0\u2013 general
\n
\u00a0
\n\n
The ECL model is used\u00a0to measure impairment of financial assets.\u00a0
\n
\u00a0
\n
The scope of the ECL model is based on how financial assets are classified. The model is applicable to the following financial
\n
assets:
\n
\u2022\u00a0\u00a0Financial assets measured at AC and at FVOCI;
\n
\u2022\u00a0\u00a0Loan commitments and financial guarantees;
\n
\u2022\u00a0\u00a0Finance lease receivables;
\n
\u2022\u00a0\u00a0Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
No ECLs are calculated for investments in equity instruments.
\n
\u00a0
\n
Financial assets that are in scope of the ECL model carry impairment in an amount equal to the lifetime ECL if the credit risk
\n
increases significantly after initial recognition. Otherwise, the loss allowance is equal to the 12-month ECL (see below for more
\n
information on the significant\u00a0increase in\u00a0credit risk).
\n
\u00a0
\n
To distinguish the various stages with regard to quantifying ECL, KBC uses the internationally accepted terminology for \u2018Stage
\n
1\u2019, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets.
\n
Unless they are already credit impaired, all financial assets are classified in \u2018Stage 1\u2019 at the time of initial recognition and 12-
\n
month ECL is recognised. Once a significant increase in credit\u00a0risk occurs after initial recognition, the asset is moved into
\n
\u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The\u00a0ECL for trade receivables can be measured in an amount
\n
equal to their lifetime ECL. KBC applies this practical expedient to trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Impairment gains and losses on financial assets are recognised\u00a0under the \u2018Impairment\u2019 heading\u00a0in the income statement.
\n
Financial assets that are measured at AC are presented in the balance sheet at their net carrying value, which is the gross
\n
carrying value less impairment. Debt instruments measured at FVOCI are presented in the balance\u00a0sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is\u00a0recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Significant increase in credit risk since initial recognition
\n
\u00a0
\n
In accordance with the ECL model, financial assets attract lifetime ECL once their credit risk increases significantly after initial
\n
recognition. Therefore, the assessment of\u00a0a significant increase in credit risk is important for\u00a0the staging of financial assets.
\n
The assessment of a significant increase in\u00a0credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment\u00a0and, therefore, KBC has developed a multi-tier approach.\u00a0
\n
\u00a0
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
\u00a0
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022\u00a0\u00a0Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date (i.e.
\n
\u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022\u00a0\u00a0Internal rating: [only applicable if the first-tier criterion is not met] this is a relative assessment that compares the probability
\n
of default (PD) upon initial recognition to that on the reporting date. KBC does the assessment at facility level for\u00a0each
\n
reporting period. The relative change\u00a0in PD that triggers staging is an increase of\u00a0two PD notches.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first\u00a0two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (including due to the coronavirus crisis), uncertainties about geopolitical events and the
\n
secondary impact of material defaults (e.g., on the\u00a0suppliers, clients and employees of a defaulted company).
\n
\u00a0
\n
If none of these triggers results in a move into \u2018Stage 2\u2019, the bond remains in \u2018Stage 1\u2019. A financial asset is considered as \u2018Stage
\n
3\u2019\u00a0as\u00a0soon\u00a0as\u00a0it\u00a0meets\u00a0the\u00a0definition\u00a0of\u00a0default.\u00a0The\u00a0MTA\u00a0is\u00a0symmetrical,\u00a0i.e.\u00a0credit\u00a0that\u00a0has\u00a0been\u00a0moved\u00a0into\u00a0\u2018Stage\u00a02\u2019\u00a0or\u00a0\u2018Stage
\n
3\u2019\u00a0can\u00a0revert\u00a0to\u00a0\u2018Stage\u00a01\u2019\u00a0or\u00a0\u2018Stage\u00a02\u2019\u00a0if\u00a0the\u00a0tier\u00a0criterion\u00a0that triggered the migration is not met on a subsequent reporting\u00a0
\n
date.
\n
\u00a0
\n
Loan portfolio
\n
\u00a0
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is\u00a0a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the\u00a0second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the financial asset remains in \u2018Stage 1\u2019.
\n
\u2022\u00a0\u00a0Internal rating: this rating is used as the main criterion for assessing an increase in credit risk. It is a relative assessment that
\n
compares the PD upon initial recognition to\u00a0that on the reporting date. KBC does the assessment at the level of the facility
\n
(i.e. contract) for each reporting period. The relative change in PD that triggers staging is an increase of two PD notches.
\n
\u2022\u00a0\u00a0Forbearance: forborne financial assets are always considered as \u2018Stage\u00a02\u2019 unless they are already defaulted, in which case
\n
they are moved into \u2018Stage 3\u2019.
\n
\u2022\u00a0\u00a0Days past due:\u00a0KBC uses the backstop defined in the standard.\u00a0A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022\u00a0\u00a0Internal rating backstop: KBC uses an absolute level of PD as a backstop for financial assets that have to be moved into
\n
\u2018Stage 2\u2019. This backstop\u00a0corresponds to the highest PD (i.e. PD 9 based on KBC\u2019s internal rating) before a financial asset is
\n
considered defaulted.
\n
\u2022\u00a0\u00a0Management assessment: lastly, management review and assess the significant increase in credit risk for financial assets
\n
at an individual (i.e. counterparty) and portfolio level, when it is concluded that idiosyncratic events are not adequately
\n
captured in the first four\u00a0tiers of the MTA (see above\u00a0for a number of examples).
\n
\u00a0
\n
A financial asset in scope of\u00a0the ECL model is considered as \u2018Stage 3\u2019 as soon as it meets the definition of default. The MTA
\n
is symmetrical, i.e. credit that has been moved into \u2018Stage 2\u2019 or \u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion
\n
that triggered the migration is not met on the reporting date.\u00a0
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Measurement of ECL
\n
\u00a0
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD)\u00a0and loss given default
\n
(LGD).
\n
\u00a0
\n
ECL is calculated to reflect:
\n
\u2022\u00a0\u00a0an unbiased, probability-weighted amount;
\n
\u2022\u00a0\u00a0the time value of money; and
\n
\u2022\u00a0\u00a0information about past events, current conditions and forecast economic conditions.
\n
\u00a0
\n
Lifetime ECL represents the sum of ECL over the lifetime of the financial asset discounted at the original effective interest
\n
rate.
\n
The 12-month ECL represents the portion of lifetime ECL resulting from a default in the 12-month period after the reporting
\n
date.
\n
\u00a0
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as\u00a0possible and to promote efficiency,
\n
KBC uses modelling techniques similar to those developed for prudential purposes (i.e. Basel models). More information on
\n
the credit risk models developed by KBC is\u00a0provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are\u00a0adapted so they comply with IFRS 9.
\n
\u2022\u00a0\u00a0KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022\u00a0\u00a0KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-time\u2019
\n
estimate rather than one that\u00a0is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022\u00a0\u00a0KBC applies forward-looking macroeconomic information in the models.
\n
\u00a0
\n
\u00a0
\n
As regards loans that are in default, the ECL is also calculated as the product of the PD, EAD and LGD. In this specific case,
\n
however, the PD is set at 100%, the EAD is known given the default status and the LGD takes into account the net present
\n
value of the (un)recoverable amount.
\n
\u00a0
\n
KBC uses the IRB and Standardised models to\u00a0assign the Basel PD, which then serves as input for IFRS 9 ECL calculations and
\n
staging. If there is no Basel PD model with a similar scope to the IFRS 9 model, the long-term observed default rate is used
\n
as the PD for all facilities in the portfolio. For low default portfolios, there may have been no or only a small number of defaults
\n
in the period being considered, in which case the PD\u00a0is determined based on expert input and external ratings.
\n
\u00a0
\n
KBC considers forward-looking information in the calculation of ECL via macroeconomic variables and based on
\n
management\u2019s assessment of any idiosyncratic events. KBC\u2019s\u00a0Chief Economist develops three different macroeconomic
\n
scenarios (base-case, up and down) for all the KBC Core Countries and sets a corresponding probability for each scenario.
\n
On a quarterly basis, KBC updates the economic scenarios and attributed weightings\u00a0to be used for the ECL calculation
\n
based on the input of the Chief Economist.\u00a0The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of\u00a0the ECL calculation is based on statistical correlation\u00a0in historical datasets.
\n
\u00a0
\n
The maximum period for measurement of ECL is the maximum contractual\u00a0period (including extensions), except for specific\u00a0
\n
financial assets that include a drawn and an undrawn amount available on demand, and KBC\u2019s contractual ability to request
\n
repayment of the drawn amount and cancel the undrawn commitment does not limit the exposure\u00a0to\u00a0credit\u00a0risk\u00a0to\u00a0the\u00a0
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\u00a0
\n
\u00a0
\n
Purchased or originated credit impaired (POCI) assets
\n
\u00a0
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are\u00a0already defaulted at
\n
origination (i.e. they then\u00a0meet the\u00a0definition of default). POCI assets are\u00a0initially recognised at an amount net of impairment
\n
and are measured at amortised cost using a credit-adjusted effective interest rate. In subsequent periods, any changes to
\n
the lifetime ECL are recognised in the income statement. Favourable changes are recognised as an impairment gain, even if
\n
the lifetime ECL on the\u00a0reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Impairment of non-financial assets
\n
\n
When KBC prepares financial statements, it ensures that the carrying value of the non-financial asset does not exceed the
\n
amount that could be obtained from either using or selling it (\u2018recoverable amount\u2019). Property and equipment, investment
\n
property and software are subject to the impairment review only when there is objective evidence of impairment. Goodwill
\n
and intangible assets with an indefinite useful life are subject to impairment reviews at least annually and also reviewed for
\n
impairment indicators every quarter.
\n
Indications that an impairment loss is required may stem from either an internal source (e.g., the condition of the asset) or an
\n
external source (e.g., new technology or a significant decline in the asset\u2019s market value).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
When an impairment indicator is present, KBC reviews the asset\u2019s recoverable amount and the asset is impaired if its
\n
recoverable amount is lower than its carrying value at the reporting date. The recoverable amount is defined as the higher
\n
of the value in use and the fair value less cost to sell.
\n
Value in use is defined as the discounted future cashflows expected to be derived from an asset or a cash-generating unit.
\n
Impairment is borne at individual asset level, but when the individual asset does not generate cash inflows that are largely
\n
independent of those from other assets or groups of assets, the recoverable amount is determined for the so-called \u2018cash-
\n
generating unit\u2019 (CGU) to which the asset or group of assets belongs. In forming the CGUs, KBC applies its own judgement to
\n
define the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows
\n
from other assets or groups of assets. This process mainly applies to goodwill that has been recognised in relation to
\n
acquisitions.
\n
Impairment losses are recognised in the income statement for the period in which they occur. An impairment loss can be
\n
reversed if the condition that triggered it is no longer present, except for goodwill, which can never be reversed. Impairment
\n
gains are recognised in the income statement for the period in which they occur.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag807": { "value": "\n
Significant judgements and uncertainties
\n
\u00a0
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various\u00a0
\n
aspects, including the borrowers\u2019 financial position and repayment capabilities, the value and recoverability of collateral,
\n
projections and macroeconomic information. KBC applies a neutral, bias-free approach when dealing with uncertainties and
\n
making decisions based on significant judgements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Insurance contracts
\n
\u00a0
\n
General
\n
\u00a0
\n
KBC applies all the requirements of IFRS 17 as from 1 January 2023.
\n
\u00a0
\n
Scope
\n
\u00a0
\n
In order to qualify as an insurance contract, the associated insurance risk must be significant even if the insured event is
\n
extremely unlikely to occur, for example catastrophic events such as earthquakes.
\n
Whether insurance risk is significant is assessed on initial recognition of each individual contract on a present value basis.
\n
In general, the following types of contracts within KBC are in scope of IFRS 17: Non-life insurance contracts, reinsurance
\n
contracts (accepted & ceded), Life insurance contracts being the non-unit-linked contracts, the unit-linked contracts, the
\n
hybrid products and investment contracts with discretionary participating features if issued by a KBC insurance entity.
\n
In general, the following\u00a0types of contracts are out of scope of IFRS 17: investment contracts without discretionary
\n
participating features (IFRS 9), most unit-linked contracts of KBC Insurance Belgium (IFRS 9) as these insurance contracts do
\n
not contain significant insurance risk, credit cards including certain cover issued by a KBC bank entity (IFRS 15), and roadside
\n
assistance contracts (IFRS 15).
\n
Distinct non-insurance components are separated from the insurance components in\u00a0the contract and thus accounted for
\n
in accordance with the\u00a0appropriate IFRS.
\n
\u00a0
\n
Level of aggregation\u00a0
\n
\u00a0
\n
IFRS 17 calculations are performed at an aggregated level, rather than contract by contract, taking into account the following
\n
four dimensions:
\n
\u2022\u00a0\u00a0IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);\u00a0
\n
\u2022\u00a0\u00a0Annual cohort (year of inception of the\u00a0policy);
\n
\u2022\u00a0\u00a0Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022\u00a0\u00a0Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\u00a0
\n
Aggregation by IFRS 17 portfolio
\n
IFRS 17 portfolios are country-specific and driven by the local product mix (similar risks) and the way in which the local
\n
insurance business is managed\u00a0(managed together). As a minimum, the portfolios are broken down into:
\n
\u2022\u00a0\u00a0Life
\n
- \u00a0Unit-linked\u00a0
\n
- \u00a0Non-unit-linked
\n
- \u00a0Hybrid products
\n
\u2022\u00a0\u00a0Non-life insurance
\n
- \u00a0Personal insurance
\n
- \u00a0Liabilities \u2013 MTPL
\n
- \u00a0Liabilities \u2013 other than\u00a0MTPL
\n
- \u00a0Property (including other) other than fully comprehensive
\n
- \u00a0Fully comprehensive\u00a0
\n
- \u00a0Accepted reinsurance
\n
\u2022\u00a0\u00a0Ceded reinsurance
\n
\u00a0
\n
Aggregation by annual cohort
\n
KBC applies annual cohorts (a cohort is a time bucket of contracts issued in the same year), aligned with the start and end
\n
of the financial year of KBC. On 23 November 2021, the EU published a Regulation endorsing IFRS 17 Insurance Contracts,
\n
including the amendments to the original IFRS 17 and a solution for the annual cohort requirement for certain types of
\n
insurance contracts, for use in the European Union. KBC will not apply the European optional exemption from the annual
\n
cohort requirement.
\n

\n\n\n\n\n
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\u00a0
\n
BBA and VFA \u2013 Expected profitability on initial recognition
\n
For contracts measured according to the Building Block Approach (BBA, see below) and the Variable Fee Approach (VFA, see
\n
below), the allocation to the onerous, profitable or doubtful group of contracts (GoC) is determined based on the presence
\n
of a Contractual Service Margin (CSM is the unearned profit in the group of contracts at inception) under different risk
\n
adjustment levels (i.e. compensation for uncertainty in the amount and timing of future cashflows):
\n
\u2022\u00a0\u00a0If CSM < 0 when risk adjustment is calculated at a 75% confidence level,\u00a0the onerous group of contracts
\n
\u2022\u00a0\u00a0If CSM > 0 when risk adjustment is calculated at a 75% confidence\u00a0level AND
\n
- \u00a0if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, the doubtful group of contracts
\n
- \u00a0if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, the profitable group of contracts
\n
\u00a0
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA),\u00a0facts and circumstances indicating that\u00a0the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio exceeding 100%. This ratio differs from the externally
\n
published combined ratio. The IFRS 17 expected economic combined ratio is calculated for a set of contracts on an annual
\n
basis. Consequently, the new business of a year is assigned to one specific group of contracts under IFRS 17. In exceptional
\n
cases, when qualitative information reveals facts and circumstances indicating a negative trend in the IFRS 17 expected
\n
economic ratio, a recalculation is performed during the financial year.
\n
\u00a0
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous\u00a0profitability expectation. A set of contracts (SoC) is
\n
defined such that the conclusion on the expected profitability of the SoC and the associated classification (i.e. profitable,
\n
doubtful or onerous) equals the conclusion that would have been reached if the expected\u00a0profitability assessment had been
\n
carried out at the level of\u00a0the individual contract.
\n
\u00a0
\n
Recognition \u2013 derecognition
\n
\u00a0
\n
KBC recognises a group of\u00a0insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of contracts;
\n
\u2022\u00a0\u00a0The date when the first payment from a policyholder in the group becomes due;
\n
\u2022\u00a0\u00a0For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from\u00a0the policyholder is deemed\u00a0to be due when it is received.
\n
As time progresses in the cohort, new business can be added to a group of contracts if it meets\u00a0the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of reinsurance contracts held;
\n
\u2022\u00a0\u00a0The date the entity recognises an onerous group of underlying insurance contracts, if the entity entered into the related
\n
ceded reinsurance contract in the group of reinsurance contracts held at or before that date.
\n
KBC delays the recognition of a group of\u00a0reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that\u00a0date is later than the beginning of\u00a0the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance\u00a0sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\u00a0
\n
Valuation
\n
\u00a0
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take\u00a0into account the insurance contract
\n
characteristics.
\n
\u2022\u00a0\u00a0The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022\u00a0\u00a0The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the\u00a0
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n

\n\n\n\n\n\n\n
\u2022\u00a0\u00a0The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder significantly depend on the return of the\u00a0invested assets. This is a mandatory measurement
\n
model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some hybrid products of Central
\n
European entities.
\n
Only one measurement model can\u00a0be applied to each IFRS 17 portfolio.
\n
\u00a0
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of\u00a0two
\n
components, namely a Liability for Remaining Coverage\u00a0(LRC) and a Liability for Incurred Claims (LIC).
\n
\n\n
Measurement of Life insurance liabilities
\n
\n
The Life insurance liabilities are mostly valued according to either the BBA or the VFA model:
\n
\u2022 Valuation according to the BBA is applied to calculate the liability for non-unit-linked life insurance contracts and for some
\n
hybrid products.
\n
\u2022 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts and
\n
some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the invested
\n
assets.
\n
\n
Valuation according to the Building Block Approach (BBA)
\n
\n
The insurance liability consists of the following four blocks:
\n
\u2022 Actuarially estimated value of expected future cashflows;
\n
\u2022 Discounting to convert the estimation into a present value;
\n
\u2022 Risk adjustment as compensation for the uncertainty in the amount and timing of the expected future cashflows;
\n
\u2022 Contractual Service Margin (CSM), being the unearned profit that is released from the balance sheet in P&L over the term
\n
of the contract based on services provided, i.e. there are no day one gains.
\n
\n
Estimation of expected future cashflows
\n
\n
The basic principle is that Solvency II cashflows are used to ensure consistency with IFRS 17.
\n
The IFRS 17 estimation of future cashflows deviates from Solvency II on the following points:
\n
\u2022 Under Solvency II all expenses are included in the Best Estimate. Under IFRS 17 expenses are divided into directly
\n
attributable costs and non-directly attributable costs. Directly attributable costs are expenses directly related to insurance
\n
contracts. Only these directly attributable costs are included in the estimation of expected future cashflows.
\n
\u2022 Under Solvency II contracts where the insurer is at risk, tacit renewals and contracts where the coverage period starts in
\n
the future are within the Solvency II contract boundary. Under IFRS 17 cashflows are within the contract boundary if they
\n
arise from rights and obligations that exist during the reporting period
\n
- in which the entity can compel the policyholder to pay the premiums; or
\n
- in which the entity has a substantive obligation to provide services.
\n
Contracts under which the insurer provides cover, i.e. under which the insurer is at risk, are within the IFRS 17 contract
\n
boundaries. Tacit renewals for Non-life insurance contracts and contracts with a coverage period starting in the future are
\n
outside the IFRS 17 contract boundaries.
\n
Level of aggregation of projected cashflows: the Solvency II aggregation levels are Lines of Business (LoBs) and risk buckets.
\n
The IFRS 17 unit of account is based on portfolios, cohorts and expected profitability.
\n
\n
Discounting \u2013 time value of money
\n
\n
A discount rate is created per currency, in line with the currency of the cashflows. The starting point for the creation of the
\n
curves are observable market prices of a set of assets with multiple durations.
\n
The inflation assumptions for the nominal cashflows and the discount rates are consistent. Inflation is taken into account in
\n
the projection of the cashflows. Notwithstanding the reference to \u2018cashflows\u2019, the standard allows the same discount curve
\n
to be applied to all cashflows in the same contract. This simplification is applied at KBC.
\n
\n
For cashflows that vary with underlying items, the discount rate is determined by means of a top-down approach.
\n
Cashflows that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that
\n
are not fixed at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using
\n
a risk-free rate adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the current
\n
asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities. The
\n
risk-taking curve is adjusted to exclude the part not related to the insurance liabilities.
\n
Per currency, a last liquid point (LLP) is set at the level of KBC that is consistent for all entities. The last liquid points per currency
\n
are defined by taking the last available tenor for the risk-free rate in the relevant currency.
\n
\n\n
For long-term Life insurance contracts, the cashflows are modelled over a duration of 110 years. The Ultimate Forward Rate
\n
(UFR) is the rate of the 110-year tenor to which the discount curve must converge. This UFR is defined as the sum of an
\n
expected real rate and an expected inflation rate.
\n
\n
For cashflows that do not vary with underlying items, KBC chooses to apply the bottom-up approach. The bottom-up
\n
approach is determined by adding an illiquidity premium on top of a risk-free rate, so that the discount curve reflects the
\n
illiquidity characteristics of the insurance contract liabilities. This approach is used for Non-life liabilities for incurred claims.
\n
The illiquidity premium is the premium demanded by the policyholder because the insurance contract liabilities cannot be
\n
easily converted into cash at fair market value.
\n
\n
Risk adjustment of Life insurance liabilities
\n
\n
The risk adjustment for non-financial risk is the compensation that the entity requires for bearing the uncertainty about the
\n
amount and timing of cashflows that arises from non-financial risk. It is a buffer on top of the Best Estimate future cashflows
\n
which represents a 50% probability of being able to fulfil future obligations and thus a 50% probability of not being able to
\n
meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters.
\n
The risk adjustment is defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows
\n
as part of the fulfilment cashflows. The VaR is calculated at a 75% confidence level.
\n
Non-financial risks included in the VaR model are mortality risk, longevity risk, morbidity/disability risk, lapse risk, expense risk
\n
and revision risk. The correlations between the different risk types are in line with the correlation matrix of Solvency II.
\n
\n
Contractual service margin
\n
\n
The contractual service margin (CSM) represents the unearned profit the insurer will recognise in P&L as services are provided
\n
under the insurance contracts. The CSM is recognised in the balance sheet as part of the insurance liability on initial
\n
recognition in order to avoid a day one gain. The CSM on the balance sheet is released gradually over time, on the basis of
\n
services provided in the period, and should be zero at the end of the coverage period for a group of contracts.
\n
The CSM release pattern is based on coverage units in the GoC. The number of coverage units is the quantity of services
\n
provided by the insurer under the contracts in that GoC, determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period. The CSM amount recognised in
\n
P&L is the amount of coverage units allocated to the current period for the insurance coverage provided in the current period.
\n
The number of coverage units is reassessed at the end of each reporting period to reflect the most up-to-date assumptions
\n
of the contract.
\n
KBC has opted to reflect the time value of money on coverage units. By discounting the coverage units, a more stable
\n
allocation of the CSM to P&L is achieved.
\n
For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following into consideration:
\n
\u2022 Coverage units are determined based on the individual benefit components separately;
\n
\u2022 Weights are assigned to each component to reflect an appropriate level of service to be provided.
\n
Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided for each service.
\n
Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
Coverage units cannot be negative. They have a positive sign and are floored to zero. In case of zero coverage units in a
\n
given period, no CSM is allocated to P&L as no services have been provided in the period. This is possible in some cases, for
\n
instance where contracts provide for \u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but
\n
there is a mandatory waiting period for the client to be able to benefit from insurance coverage.
\n
\n
Valuation according to the Variable Fee Approach (VFA)
\n
\n
Under the VFA, the CSM mainly reflects the fee that KBC expects to earn on the market value of the Assets under
\n
Management (AUM), also referred to as \u2018underlying items\u2019.
\n
The CSM is determined as the net of the fair value of the underlying items and the total entity obligation to the policyholder.
\n
The change in the variable fee that impacts the CSM is determined as the net of:
\n
\u2022 the change in the fair value of the underlying items; and
\n
\u2022 the change in the total entity obligation to the policyholder.
\n
KBC applies the simplification of a combined amount rather than the different CSM unlocking adjustments separately.
\n
Under the VFA, the difference in measurement from BBA lies in the subsequent measurement of direct participating contracts.
\n
All changes in fulfilment cashflows are absorbed by the CSM, until the CSM becomes negative and a loss is recognised in P&L.
\n
\n
In Belgium, the insurance company has discretion over the amount of profit sharing allocated to policyholders. The
\n
policyholder does not have an \u2018enforceable right\u2019 to participate in the returns of the insurance company, which means that
\n
the VFA eligibility criteria are not fulfilled and the BBA is applied.
\n
\n\n
Measurement of Non-life insurance liabilities
\n
\n
Valuation according to the PAA is applied for the liability for most Non-life products. The PAA Liability for Remaining Coverage
\n
(LRC) reflects the premium receipts and the acquisition cashflows adjusted for amounts recognised in the income statement
\n
on a pro rata temporis basis. When an insured claim arises, a Liability for Incurred Claims (LIC) is recognised, which is similar
\n
to the BBA LIC (see below).
\n
In the case of onerous contracts, an additional liability to cover expected future losses is added to the LRC on the balance
\n
sheet and a loss is recognised immediately in P&L.
\n
\n
Valuation according to the Premium Allocation Approach
\n
\n
The PAA LRC reflects only premiums received and acquisition cashflows. As such, to appropriately present the insurance
\n
liability on a cash basis, an adjustment is performed by netting insurance payables and receivables against the LRC value.
\n
Under the PAA, KBC will not make use of the option to expense acquisition costs when incurred.
\n
At the end of each reporting period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and
\n
some of the premium receipts are earned (i.e. recorded as insurance revenues). Both components of the LRC are allocated
\n
to P&L on the basis of passage of time or the expected timing of incurred claims and benefits, if that pattern better reflects
\n
the release from risk.
\n
\n
Measurement of the Liability for Incurred Claims (LIC) for claims outstanding
\n
\n
The Liability for Incurred Claims is measured separately. A discounted best estimate of future cash outflows subject to a risk
\n
adjustment as a safety margin is provisioned on the balance sheet. No CSM is included in the LIC as there is no future
\n
coverage in scope of the liabilities for incurred claims, i.e. it contains fulfilment cashflows related to past service.
\n
A provision for the internal cost of settling claims is included, which is calculated as a percentage based on past experience.
\n
The risk adjustment for Non-life insurance liabilities is only calculated for claims incurred. Consequently, only reserve risk is
\n
taken into account. Comparable with Life insurance liabilities, a Value at Risk method (VaR) is used, but here it is calculated
\n
at a 90% confidence level.
\n
\n
Subsequent measurement
\n
\n
BBA/VFA \u2013 Liability for Remaining Coverage
\n
\n
At the end of each reporting period, subsequent to initial recognition, KBC updates its estimates and assumptions to reflect
\n
the most up-to-date situation. As a result of these updates, the carrying amount of fulfilment cashflows will vary from one
\n
period to another.
\n
Subsequent measurement under BBA/VFA for the LRC is driven by:
\n
\u2022 experience adjustments (either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result (i.e.
\n
related to current or past service)) and portfolio rollforward;
\n
\u2022 non-economic parameter updates to the fulfilment cashflows;
\n
\u2022 economic parameter updates to the fulfilment cashflows;
\n
\u2022 CSM release.
\n
\n\n\n

\n
PAA \u2013 Liability for Remaining Coverage
\n
\n
Under the PAA, the LRC is unwound on a pro rata temporis basis to obtain the so-called \u2018earned premiums\u2019, i.e. the premium
\n
reserve and the deferred acquisition commission reserve. At the end of each reporting period, acquisition cashflows are
\n
amortised (i.e. recorded as an insurance service expense) and some of the premium receipts are earned (i.e. recorded as
\n
insurance revenues). Both components of the LRC are allocated to P&L on the basis of passage of time or the expected
\n
timing of incurred claims and benefits, if that pattern better reflects the release from risk.
\n
\n
BBA/VFA/PAA \u2013 Liability for Incurred Claims
\n
\n
Any changes to the Liability for Incurred Claims are recorded in the income statement. Depending on the driver of such
\n
changes, they are either recorded in:
\n
\u2022 Insurance service expenses
\n
- Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim payments, changes in the
\n
statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 Insurance finance income and expense
\n
- Main drivers: a change in the discount rate, interest from deposits at the ceding company.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
Other matters
\n
\n
KBC has opted for a year-to-date approach, i.e. a recalculation of previously reported quarters, with the impact of the
\n
recalculation being included in the current period.
\n
KBC chooses to disaggregate insurance finance income and expense between P&L and OCI. This means recognising in P&L
\n
the interest expense on the insurance liability over the reporting period, with this interest expense being calculated using the
\n
locked-in rate (i.e. the rate curve applicable at the inception of the IFRS 17 contract) and recognising in OCI the impact of
\n
changes in the market interest rate over the reporting period.
\n
The liability position of insurance contracts and the asset position of reinsurance contracts is presented in the balance sheet
\n
on a received basis. Ceded reinsurance contracts (i.e. reinsurance contracts held) are required to be accounted for and
\n
presented separately from the underlying contracts to which they relate.
\n
Upon the acquisition of another insurance company or a portfolio transfer, the consideration received or paid partly consists
\n
of the Value of Business In-force (VBI). Insurance contracts acquired in a business combination are measured in the same
\n
way as insurance contracts issued by the entity except that the fulfilment cashflows are recognised at the acquisition date.
\n
\n\n
Impairment of non-financial assets
\n
\n
When KBC prepares financial statements, it ensures that the carrying value of the non-financial asset does not exceed the
\n
amount that could be obtained from either using or selling it (\u2018recoverable amount\u2019). Property and equipment, investment
\n
property and software are subject to the impairment review only when there is objective evidence of impairment. Goodwill
\n
and intangible assets with an indefinite useful life are subject to impairment reviews at least annually and also reviewed for
\n
impairment indicators every quarter.
\n
Indications that an impairment loss is required may stem from either an internal source (e.g., the condition of the asset) or an
\n
external source (e.g., new technology or a significant decline in the asset\u2019s market value).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
When an impairment indicator is present, KBC reviews the asset\u2019s recoverable amount and the asset is impaired if its
\n
recoverable amount is lower than its carrying value at the reporting date. The recoverable amount is defined as the higher
\n
of the value in use and the fair value less cost to sell.
\n
Value in use is defined as the discounted future cashflows expected to be derived from an asset or a cash-generating unit.
\n
Impairment is borne at individual asset level, but when the individual asset does not generate cash inflows that are largely
\n
independent of those from other assets or groups of assets, the recoverable amount is determined for the so-called \u2018cash-
\n
generating unit\u2019 (CGU) to which the asset or group of assets belongs. In forming the CGUs, KBC applies its own judgement to
\n
define the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows
\n
from other assets or groups of assets. This process mainly applies to goodwill that has been recognised in relation to
\n
acquisitions.
\n
Impairment losses are recognised in the income statement for the period in which they occur. An impairment loss can be
\n
reversed if the condition that triggered it is no longer present, except for goodwill, which can never be reversed. Impairment
\n
gains are recognised in the income statement for the period in which they occur.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Note 1.3: Critical estimates and significant judgements
\n
\n
When preparing the consolidated financial statements and applying KBC\u2019s accounting policies, management is required to
\n
make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses.
\n
Some degree of uncertainty is inherent in almost all amounts reported. The estimates are based on the experience and
\n
assumptions that KBC\u2019s management believes are reasonable at the time the financial statements are being prepared.
\n
\n
Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods
\n
affected. Significant areas of estimation uncertainty, and critical judgements in applying accounting policies that have the
\n
most significant effect on the amounts recognised in the consolidated financial statements are found in, but not limited to,
\n
notes 1.4, 1.5, 3.3, 3.6, 3.9, 3.11, 4.2, 4.4\u20134.8, 5.2, 5.5\u20135.7, 5.9 and 6.1.
\n
\n
See also the climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
\n
are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
\n
that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
\n
assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
\n
mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
\n
overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
\n
incurred as a consequence of performing insurance activities for in-force contracts.
\n
- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
\n
for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
\n
and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
\n
court awards, le
\n
g
\n
islation and discountin
\n
g
\n
.
\n

\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag808": { "value": "\n
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\u00a0
\n
Cash comprises cash on hand and demand deposits, e.g., cheques, petty cash and cash balances at central and other
\n
banks.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag809": { "value": "\n

\n\n

\n
Financial liabilities
\n
\u00a0
\n
Financial instruments or their component parts are classified on initial recognition as\u00a0liabilities or as equity in accordance with
\n
the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments. A financial
\n
instrument is classified as a liability if:
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to deliver cash or another financial asset to the holder or to exchange another financial
\n
instrument with the holder under conditions that are potentially unfavourable to KBC; or
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\u00a0
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the\u00a0
\n
way set out under \u2018Equity\u2019.
\n
\u00a0
\n
Financial liabilities \u2013 recognition and derecognition
\n
\u00a0
\n
KBC recognises a financial liability when it becomes party to the contractual provisions of the relevant instrument. This is
\n
typically the date when the consideration in the form of cash or\u00a0some other financial asset is received. Upon initial recognition,
\n
the financial liability is recognised at fair value less transaction costs directly attributable to issuance of the instrument,\u00a0
\n
except for financial liabilities at fair value through profit or loss.
\n
\u00a0
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in\u00a0the contract is discharged or
\n
cancelled, or it expires. KBC can also derecognise the financial liability and recognise a new one where an exchange takes\u00a0
\n
place between KBC and the lenders of the financial liability, each with substantially different terms, or if there are substantial
\n
modifications to the terms of the existing\u00a0financial liabilities. In assessing whether terms differ, KBC compares the discounted
\n
present value of cashflows under the new terms, including any fees paid net of any fees received and discounted using the
\n
original effective interest rate, and the discounted present value of the remaining cashflows of the original financial liability.
\n
If the difference is 10% or more, KBC derecognises the original financial liability and recognises a new one. Where the
\n
exchange of debt instruments or\u00a0modification\u00a0of terms is accounted for\u00a0as an extinguishment, any costs or fees incurred\u00a0are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\u00a0
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\u00a0
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n\n
\u2022 \u00a0Financial liabilities designated by the entity as liabilities at fair value through profit or loss upon initial recognition (FVO).
\n
Under IFRS 9, a financial liability or group of financial liabilities can be measured upon initial recognition at fair value,
\n
whereby fair value changes are recognised\u00a0in the income statement except for fair value\u00a0changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair\u00a0value designation is used by KBC for the following reasons:
\n
- \u00a0managed on an FV basis: KBC designates a financial\u00a0liability or a group of financial\u00a0liabilities at fair value where it is
\n
managed and its performance is evaluated on a fair value basis. It is used to account for (unbundled) deposit
\n
components (i.e. financial liabilities that do not include a discretionary participation feature);
\n
- \u00a0Accounting mismatch: the fair value option can be used when doing so eliminates or significantly reduces a
\n
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising
\n
gains and losses on them on different bases;
\n
- \u00a0Hybrid instruments: a financial instrument is regarded as hybrid when it contains one or more embedded derivatives
\n
that are not closely related to the host contract. The fair value option\u00a0can be used when it is not possible to separate
\n
the non-closely-related embedded derivative from the host contract, in which case the entire\u00a0hybrid instrument can be
\n
designated at fair value. This means that both the embedded derivative and the host contract are measured at fair
\n
value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which case
\n
both the host contract and the embedded derivative is measured at fair value.
\n
\u2022 Financial liabilities measured at amortised cost (AC). KBC classifies most of its financial liabilities\u00a0under this category,
\n
including those used to fund trading activities where no trading intent is present in\u00a0them (e.g., issued\u00a0bonds). These financial
\n
liabilities are initially measured at cost, which is the fair value of the consideration received including transaction costs.
\n
Subsequently, they are measured at amortised cost, which is\u00a0the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus\u00a0or minus the cumulative amortisation of any difference between that initial\u00a0
\n
amount and the maturity amount. The difference between the amount made available\u00a0and the nominal value is recorded
\n
on an accruals basis as an interest expense. Interest expenses accrued but not yet paid are recorded under accruals and
\n
deferrals.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Financial liabilities \u2013 own credit risk
\n
\u00a0
\n
For financial liabilities designated at fair value, IFRS 9 requires the financial liability to be measured at fair value upon initial
\n
recognition. Any changes in fair value are subsequently recognised in the income statement, except for changes in own credit
\n
risk, which are presented separately in OCI.
\n
Accordingly, movements in the fair\u00a0value of the liability are presented in different\u00a0places: changes in own credit risk are
\n
presented in OCI and all other fair value changes are presented in the income statement under \u2018Net result from financial
\n
instruments at fair value through profit or\u00a0loss\u2019. Amounts recognised in OCI relating\u00a0to own credit risk are not recycled to\u00a0the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is\u00a0prohibited, KBC
\n
does transfer the amounts in OCI to retained earnings within equity upon derecognition. The only situation in which
\n
presentation of own credit risk in OCI is not applied is where this would create an accounting mismatch in the income
\n
statement. This could arise if there is a close economic relationship between the\u00a0financial liability designated at fair value (for
\n
which the own credit risk is recognised in OCI), while all changes in fair value of the corresponding financial asset are
\n
measured and recognised at fair value through profit or loss. This is the case with unit-linked investment contracts, where
\n
changes in fair value of the liability position are fully offset by the asset position.
\n
\u00a0
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\u00a0
\n
A financial guarantee contract is one that requires KBC to make\u00a0specified payments to reimburse\u00a0holders for losses they incur\u00a0
\n
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
\n
instrument. A financial guarantee contract is initially recognised at fair value and is subsequently measured at the higher\u00a0of
\n
(a) the amount determined in accordance with the impairment provisions of IFRS 9 (see \u2018Financial assets \u2013 impairment\u2019) and
\n
(b) the amount initially recognised less,\u00a0when appropriate, cumulative amortisation recognised in accordance with the\u00a0
\n
revenue recognition principle of IFRS 15.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag810": { "value": "\n

\n
Financial liabilities
\n
\u00a0
\n
Financial instruments or their component parts are classified on initial recognition as\u00a0liabilities or as equity in accordance with
\n
the substance of the contractual arrangements and the definitions of financial liabilities and equity instruments. A financial
\n
instrument is classified as a liability if:
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to deliver cash or another financial asset to the holder or to exchange another financial
\n
instrument with the holder under conditions that are potentially unfavourable to KBC; or
\n
\u2022\u00a0\u00a0KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\u00a0
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the\u00a0
\n
way set out under \u2018Equity\u2019.
\n
\u00a0
\n
Financial liabilities \u2013 recognition and derecognition
\n
\u00a0
\n
KBC recognises a financial liability when it becomes party to the contractual provisions of the relevant instrument. This is
\n
typically the date when the consideration in the form of cash or\u00a0some other financial asset is received. Upon initial recognition,
\n
the financial liability is recognised at fair value less transaction costs directly attributable to issuance of the instrument,\u00a0
\n
except for financial liabilities at fair value through profit or loss.
\n
\u00a0
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in\u00a0the contract is discharged or
\n
cancelled, or it expires. KBC can also derecognise the financial liability and recognise a new one where an exchange takes\u00a0
\n
place between KBC and the lenders of the financial liability, each with substantially different terms, or if there are substantial
\n
modifications to the terms of the existing\u00a0financial liabilities. In assessing whether terms differ, KBC compares the discounted
\n
present value of cashflows under the new terms, including any fees paid net of any fees received and discounted using the
\n
original effective interest rate, and the discounted present value of the remaining cashflows of the original financial liability.
\n
If the difference is 10% or more, KBC derecognises the original financial liability and recognises a new one. Where the
\n
exchange of debt instruments or\u00a0modification\u00a0of terms is accounted for\u00a0as an extinguishment, any costs or fees incurred\u00a0are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\u00a0
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\u00a0
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022\u00a0\u00a0Financial liabilities held for trading (HFT). Held-for-trading liabilities are those incurred principally for generating a profit
\n
from short-term fluctuations in price or dealer\u2019s margin. A liability also qualifies as a trading liability if it belongs to a portfolio\u00a0
\n
of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of short-
\n
term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments, time
\n
deposits and debt certificates. Derivative liabilities are split by\u00a0KBC into trading and hedging derivatives as in the\u00a0case of
\n
derivative assets. Initially,\u00a0held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value.\u00a0Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n
\u2022 \u00a0Financial liabilities designated by the entity as liabilities at fair value through profit or loss upon initial recognition (FVO).
\n
Under IFRS 9, a financial liability or group of financial liabilities can be measured upon initial recognition at fair value,
\n
whereby fair value changes are recognised\u00a0in the income statement except for fair value\u00a0changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair\u00a0value designation is used by KBC for the following reasons:
\n
- \u00a0managed on an FV basis: KBC designates a financial\u00a0liability or a group of financial\u00a0liabilities at fair value where it is
\n
managed and its performance is evaluated on a fair value basis. It is used to account for (unbundled) deposit
\n
components (i.e. financial liabilities that do not include a discretionary participation feature);
\n
- \u00a0Accounting mismatch: the fair value option can be used when doing so eliminates or significantly reduces a
\n
measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising
\n
gains and losses on them on different bases;
\n
- \u00a0Hybrid instruments: a financial instrument is regarded as hybrid when it contains one or more embedded derivatives
\n
that are not closely related to the host contract. The fair value option\u00a0can be used when it is not possible to separate
\n
the non-closely-related embedded derivative from the host contract, in which case the entire\u00a0hybrid instrument can be
\n
designated at fair value. This means that both the embedded derivative and the host contract are measured at fair
\n
value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which case
\n
both the host contract and the embedded derivative is measured at fair value.
\n
\u2022 Financial liabilities measured at amortised cost (AC). KBC classifies most of its financial liabilities\u00a0under this category,
\n
including those used to fund trading activities where no trading intent is present in\u00a0them (e.g., issued\u00a0bonds). These financial
\n
liabilities are initially measured at cost, which is the fair value of the consideration received including transaction costs.
\n
Subsequently, they are measured at amortised cost, which is\u00a0the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus\u00a0or minus the cumulative amortisation of any difference between that initial\u00a0
\n
amount and the maturity amount. The difference between the amount made available\u00a0and the nominal value is recorded
\n
on an accruals basis as an interest expense. Interest expenses accrued but not yet paid are recorded under accruals and
\n
deferrals.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0
\n
Financial liabilities \u2013 own credit risk
\n
\u00a0
\n
For financial liabilities designated at fair value, IFRS 9 requires the financial liability to be measured at fair value upon initial
\n
recognition. Any changes in fair value are subsequently recognised in the income statement, except for changes in own credit
\n
risk, which are presented separately in OCI.
\n
Accordingly, movements in the fair\u00a0value of the liability are presented in different\u00a0places: changes in own credit risk are
\n
presented in OCI and all other fair value changes are presented in the income statement under \u2018Net result from financial
\n
instruments at fair value through profit or\u00a0loss\u2019. Amounts recognised in OCI relating\u00a0to own credit risk are not recycled to\u00a0the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is\u00a0prohibited, KBC
\n
does transfer the amounts in OCI to retained earnings within equity upon derecognition. The only situation in which
\n
presentation of own credit risk in OCI is not applied is where this would create an accounting mismatch in the income
\n
statement. This could arise if there is a close economic relationship between the\u00a0financial liability designated at fair value (for
\n
which the own credit risk is recognised in OCI), while all changes in fair value of the corresponding financial asset are
\n
measured and recognised at fair value through profit or loss. This is the case with unit-linked investment contracts, where
\n
changes in fair value of the liability position are fully offset by the asset position.
\n
\u00a0
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\u00a0
\n
A financial guarantee contract is one that requires KBC to make\u00a0specified payments to reimburse\u00a0holders for losses they incur\u00a0
\n
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
\n
instrument. A financial guarantee contract is initially recognised at fair value and is subsequently measured at the higher\u00a0of
\n
(a) the amount determined in accordance with the impairment provisions of IFRS 9 (see \u2018Financial assets \u2013 impairment\u2019) and
\n
(b) the amount initially recognised less,\u00a0when appropriate, cumulative amortisation recognised in accordance with the\u00a0
\n
revenue recognition principle of IFRS 15.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag811": { "value": "\n
Financial liabilities \u2013 financial guarantee contract
\n
\u00a0
\n
A financial guarantee contract is one that requires KBC to make\u00a0specified payments to reimburse\u00a0holders for losses they incur\u00a0
\n
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
\n
instrument. A financial guarantee contract is initially recognised at fair value and is subsequently measured at the higher\u00a0of
\n
(a) the amount determined in accordance with the impairment provisions of IFRS 9 (see \u2018Financial assets \u2013 impairment\u2019) and
\n
(b) the amount initially recognised less,\u00a0when appropriate, cumulative amortisation recognised in accordance with the\u00a0
\n
revenue recognition principle of IFRS 15.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag812": { "value": "\n
Reverse repos and repos
\n
\u00a0
\n
A reverse repo is a transaction in which KBC purchases a financial asset and simultaneously enters into an agreement to sell
\n
the asset (or a similar asset) at a fixed price on a future date; this agreement is accounted for as a loan\u00a0or advance, and the\u00a0
\n
underlying asset is not recognised in the financial statements.
\n
\u00a0
\n
In a repo transaction, KBC sells a security and simultaneously agrees to\u00a0repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues\u00a0to recognise the securities in their entirety because it retains substantially all of
\n
the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and the financial
\n
liability is recognised for the obligation to pay the repurchase price.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag813": { "value": "\n
Offsetting
\n
\u00a0
\n
KBC offsets and presents only a net amount of a financial asset and financial liability in its balance sheet if and only if (i)\u00a0it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis\u00a0or
\n
to realise the asset and settle the liability simultaneously.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag814": { "value": "\n
Fair value
\n
\u00a0
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or\u00a0paid to transfer a liability in an orderly
\n
transaction between market participants at the measurement date\u2019. Fair value is not the amount that an entity would\u00a0receive
\n
or pay in a forced transaction, involuntary liquidation or distress sale. An imbalance between supply and demand (e.g., fewer
\n
buyers than sellers, thereby forcing prices down) is not the\u00a0same as a forced transaction or distress sale.
\n
\u00a0
\n
Market value adjustments are recognised on all positions that are measured at fair value, with fair value changes being
\n
reported in the income statement or\u00a0in OCI. They relate to close-out costs, adjustments for\u00a0less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty\u00a0risk (credit value adjustment) and funding costs:
\n
\u2022\u00a0\u00a0Credit value adjustments (CVAs) are used when measuring derivatives to ensure that their market value is adjusted to
\n
reflect the credit risk of the counterparty. In making this adjustment, both the mark-to-market value of the contract and
\n
its expected future fair value are taken into account. These valuations are weighted based on the counterparty credit risk
\n
that is determined using a quoted credit default swap (CDS) spread, or, if there is no such spread, on the counterparty
\n
credit risk that is derived from bonds whose issuers are similar to the derivative counterparty in terms of rating, sector and
\n
geographical location. A debt value adjustment (DVA) is made for contracts where the counterparty is exposed to KBC. It
\n
is similar to a CVA, but the expected future negative fair value of\u00a0the contracts is taken into consideration.
\n
\u2022\u00a0\u00a0A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to\u00a0ensure
\n
that the (future) funding\u00a0costs or income\u00a0attached to entering into\u00a0and hedging\u00a0such instruments are factored in when
\n
measuring their value.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag815": { "value": "\n

\n\n
Hedge accounting
\n
\u00a0
\n
KBC has elected to apply the hedge accounting principles under IAS 39 (EU carve-out version). KBC designates certain
\n
derivatives held for risk management purposes, as well as\u00a0certain non-derivative financial instruments, as hedging
\n
instruments in qualifying hedging relationships. On initial designation of the hedge, KBC formally documents the relationship
\n
between the hedging\u00a0instrument(s) and hedged item(s), including\u00a0the risk management objective and strategy in undertaking
\n
the hedge, together with the method that will be used to assess the effectiveness of the hedging relationship. KBC makes
\n
an assessment, both at inception of the relationship and on an ongoing basis, of\u00a0whether the hedging instrument(s) is/are
\n
expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s) during
\n
the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125%.
\n
KBC makes an assessment for a cashflow hedge of a forecast transaction of whether it is highly probable to occur and
\n
presents an exposure to variations in cashflows that could ultimately affect the income statement.
\n
\u00a0
\n
KBC uses the following\u00a0hedge accounting techniques: cashflow hedges, fair value micro\u00a0hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges\u00a0of net investments in foreign operations.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Cashflow hedges: if a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable
\n
to a particular risk associated with a recognised asset, liability or\u00a0highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair\u00a0value of the derivative is recognised in OCI and presented in
\n
the hedging reserve (cashflow hedge) within OCI. Any ineffective portion of changes in the fair value of a derivative is
\n
immediately recognised in the income statement under \u2018Net result\u00a0from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is\u00a0reclassified to the income statement (as a reclassification adjustment in the same
\n
period as the hedged cashflows affect the income statement) under \u2018Net interest income\u2019. If\u00a0the hedging derivative expires
\n
or is sold, terminated or exercised, or the hedge no longer meets the criteria for cashflow hedge accounting, or the hedge\u00a0
\n
designation is revoked, then hedge accounting is discontinued prospectively. Any cumulative gain or loss existing in OCI at
\n
that time remains in OCI and is recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019
\n
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer\u00a0
\n
expected to occur, the cumulative gain or\u00a0loss that was reported in OCI is immediately recycled to the income statement
\n
under \u2018Net result from financial instruments at fair value through profit or loss\u2019.\u00a0
\n
\u00a0
\n
Fair value micro hedging: when a derivative is designated as the hedging instrument in a hedge of the change in fair value
\n
of a recognised asset or liability (portfolio of recognised assets or liabilities) or a firm commitment that could affect the income
\n
statement, changes in the fair value of the derivative are immediately recognised in the income statement together with
\n
changes in the fair value of the hedged item that are attributable to the hedged risk (in the same item in the income
\n
statement as the hedged item). However, accrued interest income\u00a0from interest rate swaps is\u00a0recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold,\u00a0terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or\u00a0the hedge designation is revoked,\u00a0then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged\u00a0item\u00a0for which the effective interest method\u00a0is used
\n
is amortised to the income statement as part of the recalculated\u00a0effective interest rate of the item over its remaining life or\u00a0
\n
recognised directly when the hedged item is derecognised.
\n
\u00a0
\n
Fair value hedges for a portfolio of interest-rate risk (macro hedging): the EU\u2019s macro hedging\u00a0carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated\u00a0as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting\u00a0relating to hedging core\u00a0deposits and underhedging
\n
strategies. Under the EU carve-out, hedge accounting may be applied to core deposits and will be ineffective only when the
\n
revised estimate of the amount of cashflows in scheduled time buckets\u00a0falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of\u00a0the financial asset portfolios and the financial liability portfolios. Interest rate swaps\u00a0are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued\u00a0interest income from
\n
interest rate swaps is recognised in \u2018Net Interest Income\u2019. The hedged amount of financial assets and liabilities is measured
\n
at fair value as well, with fair value changes being reported in the income statement. For hedged items measured at
\n
amortised cost, the fair value of the hedged amount is presented as a separate item on the assets or liabilities side of the
\n
balance sheet. If\u00a0a hedge is ineffective,\u00a0the cumulative fair value\u00a0change in the hedged amount that was presented as a
\n
separate item on the balance sheet will be amortised to the income statement over the remaining lifetime of the hedged
\n
assets or will be immediately removed from\u00a0the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\u00a0
\n
Hedge of net investments\u00a0in foreign operations: when a derivative instrument or a\u00a0non-derivative financial instrument is
\n
designated as the hedging instrument in a hedge of a net investment in a foreign operation having a different functional
\n
currency than the direct holding company of the foreign operation, the effective portion of changes in the fair value of the\u00a0
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the\u00a0fair value of the derivative is recognised immediately in the income statement. The amount recognised in
\n
OCI is reclassified to the income statement as a reclassification adjustment on disposal of the foreign operation (which
\n
includes a dividend distribution or capital decrease).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag816": { "value": "\n

\n\n

\n\n
Insurance contracts
\n
\u00a0
\n
General
\n
\u00a0
\n
KBC applies all the requirements of IFRS 17 as from 1 January 2023.
\n
\u00a0
\n
Scope
\n
\u00a0
\n
In order to qualify as an insurance contract, the associated insurance risk must be significant even if the insured event is
\n
extremely unlikely to occur, for example catastrophic events such as earthquakes.
\n
Whether insurance risk is significant is assessed on initial recognition of each individual contract on a present value basis.
\n
In general, the following types of contracts within KBC are in scope of IFRS 17: Non-life insurance contracts, reinsurance
\n
contracts (accepted & ceded), Life insurance contracts being the non-unit-linked contracts, the unit-linked contracts, the
\n
hybrid products and investment contracts with discretionary participating features if issued by a KBC insurance entity.
\n
In general, the following\u00a0types of contracts are out of scope of IFRS 17: investment contracts without discretionary
\n
participating features (IFRS 9), most unit-linked contracts of KBC Insurance Belgium (IFRS 9) as these insurance contracts do
\n
not contain significant insurance risk, credit cards including certain cover issued by a KBC bank entity (IFRS 15), and roadside
\n
assistance contracts (IFRS 15).
\n
Distinct non-insurance components are separated from the insurance components in\u00a0the contract and thus accounted for
\n
in accordance with the\u00a0appropriate IFRS.
\n
\u00a0
\n
Level of aggregation\u00a0
\n
\u00a0
\n
IFRS 17 calculations are performed at an aggregated level, rather than contract by contract, taking into account the following
\n
four dimensions:
\n
\u2022\u00a0\u00a0IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);\u00a0
\n
\u2022\u00a0\u00a0Annual cohort (year of inception of the\u00a0policy);
\n
\u2022\u00a0\u00a0Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022\u00a0\u00a0Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\u00a0
\n
Aggregation by IFRS 17 portfolio
\n
IFRS 17 portfolios are country-specific and driven by the local product mix (similar risks) and the way in which the local
\n
insurance business is managed\u00a0(managed together). As a minimum, the portfolios are broken down into:
\n
\u2022\u00a0\u00a0Life
\n
- \u00a0Unit-linked\u00a0
\n
- \u00a0Non-unit-linked
\n
- \u00a0Hybrid products
\n
\u2022\u00a0\u00a0Non-life insurance
\n
- \u00a0Personal insurance
\n
- \u00a0Liabilities \u2013 MTPL
\n
- \u00a0Liabilities \u2013 other than\u00a0MTPL
\n
- \u00a0Property (including other) other than fully comprehensive
\n
- \u00a0Fully comprehensive\u00a0
\n
- \u00a0Accepted reinsurance
\n
\u2022\u00a0\u00a0Ceded reinsurance
\n
\u00a0
\n
Aggregation by annual cohort
\n
KBC applies annual cohorts (a cohort is a time bucket of contracts issued in the same year), aligned with the start and end
\n
of the financial year of KBC. On 23 November 2021, the EU published a Regulation endorsing IFRS 17 Insurance Contracts,
\n
including the amendments to the original IFRS 17 and a solution for the annual cohort requirement for certain types of
\n
insurance contracts, for use in the European Union. KBC will not apply the European optional exemption from the annual
\n
cohort requirement.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n

\n\n\n
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\u00a0
\n
BBA and VFA \u2013 Expected profitability on initial recognition
\n
For contracts measured according to the Building Block Approach (BBA, see below) and the Variable Fee Approach (VFA, see
\n
below), the allocation to the onerous, profitable or doubtful group of contracts (GoC) is determined based on the presence
\n
of a Contractual Service Margin (CSM is the unearned profit in the group of contracts at inception) under different risk
\n
adjustment levels (i.e. compensation for uncertainty in the amount and timing of future cashflows):
\n
\u2022\u00a0\u00a0If CSM < 0 when risk adjustment is calculated at a 75% confidence level,\u00a0the onerous group of contracts
\n
\u2022\u00a0\u00a0If CSM > 0 when risk adjustment is calculated at a 75% confidence\u00a0level AND
\n
- \u00a0if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, the doubtful group of contracts
\n
- \u00a0if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, the profitable group of contracts
\n
\u00a0
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA),\u00a0facts and circumstances indicating that\u00a0the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio exceeding 100%. This ratio differs from the externally
\n
published combined ratio. The IFRS 17 expected economic combined ratio is calculated for a set of contracts on an annual
\n
basis. Consequently, the new business of a year is assigned to one specific group of contracts under IFRS 17. In exceptional
\n
cases, when qualitative information reveals facts and circumstances indicating a negative trend in the IFRS 17 expected
\n
economic ratio, a recalculation is performed during the financial year.
\n
\u00a0
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous\u00a0profitability expectation. A set of contracts (SoC) is
\n
defined such that the conclusion on the expected profitability of the SoC and the associated classification (i.e. profitable,
\n
doubtful or onerous) equals the conclusion that would have been reached if the expected\u00a0profitability assessment had been
\n
carried out at the level of\u00a0the individual contract.
\n
\u00a0
\n
Recognition \u2013 derecognition
\n
\u00a0
\n
KBC recognises a group of\u00a0insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of contracts;
\n
\u2022\u00a0\u00a0The date when the first payment from a policyholder in the group becomes due;
\n
\u2022\u00a0\u00a0For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from\u00a0the policyholder is deemed\u00a0to be due when it is received.
\n
As time progresses in the cohort, new business can be added to a group of contracts if it meets\u00a0the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of reinsurance contracts held;
\n
\u2022\u00a0\u00a0The date the entity recognises an onerous group of underlying insurance contracts, if the entity entered into the related
\n
ceded reinsurance contract in the group of reinsurance contracts held at or before that date.
\n
KBC delays the recognition of a group of\u00a0reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that\u00a0date is later than the beginning of\u00a0the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance\u00a0sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\u00a0
\n
Valuation
\n
\u00a0
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take\u00a0into account the insurance contract
\n
characteristics.
\n
\u2022\u00a0\u00a0The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022\u00a0\u00a0The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the\u00a0
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n

\n\n\n\n\n\n\n
\u2022\u00a0\u00a0The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder significantly depend on the return of the\u00a0invested assets. This is a mandatory measurement
\n
model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some hybrid products of Central
\n
European entities.
\n
Only one measurement model can\u00a0be applied to each IFRS 17 portfolio.
\n
\u00a0
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of\u00a0two
\n
components, namely a Liability for Remaining Coverage\u00a0(LRC) and a Liability for Incurred Claims (LIC).
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n
Measurement of Life insurance liabilities
\n
\n
The Life insurance liabilities are mostly valued according to either the BBA or the VFA model:
\n
\u2022 Valuation according to the BBA is applied to calculate the liability for non-unit-linked life insurance contracts and for some
\n
hybrid products.
\n
\u2022 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts and
\n
some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the invested
\n
assets.
\n
\n
Valuation according to the Building Block Approach (BBA)
\n
\n
The insurance liability consists of the following four blocks:
\n
\u2022 Actuarially estimated value of expected future cashflows;
\n
\u2022 Discounting to convert the estimation into a present value;
\n
\u2022 Risk adjustment as compensation for the uncertainty in the amount and timing of the expected future cashflows;
\n
\u2022 Contractual Service Margin (CSM), being the unearned profit that is released from the balance sheet in P&L over the term
\n
of the contract based on services provided, i.e. there are no day one gains.
\n
\n
Estimation of expected future cashflows
\n
\n
The basic principle is that Solvency II cashflows are used to ensure consistency with IFRS 17.
\n
The IFRS 17 estimation of future cashflows deviates from Solvency II on the following points:
\n
\u2022 Under Solvency II all expenses are included in the Best Estimate. Under IFRS 17 expenses are divided into directly
\n
attributable costs and non-directly attributable costs. Directly attributable costs are expenses directly related to insurance
\n
contracts. Only these directly attributable costs are included in the estimation of expected future cashflows.
\n
\u2022 Under Solvency II contracts where the insurer is at risk, tacit renewals and contracts where the coverage period starts in
\n
the future are within the Solvency II contract boundary. Under IFRS 17 cashflows are within the contract boundary if they
\n
arise from rights and obligations that exist during the reporting period
\n
- in which the entity can compel the policyholder to pay the premiums; or
\n
- in which the entity has a substantive obligation to provide services.
\n
Contracts under which the insurer provides cover, i.e. under which the insurer is at risk, are within the IFRS 17 contract
\n
boundaries. Tacit renewals for Non-life insurance contracts and contracts with a coverage period starting in the future are
\n
outside the IFRS 17 contract boundaries.
\n
Level of aggregation of projected cashflows: the Solvency II aggregation levels are Lines of Business (LoBs) and risk buckets.
\n
The IFRS 17 unit of account is based on portfolios, cohorts and expected profitability.
\n
\n
Discounting \u2013 time value of money
\n
\n
A discount rate is created per currency, in line with the currency of the cashflows. The starting point for the creation of the
\n
curves are observable market prices of a set of assets with multiple durations.
\n
The inflation assumptions for the nominal cashflows and the discount rates are consistent. Inflation is taken into account in
\n
the projection of the cashflows. Notwithstanding the reference to \u2018cashflows\u2019, the standard allows the same discount curve
\n
to be applied to all cashflows in the same contract. This simplification is applied at KBC.
\n
\n
For cashflows that vary with underlying items, the discount rate is determined by means of a top-down approach.
\n
Cashflows that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that
\n
are not fixed at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using
\n
a risk-free rate adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the current
\n
asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities. The
\n
risk-taking curve is adjusted to exclude the part not related to the insurance liabilities.
\n
Per currency, a last liquid point (LLP) is set at the level of KBC that is consistent for all entities. The last liquid points per currency
\n
are defined by taking the last available tenor for the risk-free rate in the relevant currency.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n
For long-term Life insurance contracts, the cashflows are modelled over a duration of 110 years. The Ultimate Forward Rate
\n
(UFR) is the rate of the 110-year tenor to which the discount curve must converge. This UFR is defined as the sum of an
\n
expected real rate and an expected inflation rate.
\n
\n
For cashflows that do not vary with underlying items, KBC chooses to apply the bottom-up approach. The bottom-up
\n
approach is determined by adding an illiquidity premium on top of a risk-free rate, so that the discount curve reflects the
\n
illiquidity characteristics of the insurance contract liabilities. This approach is used for Non-life liabilities for incurred claims.
\n
The illiquidity premium is the premium demanded by the policyholder because the insurance contract liabilities cannot be
\n
easily converted into cash at fair market value.
\n
\n
Risk adjustment of Life insurance liabilities
\n
\n
The risk adjustment for non-financial risk is the compensation that the entity requires for bearing the uncertainty about the
\n
amount and timing of cashflows that arises from non-financial risk. It is a buffer on top of the Best Estimate future cashflows
\n
which represents a 50% probability of being able to fulfil future obligations and thus a 50% probability of not being able to
\n
meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters.
\n
The risk adjustment is defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows
\n
as part of the fulfilment cashflows. The VaR is calculated at a 75% confidence level.
\n
Non-financial risks included in the VaR model are mortality risk, longevity risk, morbidity/disability risk, lapse risk, expense risk
\n
and revision risk. The correlations between the different risk types are in line with the correlation matrix of Solvency II.
\n
\n
Contractual service margin
\n
\n
The contractual service margin (CSM) represents the unearned profit the insurer will recognise in P&L as services are provided
\n
under the insurance contracts. The CSM is recognised in the balance sheet as part of the insurance liability on initial
\n
recognition in order to avoid a day one gain. The CSM on the balance sheet is released gradually over time, on the basis of
\n
services provided in the period, and should be zero at the end of the coverage period for a group of contracts.
\n
The CSM release pattern is based on coverage units in the GoC. The number of coverage units is the quantity of services
\n
provided by the insurer under the contracts in that GoC, determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period. The CSM amount recognised in
\n
P&L is the amount of coverage units allocated to the current period for the insurance coverage provided in the current period.
\n
The number of coverage units is reassessed at the end of each reporting period to reflect the most up-to-date assumptions
\n
of the contract.
\n
KBC has opted to reflect the time value of money on coverage units. By discounting the coverage units, a more stable
\n
allocation of the CSM to P&L is achieved.
\n
For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following into consideration:
\n
\u2022 Coverage units are determined based on the individual benefit components separately;
\n
\u2022 Weights are assigned to each component to reflect an appropriate level of service to be provided.
\n
Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided for each service.
\n
Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
Coverage units cannot be negative. They have a positive sign and are floored to zero. In case of zero coverage units in a
\n
given period, no CSM is allocated to P&L as no services have been provided in the period. This is possible in some cases, for
\n
instance where contracts provide for \u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but
\n
there is a mandatory waiting period for the client to be able to benefit from insurance coverage.
\n
\n
Valuation according to the Variable Fee Approach (VFA)
\n
\n
Under the VFA, the CSM mainly reflects the fee that KBC expects to earn on the market value of the Assets under
\n
Management (AUM), also referred to as \u2018underlying items\u2019.
\n
The CSM is determined as the net of the fair value of the underlying items and the total entity obligation to the policyholder.
\n
The change in the variable fee that impacts the CSM is determined as the net of:
\n
\u2022 the change in the fair value of the underlying items; and
\n
\u2022 the change in the total entity obligation to the policyholder.
\n
KBC applies the simplification of a combined amount rather than the different CSM unlocking adjustments separately.
\n
Under the VFA, the difference in measurement from BBA lies in the subsequent measurement of direct participating contracts.
\n
All changes in fulfilment cashflows are absorbed by the CSM, until the CSM becomes negative and a loss is recognised in P&L.
\n
\n
In Belgium, the insurance company has discretion over the amount of profit sharing allocated to policyholders. The
\n
policyholder does not have an \u2018enforceable right\u2019 to participate in the returns of the insurance company, which means that
\n
the VFA eligibility criteria are not fulfilled and the BBA is applied.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n
Measurement of Non-life insurance liabilities
\n
\n
Valuation according to the PAA is applied for the liability for most Non-life products. The PAA Liability for Remaining Coverage
\n
(LRC) reflects the premium receipts and the acquisition cashflows adjusted for amounts recognised in the income statement
\n
on a pro rata temporis basis. When an insured claim arises, a Liability for Incurred Claims (LIC) is recognised, which is similar
\n
to the BBA LIC (see below).
\n
In the case of onerous contracts, an additional liability to cover expected future losses is added to the LRC on the balance
\n
sheet and a loss is recognised immediately in P&L.
\n
\n
Valuation according to the Premium Allocation Approach
\n
\n
The PAA LRC reflects only premiums received and acquisition cashflows. As such, to appropriately present the insurance
\n
liability on a cash basis, an adjustment is performed by netting insurance payables and receivables against the LRC value.
\n
Under the PAA, KBC will not make use of the option to expense acquisition costs when incurred.
\n
At the end of each reporting period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and
\n
some of the premium receipts are earned (i.e. recorded as insurance revenues). Both components of the LRC are allocated
\n
to P&L on the basis of passage of time or the expected timing of incurred claims and benefits, if that pattern better reflects
\n
the release from risk.
\n
\n
Measurement of the Liability for Incurred Claims (LIC) for claims outstanding
\n
\n
The Liability for Incurred Claims is measured separately. A discounted best estimate of future cash outflows subject to a risk
\n
adjustment as a safety margin is provisioned on the balance sheet. No CSM is included in the LIC as there is no future
\n
coverage in scope of the liabilities for incurred claims, i.e. it contains fulfilment cashflows related to past service.
\n
A provision for the internal cost of settling claims is included, which is calculated as a percentage based on past experience.
\n
The risk adjustment for Non-life insurance liabilities is only calculated for claims incurred. Consequently, only reserve risk is
\n
taken into account. Comparable with Life insurance liabilities, a Value at Risk method (VaR) is used, but here it is calculated
\n
at a 90% confidence level.
\n
\n
Subsequent measurement
\n
\n
BBA/VFA \u2013 Liability for Remaining Coverage
\n
\n
At the end of each reporting period, subsequent to initial recognition, KBC updates its estimates and assumptions to reflect
\n
the most up-to-date situation. As a result of these updates, the carrying amount of fulfilment cashflows will vary from one
\n
period to another.
\n
Subsequent measurement under BBA/VFA for the LRC is driven by:
\n
\u2022 experience adjustments (either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result (i.e.
\n
related to current or past service)) and portfolio rollforward;
\n
\u2022 non-economic parameter updates to the fulfilment cashflows;
\n
\u2022 economic parameter updates to the fulfilment cashflows;
\n
\u2022 CSM release.
\n
\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n
PAA \u2013 Liability for Remaining Coverage
\n
\n
Under the PAA, the LRC is unwound on a pro rata temporis basis to obtain the so-called \u2018earned premiums\u2019, i.e. the premium
\n
reserve and the deferred acquisition commission reserve. At the end of each reporting period, acquisition cashflows are
\n
amortised (i.e. recorded as an insurance service expense) and some of the premium receipts are earned (i.e. recorded as
\n
insurance revenues). Both components of the LRC are allocated to P&L on the basis of passage of time or the expected
\n
timing of incurred claims and benefits, if that pattern better reflects the release from risk.
\n
\n
BBA/VFA/PAA \u2013 Liability for Incurred Claims
\n
\n
Any changes to the Liability for Incurred Claims are recorded in the income statement. Depending on the driver of such
\n
changes, they are either recorded in:
\n
\u2022 Insurance service expenses
\n
- Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim payments, changes in the
\n
statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 Insurance finance income and expense
\n
- Main drivers: a change in the discount rate, interest from deposits at the ceding company.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag817": { "value": "\n

\n\n
Insurance contracts
\n
\u00a0
\n
General
\n
\u00a0
\n
KBC applies all the requirements of IFRS 17 as from 1 January 2023.
\n
\u00a0
\n
Scope
\n
\u00a0
\n
In order to qualify as an insurance contract, the associated insurance risk must be significant even if the insured event is
\n
extremely unlikely to occur, for example catastrophic events such as earthquakes.
\n
Whether insurance risk is significant is assessed on initial recognition of each individual contract on a present value basis.
\n
In general, the following types of contracts within KBC are in scope of IFRS 17: Non-life insurance contracts, reinsurance
\n
contracts (accepted & ceded), Life insurance contracts being the non-unit-linked contracts, the unit-linked contracts, the
\n
hybrid products and investment contracts with discretionary participating features if issued by a KBC insurance entity.
\n
In general, the following\u00a0types of contracts are out of scope of IFRS 17: investment contracts without discretionary
\n
participating features (IFRS 9), most unit-linked contracts of KBC Insurance Belgium (IFRS 9) as these insurance contracts do
\n
not contain significant insurance risk, credit cards including certain cover issued by a KBC bank entity (IFRS 15), and roadside
\n
assistance contracts (IFRS 15).
\n
Distinct non-insurance components are separated from the insurance components in\u00a0the contract and thus accounted for
\n
in accordance with the\u00a0appropriate IFRS.
\n
\u00a0
\n
Level of aggregation\u00a0
\n
\u00a0
\n
IFRS 17 calculations are performed at an aggregated level, rather than contract by contract, taking into account the following
\n
four dimensions:
\n
\u2022\u00a0\u00a0IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);\u00a0
\n
\u2022\u00a0\u00a0Annual cohort (year of inception of the\u00a0policy);
\n
\u2022\u00a0\u00a0Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022\u00a0\u00a0Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\u00a0
\n
Aggregation by IFRS 17 portfolio
\n
IFRS 17 portfolios are country-specific and driven by the local product mix (similar risks) and the way in which the local
\n
insurance business is managed\u00a0(managed together). As a minimum, the portfolios are broken down into:
\n
\u2022\u00a0\u00a0Life
\n
- \u00a0Unit-linked\u00a0
\n
- \u00a0Non-unit-linked
\n
- \u00a0Hybrid products
\n
\u2022\u00a0\u00a0Non-life insurance
\n
- \u00a0Personal insurance
\n
- \u00a0Liabilities \u2013 MTPL
\n
- \u00a0Liabilities \u2013 other than\u00a0MTPL
\n
- \u00a0Property (including other) other than fully comprehensive
\n
- \u00a0Fully comprehensive\u00a0
\n
- \u00a0Accepted reinsurance
\n
\u2022\u00a0\u00a0Ceded reinsurance
\n
\u00a0
\n
Aggregation by annual cohort
\n
KBC applies annual cohorts (a cohort is a time bucket of contracts issued in the same year), aligned with the start and end
\n
of the financial year of KBC. On 23 November 2021, the EU published a Regulation endorsing IFRS 17 Insurance Contracts,
\n
including the amendments to the original IFRS 17 and a solution for the annual cohort requirement for certain types of
\n
insurance contracts, for use in the European Union. KBC will not apply the European optional exemption from the annual
\n
cohort requirement.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\u00a0
\n
BBA and VFA \u2013 Expected profitability on initial recognition
\n
For contracts measured according to the Building Block Approach (BBA, see below) and the Variable Fee Approach (VFA, see
\n
below), the allocation to the onerous, profitable or doubtful group of contracts (GoC) is determined based on the presence
\n
of a Contractual Service Margin (CSM is the unearned profit in the group of contracts at inception) under different risk
\n
adjustment levels (i.e. compensation for uncertainty in the amount and timing of future cashflows):
\n
\u2022\u00a0\u00a0If CSM < 0 when risk adjustment is calculated at a 75% confidence level,\u00a0the onerous group of contracts
\n
\u2022\u00a0\u00a0If CSM > 0 when risk adjustment is calculated at a 75% confidence\u00a0level AND
\n
- \u00a0if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, the doubtful group of contracts
\n
- \u00a0if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, the profitable group of contracts
\n
\u00a0
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA),\u00a0facts and circumstances indicating that\u00a0the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio exceeding 100%. This ratio differs from the externally
\n
published combined ratio. The IFRS 17 expected economic combined ratio is calculated for a set of contracts on an annual
\n
basis. Consequently, the new business of a year is assigned to one specific group of contracts under IFRS 17. In exceptional
\n
cases, when qualitative information reveals facts and circumstances indicating a negative trend in the IFRS 17 expected
\n
economic ratio, a recalculation is performed during the financial year.
\n
\u00a0
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous\u00a0profitability expectation. A set of contracts (SoC) is
\n
defined such that the conclusion on the expected profitability of the SoC and the associated classification (i.e. profitable,
\n
doubtful or onerous) equals the conclusion that would have been reached if the expected\u00a0profitability assessment had been
\n
carried out at the level of\u00a0the individual contract.
\n
\u00a0
\n
Recognition \u2013 derecognition
\n
\u00a0
\n
KBC recognises a group of\u00a0insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of contracts;
\n
\u2022\u00a0\u00a0The date when the first payment from a policyholder in the group becomes due;
\n
\u2022\u00a0\u00a0For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from\u00a0the policyholder is deemed\u00a0to be due when it is received.
\n
As time progresses in the cohort, new business can be added to a group of contracts if it meets\u00a0the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022\u00a0\u00a0The beginning of the coverage\u00a0period of the group of reinsurance contracts held;
\n
\u2022\u00a0\u00a0The date the entity recognises an onerous group of underlying insurance contracts, if the entity entered into the related
\n
ceded reinsurance contract in the group of reinsurance contracts held at or before that date.
\n
KBC delays the recognition of a group of\u00a0reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that\u00a0date is later than the beginning of\u00a0the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance\u00a0sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\u00a0
\n
Valuation
\n
\u00a0
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take\u00a0into account the insurance contract
\n
characteristics.
\n
\u2022\u00a0\u00a0The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022\u00a0\u00a0The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the\u00a0
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n

\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag860": { "value": "At the end of each reporting period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts are earned (i.e. recorded as insurance revenues).", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag827": { "value": "\n
Leasing
\n
\n
All leases are required to be classified as either finance leases or operating leases. The classification under IFRS 16 is based
\n
on the extent to which risk and rewards incidental to ownership of leased assets lie with the lessor or the lessee. A finance
\n
lease transfers substantially all the risks and rewards incidental to ownership of an asset.
\n
This classification is crucial for positions as a lessor, but less important for positions as a lessee, since both classifications
\n
result in similar recognition and measurement of the lease on the balance sheet and in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag828": { "value": "\n

\n\n

\n
Equity
\n
\n
Equity represents the residual interest in KBC\u2019s total assets after deduction of all its liabilities (referred to as \u2018net assets\u2019) and
\n
encompasses all shares issued by KBC, reserves attributable to the holders of the shares and minority interests.
\n
\n
KBC classifies all issued financial instruments as equity or as a financial liability based on the substance of the contractual
\n
arrangements. The critical feature that distinguishes a financial liability from a share is whether KBC has an unconditional
\n
right to avoid delivering cash or another financial asset to settle a contractual obligation.
\n
Minority interests represent the equity in a subsidiary that is not attributable to the holders of KBC shares. When the
\n
proportion of the equity held by the minority interests changes, KBC adjusts the carrying value of the controlling and minority
\n
interests to reflect changes in their relative interests in the consolidated companies. KBC recognises in equity any difference
\n
between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received,
\n
and allocates it to its controlling stake.
\n
\n\n
KBC can buy back its own shares within the legal framework. These treasury shares (ordinary shares) are initially recognised
\n
on the balance sheet on the transaction date under the \u2018treasury shares\u2019 heading. The acquisition price (including transaction
\n
costs) is deducted from equity. The dividend income from \u2018treasury shares\u2019 is recognised in equity.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag829": { "value": "\n

\n
Equity
\n
\n
Equity represents the residual interest in KBC\u2019s total assets after deduction of all its liabilities (referred to as \u2018net assets\u2019) and
\n
encompasses all shares issued by KBC, reserves attributable to the holders of the shares and minority interests.
\n
\n
KBC classifies all issued financial instruments as equity or as a financial liability based on the substance of the contractual
\n
arrangements. The critical feature that distinguishes a financial liability from a share is whether KBC has an unconditional
\n
right to avoid delivering cash or another financial asset to settle a contractual obligation.
\n
Minority interests represent the equity in a subsidiary that is not attributable to the holders of KBC shares. When the
\n
proportion of the equity held by the minority interests changes, KBC adjusts the carrying value of the controlling and minority
\n
interests to reflect changes in their relative interests in the consolidated companies. KBC recognises in equity any difference
\n
between the amount by which the minority interests are adjusted and the fair value of the consideration paid or received,
\n
and allocates it to its controlling stake.
\n
\n\n
KBC can buy back its own shares within the legal framework. These treasury shares (ordinary shares) are initially recognised
\n
on the balance sheet on the transaction date under the \u2018treasury shares\u2019 heading. The acquisition price (including transaction
\n
costs) is deducted from equity. The dividend income from \u2018treasury shares\u2019 is recognised in equity.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Business combinations are accounted for using the acquisition method. Under this method, the cost of an acquisition is
\n
measured as the aggregate of the consideration transferred (measured at acquisition-date fair value) and the amount of
\n
any minority interests in the acquired entity. For measurement of the minority interests, KBC can decide for each business
\n
combination separately whether to measure the minority interest at fair value or as its proportionate share of the acquired
\n
entity\u2019s net identifiable assets. The way the minority interest is measured on the acquisition date will have an impact on
\n
purchase accounting as a result of the determination of goodwill.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag862": { "value": "\n
KBC can buy back its own shares within the legal framework. These treasury shares (ordinary shares) are initially recognised
\n
on the balance sheet on the transaction date under the \u2018treasury shares\u2019 heading. The acquisition price (including transaction
\n
costs) is deducted from equity. The dividend income from \u2018treasury shares\u2019 is recognised in equity.
\n

\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag830": { "value": "\n

\n\n

\n

\n
Employee benefits
\n
\n\n

\n\n
Short-term employee benefits
\n
\n
Short-term employee benefits, such as salaries, paid absences, performance-related cash awards and social security
\n
contributions, are recognised over the period in which the employees provide the corresponding services. The related
\n
expenses are presented in the income statement as \u2018Operating expenses\u2019 under the \u2018Staff expenses\u2019 heading.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
Post-employment benefits
\n
\n
KBC offers its employees pension schemes in the form of defined contribution or defined benefit plans. Under the defined
\n
contribution plans, KBC\u2019s statutory or constructive obligation is limited to the amount that it agrees to contribute to the fund.
\n
The amount of the post-employment benefit to be received by the employee is determined by the amount of the
\n
contributions paid by KBC and the employee into the post-employment benefit plan, as well as by the investment returns
\n
arising from those contributions. The actuarial risk is borne by the employee.
\n
Conversely, under the defined benefit plans, KBC\u2019s obligation is to provide the agreed benefits to current and former
\n
employees and, in substance, the actuarial risk and investment risk fall on KBC. This means that if, from an actuarial or
\n
investment viewpoint, things turn out worse than expected, KBC\u2019s obligation may be increased.
\n
In Belgium, defined contribution plans have a legally guaranteed minimum return and the actual return can be lower than
\n
the legally required return. In addition, these plans have defined benefit plan features and KBC treats them as defined benefit
\n
plans.
\n
Liabilities under the defined benefit plans and the Belgian defined contribution plans (or pension liabilities) are included under
\n
\u2018Other liabilities\u2019 and relate to the obligations for retirement and survivor\u2019s pensions, early retirement benefits and similar
\n
pensions and annuities.
\n
The pension obligations for employees under the defined benefit plans are calculated using the projected-unit-credit
\n
method, with each period of service granting additional entitlement to pension benefits.
\n
Actuarial valuations are performed every reporting period. The defined benefit liabilities are discounted using rates
\n
equivalent to the yields on high-quality corporate bonds that are denominated in the currency in which the benefits will be
\n
paid and that have a maturity similar to the related pension liabilities.
\n\n
Changes in the net defined benefit liability/asset, apart from cash movements, are grouped into three main categories and
\n
recognised in operating expenses (service costs), interest expenses (net interest costs) and other comprehensive income
\n
(remeasurements).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag831": { "value": "\n

\n

\n
Employee benefits
\n
\n\n

\n\n
Short-term employee benefits
\n
\n
Short-term employee benefits, such as salaries, paid absences, performance-related cash awards and social security
\n
contributions, are recognised over the period in which the employees provide the corresponding services. The related
\n
expenses are presented in the income statement as \u2018Operating expenses\u2019 under the \u2018Staff expenses\u2019 heading.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
Post-employment benefits
\n
\n
KBC offers its employees pension schemes in the form of defined contribution or defined benefit plans. Under the defined
\n
contribution plans, KBC\u2019s statutory or constructive obligation is limited to the amount that it agrees to contribute to the fund.
\n
The amount of the post-employment benefit to be received by the employee is determined by the amount of the
\n
contributions paid by KBC and the employee into the post-employment benefit plan, as well as by the investment returns
\n
arising from those contributions. The actuarial risk is borne by the employee.
\n
Conversely, under the defined benefit plans, KBC\u2019s obligation is to provide the agreed benefits to current and former
\n
employees and, in substance, the actuarial risk and investment risk fall on KBC. This means that if, from an actuarial or
\n
investment viewpoint, things turn out worse than expected, KBC\u2019s obligation may be increased.
\n
In Belgium, defined contribution plans have a legally guaranteed minimum return and the actual return can be lower than
\n
the legally required return. In addition, these plans have defined benefit plan features and KBC treats them as defined benefit
\n
plans.
\n
Liabilities under the defined benefit plans and the Belgian defined contribution plans (or pension liabilities) are included under
\n
\u2018Other liabilities\u2019 and relate to the obligations for retirement and survivor\u2019s pensions, early retirement benefits and similar
\n
pensions and annuities.
\n
The pension obligations for employees under the defined benefit plans are calculated using the projected-unit-credit
\n
method, with each period of service granting additional entitlement to pension benefits.
\n
Actuarial valuations are performed every reporting period. The defined benefit liabilities are discounted using rates
\n
equivalent to the yields on high-quality corporate bonds that are denominated in the currency in which the benefits will be
\n
paid and that have a maturity similar to the related pension liabilities.
\n\n
Changes in the net defined benefit liability/asset, apart from cash movements, are grouped into three main categories and
\n
recognised in operating expenses (service costs), interest expenses (net interest costs) and other comprehensive income
\n
(remeasurements).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Provisions, contingent liabilities and contingent assets
\n
\n
Provisions are recognised on the reporting date if and only if the following criteria are met:
\n
\u2022 There is a present obligation (legal or constructive) due to a past event;
\n
\u2022 It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
\n
\u2022 A reliable estimate can be made of the amount of the obligation.
\n
\n
The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the balance
\n
sheet date. When the effect of time is material, the amount recognised as a provision is the net present value of the best
\n
estimate.
\n
Due to its inherent nature, a provision requires management judgement regarding the amount and timing of probable future
\n
economic outflows.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag832": { "value": "\n

\n\n
Short-term employee benefits
\n
\n
Short-term employee benefits, such as salaries, paid absences, performance-related cash awards and social security
\n
contributions, are recognised over the period in which the employees provide the corresponding services. The related
\n
expenses are presented in the income statement as \u2018Operating expenses\u2019 under the \u2018Staff expenses\u2019 heading.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the net defined benefit liability/asset, apart from cash movements, are grouped into three main categories and
\n
recognised in operating expenses (service costs), interest expenses (net interest costs) and other comprehensive income
\n
(remeasurements).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Levies
\n
\n
Public authorities can impose various levies on KBC. The size of the levies can depend on the amount of revenue (mainly
\n
interest income) generated by KBC, the amount of deposits accepted from clients, and the total balance sheet volume,
\n
including corrections based on certain, specific ratios. In accordance with IFRIC 21, levies are recognised when the obligating
\n
event that gives rise to recognition of the liability has occurred as stated in the relevant legislation. Depending on the
\n
obligating event, levies can be recognised at a single point in time or over time. Most of the levies imposed on KBC have to
\n
be recognised at a single point in time, which is mainly the beginning of the financial year. KBC recognises levies under
\n
\u2018Operating expenses\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDepreciation charges, impairment losses and gains or losses on disposal are recognised under \u2018Operating expenses\u2019 in the income statement, with the exception of assets that are leased under operating leases (KBC as a lessor), for which the costs are recognised in \u2018Other net income\u2019.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag833": { "value": "\n
Short-term employee benefits
\n
\n
Short-term employee benefits, such as salaries, paid absences, performance-related cash awards and social security
\n
contributions, are recognised over the period in which the employees provide the corresponding services. The related
\n
expenses are presented in the income statement as \u2018Operating expenses\u2019 under the \u2018Staff expenses\u2019 heading.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Levies
\n
\n
Public authorities can impose various levies on KBC. The size of the levies can depend on the amount of revenue (mainly
\n
interest income) generated by KBC, the amount of deposits accepted from clients, and the total balance sheet volume,
\n
including corrections based on certain, specific ratios. In accordance with IFRIC 21, levies are recognised when the obligating
\n
event that gives rise to recognition of the liability has occurred as stated in the relevant legislation. Depending on the
\n
obligating event, levies can be recognised at a single point in time or over time. Most of the levies imposed on KBC have to
\n
be recognised at a single point in time, which is mainly the beginning of the financial year. KBC recognises levies under
\n
\u2018Operating expenses\u2019.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag834": { "value": "\n

\n\n
Net fee and commission income
\n
\n
Most net fee and commission income falls under the scope of IFRS 15 (Revenue from Contracts with Customers), as it relates
\n
to the services that KBC provides to its clients and is outside the scope of other IFRS standards. For the recognition of revenue,
\n
KBC identifies the contract and defines the promises (performance obligations) in the transaction. Revenue is recognised only
\n
when KBC has satisfied the performance obligation.
\n
The revenue presented under \u2018Securities and asset management\u2019 falls under the scope of IFRS 15 and, in principle, entails
\n
KBC keeping assets in a trust for the beneficiary (\u2018fund\u2019) and being responsible for investing the amounts received from clients
\n
to their benefit. These transactions are straightforward, because KBC provides a series of distinct services which clients use
\n
at the same time when receiving the benefits. In return, KBC receives a monthly or quarterly management fee, which is
\n
calculated as a fixed percentage of the net asset value, or a subscription fee retained from the beneficiary. The fees do not
\n
include a variable component.
\n
Revenue reported as \u2018Margin on life insurance investment contracts without DPF\u2019 represents the amount realised on
\n
investment contracts without a discretionary participation feature, i.e. a fixed percentage or fixed amount is withheld from
\n
the client\u2019s payments, enabling the insurance company to cover its expenses.
\n
Payment services, where KBC charges clients for certain current-account transactions, domestic or foreign payments,
\n
payment services provided through ATMs, etc., are usually settled when the actual transaction is carried out, enabling the
\n
relevant fee to be recognised directly at that time.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag835": { "value": "\n
Net fee and commission income
\n
\n
Most net fee and commission income falls under the scope of IFRS 15 (Revenue from Contracts with Customers), as it relates
\n
to the services that KBC provides to its clients and is outside the scope of other IFRS standards. For the recognition of revenue,
\n
KBC identifies the contract and defines the promises (performance obligations) in the transaction. Revenue is recognised only
\n
when KBC has satisfied the performance obligation.
\n
The revenue presented under \u2018Securities and asset management\u2019 falls under the scope of IFRS 15 and, in principle, entails
\n
KBC keeping assets in a trust for the beneficiary (\u2018fund\u2019) and being responsible for investing the amounts received from clients
\n
to their benefit. These transactions are straightforward, because KBC provides a series of distinct services which clients use
\n
at the same time when receiving the benefits. In return, KBC receives a monthly or quarterly management fee, which is
\n
calculated as a fixed percentage of the net asset value, or a subscription fee retained from the beneficiary. The fees do not
\n
include a variable component.
\n
Revenue reported as \u2018Margin on life insurance investment contracts without DPF\u2019 represents the amount realised on
\n
investment contracts without a discretionary participation feature, i.e. a fixed percentage or fixed amount is withheld from
\n
the client\u2019s payments, enabling the insurance company to cover its expenses.
\n
Payment services, where KBC charges clients for certain current-account transactions, domestic or foreign payments,
\n
payment services provided through ATMs, etc., are usually settled when the actual transaction is carried out, enabling the
\n
relevant fee to be recognised directly at that time.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag836": { "value": "\n

\n
Income tax
\n
\n
Income tax consists of three items, namely taxes paid/payable over the reporting period, underprovisioning/overprovisioning
\n
in previous years, and changes in deferred tax assets/deferred tax liabilities. It is accounted for either in the income
\n
statement or in other comprehensive income, depending on where the items that triggered the tax are recorded. Income
\n
taxes that are initially accounted for in other comprehensive income and that relate to gains or losses that are subsequently
\n
recognised in the income statement are recycled to the income statement in the same period in which that item is accounted
\n
for in the income statement.
\n
\n
Deferred and current tax assets and liabilities are offset when there is both a legal right of offset and the intention to settle
\n
on a net basis or to realise the asset and settle the liability simultaneously.
\n
\n
Current tax assets/liabilities
\n
\n
Current tax for the period is measured at the amount expected to be paid to or recovered from the tax authorities, using the
\n
rates of tax in effect during the reporting period.
\n
\n\n
Deferred tax assets/liabilities
\n
\n
Deferred tax liabilities are recognised for all taxable temporary differences between the carrying value of an asset or liability
\n
and its tax base. They are measured using the tax rates that are substantively enacted at the reporting date and expected
\n
to be in effect on realisation of the assets or settlement of the liabilities to which they relate and that reflect the tax
\n
consequences following from the manner in which the entity expects to recover or settle the carrying value of the underlying
\n
asset or liability at the balance sheet date.
\n
Deferred tax assets are recognised for all deductible temporary differences between the carrying value of assets and
\n
liabilities and their tax base, as well as for the carry forward of unused tax losses and unused tax credits, to the extent that
\n
it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. KBC
\n
calculates deferred tax assets to carry forward unused tax losses. When estimating the period over which tax losses can be
\n
set off against future taxable profits, KBC uses projections for a period of eight to ten years.
\n
Deferred tax assets/liabilities that relate to business combinations are recorded directly in goodwill.
\n
Deferred tax assets/liabilities are not discounted.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag837": { "value": "\n
Deferred tax assets/liabilities
\n
\n
Deferred tax liabilities are recognised for all taxable temporary differences between the carrying value of an asset or liability
\n
and its tax base. They are measured using the tax rates that are substantively enacted at the reporting date and expected
\n
to be in effect on realisation of the assets or settlement of the liabilities to which they relate and that reflect the tax
\n
consequences following from the manner in which the entity expects to recover or settle the carrying value of the underlying
\n
asset or liability at the balance sheet date.
\n
Deferred tax assets are recognised for all deductible temporary differences between the carrying value of assets and
\n
liabilities and their tax base, as well as for the carry forward of unused tax losses and unused tax credits, to the extent that
\n
it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. KBC
\n
calculates deferred tax assets to carry forward unused tax losses. When estimating the period over which tax losses can be
\n
set off against future taxable profits, KBC uses projections for a period of eight to ten years.
\n
Deferred tax assets/liabilities that relate to business combinations are recorded directly in goodwill.
\n
Deferred tax assets/liabilities are not discounted.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag838": { "value": "\n

\n\n

\n\n
Property and equipment
\n
\n
Property and equipment are recognised initially at cost (including directly allocable acquisition costs). KBC subsequently
\n
measures property and equipment at the initial cost less accumulated depreciation and impairment. The rates of
\n
depreciation are determined on the basis of the estimated useful life of the assets and are applied according to the straight-
\n
line method from the moment the assets are available for use. Property and equipment are derecognised upon disposal or
\n
when the relevant asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.
\n
Gains or losses upon derecognition are recognised in the income statement in the period in which derecognition occurs.
\n
Property and equipment are subject to impairment testing when there is an indication that the asset might have been
\n
impaired.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Depreciation charges, impairment losses and gains or losses on disposal are recognised under \u2018Operating expenses\u2019 in the
\n
income statement, with the exception of assets that are leased under operating leases (KBC as a lessor), for which the costs
\n
are recognised in \u2018Other net income\u2019. Where a disposal falls within the definition of a discontinued operation, the net results
\n
are reported in a single line in the income statement (see \u2018Discontinued operations\u2019 below).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag839": { "value": "\n

\n\n
Property and equipment
\n
\n
Property and equipment are recognised initially at cost (including directly allocable acquisition costs). KBC subsequently
\n
measures property and equipment at the initial cost less accumulated depreciation and impairment. The rates of
\n
depreciation are determined on the basis of the estimated useful life of the assets and are applied according to the straight-
\n
line method from the moment the assets are available for use. Property and equipment are derecognised upon disposal or
\n
when the relevant asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.
\n
Gains or losses upon derecognition are recognised in the income statement in the period in which derecognition occurs.
\n
Property and equipment are subject to impairment testing when there is an indication that the asset might have been
\n
impaired.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Depreciation charges, impairment losses and gains or losses on disposal are recognised under \u2018Operating expenses\u2019 in the
\n
income statement, with the exception of assets that are leased under operating leases (KBC as a lessor), for which the costs
\n
are recognised in \u2018Other net income\u2019. Where a disposal falls within the definition of a discontinued operation, the net results
\n
are reported in a single line in the income statement (see \u2018Discontinued operations\u2019 below).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n
Note 5.4: Property and equipment and investment property
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Property and equipment3 2162 989
Investment property485571
Rental income5350
Direct operating expenses from investments generating rental income1515
Direct operating expenses from investments not generating rental income11
\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Land and ITOtherTotal property
MOVEMENTS TABLEbuildingsequipmentequipmentand equipmentInvestment property
2023
Opening balance1 3731301 4862 989571
Acquisitions1065383098834
Disposals-240-242-266-82
Depreciation-119-62-25-206-31
Other movements-301-260-289-7
Closing balance1 3061221 7893 216485
accumulated depreciation and impairment1 5854799152 979308
Fair value733
2022
Opening balance1 4791171 4543 050518
Acquisitions376847057585
Disposals-30-1-204-235-13
Depreciation-120-60-25-205-31
Other movements76-209-19612
Closing balance1 3731301 4862 989571
accumulated depreciation and impairment1 5704468762 892376
Fair value\u2013\u2013\u2013\u2013827
\n\n\n
\n\n
\u2022 Annual rates of depreciation: mainly 3% for buildings (including investment property), 33% for IT equipment, between 5% and
\n
33% for other equipment. No depreciation is charged for land.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There was a small amount (around 0.4 billion euros) for commitments for the acquisition of property and equipment. There are
\n
no material restrictions on title, or on property and equipment pledged as security for liabilities.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
building and construction, state of repair, use, etc.).
\n
\u2022 Certain other investment property is valued annually by in-house specialists based on the current annual rental per building
\n
and expected rental movements and on an individual capitalisation rate per building.
\n
\u2022 The impact of the heavy flooding and other extreme weather conditions in 2023 and 2022 on property and equipment and
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
regarding climate-related and other ESG risks, see the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The impact of our own activities as a bank-insurer on the environment is very limited, especially when compared to industrial
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
See \u2018Focus the on the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed
\n
explanation (the statutory auditor has not audited this section). More details can also be found in our Climate Report and our
\n
Sustainability Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag840": { "value": "\n
Property and equipment
\n
\n
Property and equipment are recognised initially at cost (including directly allocable acquisition costs). KBC subsequently
\n
measures property and equipment at the initial cost less accumulated depreciation and impairment. The rates of
\n
depreciation are determined on the basis of the estimated useful life of the assets and are applied according to the straight-
\n
line method from the moment the assets are available for use. Property and equipment are derecognised upon disposal or
\n
when the relevant asset is permanently withdrawn from use and no future economic benefits are expected from its disposal.
\n
Gains or losses upon derecognition are recognised in the income statement in the period in which derecognition occurs.
\n
Property and equipment are subject to impairment testing when there is an indication that the asset might have been
\n
impaired.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Depreciation charges, impairment losses and gains or losses on disposal are recognised under \u2018Operating expenses\u2019 in the
\n
income statement, with the exception of assets that are leased under operating leases (KBC as a lessor), for which the costs
\n
are recognised in \u2018Other net income\u2019. Where a disposal falls within the definition of a discontinued operation, the net results
\n
are reported in a single line in the income statement (see \u2018Discontinued operations\u2019 below).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Investment property
\n
\n
Investment property is defined as a property built, purchased or acquired by KBC under a finance lease and is held to earn
\n
rentals or for the purpose of capital appreciation rather than being used by KBC for the provision of services or for
\n
administrative purposes.
\n
Investment property is initially recognised at cost (including directly attributable costs). KBC subsequently measures it at the
\n
initial cost less accumulated depreciation and impairment.
\n
The depreciation charge is recognised under \u2018Other net income\u2019 in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Annual rates of depreciation: mainly 3% for buildings (including investment property), 33% for IT equipment, between 5% and
\n
33% for other equipment. No depreciation is charged for land.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag841": { "value": "\n

\n\n
Investment property
\n
\n
Investment property is defined as a property built, purchased or acquired by KBC under a finance lease and is held to earn
\n
rentals or for the purpose of capital appreciation rather than being used by KBC for the provision of services or for
\n
administrative purposes.
\n
Investment property is initially recognised at cost (including directly attributable costs). KBC subsequently measures it at the
\n
initial cost less accumulated depreciation and impairment.
\n
The depreciation charge is recognised under \u2018Other net income\u2019 in the income statement.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag842": { "value": "\n

\n\n

\n\n

\n\n

\n\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Goodwill is the excess of the cost of the acquisition over the acquirer\u2019s interest in the fair value of the identifiable assets
\n
acquired and liabilities and contingent liabilities assumed at the date of acquisition. In order to complete the acquisition
\n
accounting and determine the goodwill item, KBC applies a measurement period of 12 months. The classification of the
\n
financial assets acquired and financial liabilities assumed in the business combination is based on the facts and
\n
circumstances existing at the acquisition date (except for lease and insurance contracts, which are classified on the basis of
\n
the contractual terms and other factors at the inception of the relevant contract).
\n
Goodwill is presented under \u2018Goodwill and other intangible assets\u2019 and is carried at cost less impairment losses. Goodwill is
\n
not amortised, but is tested for impairment at least once a year or when there is objective evidence (external or internal) that
\n
it should be impaired. If the acquisition accounting is not complete because the 12-month measurement period has not
\n
elapsed, the goodwill is not considered as final and is only tested if there is objective evidence that the provisional goodwill
\n
is impaired.
\n
For the purpose of testing goodwill for impairment, it is allocated to each of KBC\u2019s cash-generating units that are expected
\n
to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquired entity are
\n
assigned to those units. An impairment loss is recognised if the carrying value of the cash-generating unit to which the
\n
goodwill belongs exceeds its recoverable amount. Impairment losses on goodwill cannot be reversed.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag843": { "value": "\n

\n\n

\n\n

\n\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag844": { "value": "\n

\n\n

\n\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n

\n

\n
Note 5.5: Goodwill and other intangible assets
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Discount rates throughout the specific period
Goodwill outstanding31-12-202331-12-2022of cashflow projections
(in millions of EUR)31-12-202331-12-2022
K&H Bank18117315.2% \u2013 13.7%17.3% \u2013 13.3%
\u010cSOB (Czech Republic)25225913.0% \u2013 12.8%13.9% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna 6617613.0% \u2013 12.8%13.2% \u2013 12.8%
United Bulgarian Bank54654413.3% \u2013 12.5%12.5% \u2013 12.2%
DZI Insurance757511.2% \u2013 10.4%10.5% \u2013 8.1%
KBC Commercial Finance212112.0%9.9%
Pension Insurance Company UBB56568.3% \u2013 8.4%9.3% \u2013 9.1%
Rest4242\u2013\u2013
Total1 2401 346\u2013\u2013
\n\n\n\n\n\n\n\n
\n
\u2022 The period to which the cashflow budgets and projections relate is 10 years in most cases. This longer period is used to take
\n
account of current strong growth in the Central and Eastern European countries, where the growth rate is expected to
\n
develop towards a more moderate level in the longer term.
\n
\u2022 The growth rate used to extrapolate the cashflow projections after that period is equal to the expected long-term growth
\n
rate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2023 (also between
\n
3.2% and 4.7% in 2022).
\n
\u2022 No sensitivity analysis was carried out for entities where the recoverable amount exceeded the carrying value to such a large
\n
extent that no reasonably possible change in the key assumptions would result in the recoverable amount being less than or
\n
equal to the carrying value. The table gives an indication for the other entities of the impact of reasonable changes in the key
\n
assumptions on goodwill impairment.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sensitivity to reasonable changes1.0% increase1.0% increase5% decrease
(in millions of EUR)* in discount ratein targeted solvency ratioin annual net profit
United Bulgarian Bank-164-109-98
\u010cSOB Stavebn\u00ed sporitelna-9-9-12
* The impact of the changes is calculated ceteris paribus.
\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag845": { "value": "\n

\n\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag846": { "value": "\n

\n
Intangible assets
\n
\n
Intangible assets include goodwill, software developed in-house, software developed externally and other intangible assets.
\n
Intangible assets can be (i) acquired as part of a business combination transaction (see \u2018Business combinations and goodwill\u2019
\n
below), (ii) acquired separately or (iii) developed internally.
\n
\n
Separately acquired intangible assets (mainly software developed externally) are initially recognised at cost. Internally
\n
developed intangible assets (mainly software developed in-house) are recognised only if they arise from development and
\n
KBC can demonstrate:
\n
\u2022 the technical feasibility of completing them;
\n
\u2022 an intention to complete for use or sale;
\n
\u2022 an ability to use or sell them;
\n
\u2022 how the intangible assets will generate future economic benefits;
\n
\u2022 the availability of adequate technical, financial and other resources to complete the development and to use or sell the
\n
intangible assets;
\n
\u2022 reliable measurement of the expenditure attributable to the intangible assets during their development.
\n
\n
Internally generated intangible assets are initially measured at the development costs directly attributable to the design and
\n
testing of the unique software controlled by KBC.
\n
Directly attributable costs capitalised as part of the software developed in-house include software development employee
\n
costs and directly attributable overheads.
\n
Research expenses, other development expenditure, costs associated with maintaining software and investment projects
\n
(large-scale projects introducing or replacing an important business objective or model) that do not meet the recognition
\n
criteria are recognised as an expense in the period they are incurred.
\n
\n\n
Intangible assets are subsequently carried at cost less accumulated amortisation and accumulated impairment losses.
\n
Amortisation begins when the asset is available for use as intended by management. Software is amortised as follows:
\n
\u2022 System software (initial purchased software forming an integral part with hardware) is amortised at the same rate as
\n
hardware.
\n
\u2022 Standard software and customised software developed by a third party or developed in-house are amortised over five
\n
years according to the straight-line method from the time the software is available for use.
\n
\u2022 Core systems (typically including deposit account processing, loan and credit processing, interfaces to the general ledger
\n
and reporting tools) are amortised according to the straight-line method over a minimum period of eight years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag847": { "value": "\n

\n\n
Impairment of non-financial assets
\n
\n
When KBC prepares financial statements, it ensures that the carrying value of the non-financial asset does not exceed the
\n
amount that could be obtained from either using or selling it (\u2018recoverable amount\u2019). Property and equipment, investment
\n
property and software are subject to the impairment review only when there is objective evidence of impairment. Goodwill
\n
and intangible assets with an indefinite useful life are subject to impairment reviews at least annually and also reviewed for
\n
impairment indicators every quarter.
\n
Indications that an impairment loss is required may stem from either an internal source (e.g., the condition of the asset) or an
\n
external source (e.g., new technology or a significant decline in the asset\u2019s market value).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
When an impairment indicator is present, KBC reviews the asset\u2019s recoverable amount and the asset is impaired if its
\n
recoverable amount is lower than its carrying value at the reporting date. The recoverable amount is defined as the higher
\n
of the value in use and the fair value less cost to sell.
\n
Value in use is defined as the discounted future cashflows expected to be derived from an asset or a cash-generating unit.
\n
Impairment is borne at individual asset level, but when the individual asset does not generate cash inflows that are largely
\n
independent of those from other assets or groups of assets, the recoverable amount is determined for the so-called \u2018cash-
\n
generating unit\u2019 (CGU) to which the asset or group of assets belongs. In forming the CGUs, KBC applies its own judgement to
\n
define the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows
\n
from other assets or groups of assets. This process mainly applies to goodwill that has been recognised in relation to
\n
acquisitions.
\n
Impairment losses are recognised in the income statement for the period in which they occur. An impairment loss can be
\n
reversed if the condition that triggered it is no longer present, except for goodwill, which can never be reversed. Impairment
\n
gains are recognised in the income statement for the period in which they occur.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag848": { "value": "\n

\n\n
Provisions, contingent liabilities and contingent assets
\n
\n
Provisions are recognised on the reporting date if and only if the following criteria are met:
\n
\u2022 There is a present obligation (legal or constructive) due to a past event;
\n
\u2022 It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
\n
\u2022 A reliable estimate can be made of the amount of the obligation.
\n
\n
The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the balance
\n
sheet date. When the effect of time is material, the amount recognised as a provision is the net present value of the best
\n
estimate.
\n
Due to its inherent nature, a provision requires management judgement regarding the amount and timing of probable future
\n
economic outflows.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag849": { "value": "\n
Consolidated financial statements / interim financial statements
\n
\n
All material entities (including structured entities) over which KBC exercises direct or indirect control as defined in IFRS 10 are
\n
consolidated according to the method of full consolidation. Changes in ownership interests (that do not result in a loss of
\n
control) are accounted for as equity transactions. They do not affect goodwill or profit or loss.
\n
\n
Subsidiaries that are not included in the consolidated financial statements because of immateriality are classified as equity
\n
instruments at fair value through other comprehensive income, with all fair value changes being reported in other
\n
comprehensive income, except for dividend income, which is recognised in the income statement. Material companies over
\n
which joint control is directly or indirectly exercised and material investments in associates (companies over which KBC has
\n
significant influence) are all accounted for using the equity method.
\n
\n
Consolidation threshold: subsidiaries are effectively included in the consolidated financial statements using the full
\n
consolidation method if at least two of the following materiality criteria are exceeded:
\n
\u2022 Group share in equity is 2 500 000 euros;
\n
\u2022 Group share in the result is 1 000 000 euros (absolute value);
\n
\u2022 Group share in the balance sheet total is 100 000 000 euros.
\n
In order to prevent too many entities from being excluded, KBC checks that the combined balance sheet total of the entities
\n
excluded from consolidation does not amount to more than 1% of the consolidated balance sheet total.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag850": { "value": "\n

\n
Business combinations and goodwill
\n
\n\n

\n\n
Business combinations are accounted for using the acquisition method. Under this method, the cost of an acquisition is
\n
measured as the aggregate of the consideration transferred (measured at acquisition-date fair value) and the amount of
\n
any minority interests in the acquired entity. For measurement of the minority interests, KBC can decide for each business
\n
combination separately whether to measure the minority interest at fair value or as its proportionate share of the acquired
\n
entity\u2019s net identifiable assets. The way the minority interest is measured on the acquisition date will have an impact on
\n
purchase accounting as a result of the determination of goodwill.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag851": { "value": "\n

\n\n
Business combinations are accounted for using the acquisition method. Under this method, the cost of an acquisition is
\n
measured as the aggregate of the consideration transferred (measured at acquisition-date fair value) and the amount of
\n
any minority interests in the acquired entity. For measurement of the minority interests, KBC can decide for each business
\n
combination separately whether to measure the minority interest at fair value or as its proportionate share of the acquired
\n
entity\u2019s net identifiable assets. The way the minority interest is measured on the acquisition date will have an impact on
\n
purchase accounting as a result of the determination of goodwill.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag852": { "value": "\n
Goodwill is the excess of the cost of the acquisition over the acquirer\u2019s interest in the fair value of the identifiable assets
\n
acquired and liabilities and contingent liabilities assumed at the date of acquisition. In order to complete the acquisition
\n
accounting and determine the goodwill item, KBC applies a measurement period of 12 months. The classification of the
\n
financial assets acquired and financial liabilities assumed in the business combination is based on the facts and
\n
circumstances existing at the acquisition date (except for lease and insurance contracts, which are classified on the basis of
\n
the contractual terms and other factors at the inception of the relevant contract).
\n
Goodwill is presented under \u2018Goodwill and other intangible assets\u2019 and is carried at cost less impairment losses. Goodwill is
\n
not amortised, but is tested for impairment at least once a year or when there is objective evidence (external or internal) that
\n
it should be impaired. If the acquisition accounting is not complete because the 12-month measurement period has not
\n
elapsed, the goodwill is not considered as final and is only tested if there is objective evidence that the provisional goodwill
\n
is impaired.
\n
For the purpose of testing goodwill for impairment, it is allocated to each of KBC\u2019s cash-generating units that are expected
\n
to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquired entity are
\n
assigned to those units. An impairment loss is recognised if the carrying value of the cash-generating unit to which the
\n
goodwill belongs exceeds its recoverable amount. Impairment losses on goodwill cannot be reversed.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag853": { "value": "\n

\n\n
Effects of changes in foreign exchange rates
\n
\n
KBC\u2019s functional and presentation currency is the euro. Monetary assets and liabilities denominated in foreign currency are
\n
translated into the functional currency at the spot rate on the balance sheet date. Negative and positive valuation
\n
differences, except for those relating to the funding of equity instruments and investments of consolidated companies in a
\n
foreign currency, are recognised in the income statement. Non-monetary items measured at historical cost are translated
\n
into the functional currency at the historical exchange rate that existed on the transaction date. Non-monetary items carried
\n
at fair value are translated at the spot rate on the date the fair value was determined. Translation differences are reported
\n
together with changes in fair value. Income and expense items in foreign currency are taken to the income statement at the
\n
exchange rate prevailing when they were recognised.
\n
\n
Valuation differences are accounted for either in the income statement or in other comprehensive income. Valuation
\n
differences that are initially accounted for in other comprehensive income and that relate to gains or losses that are
\n
subsequently recognised in the income statement are recycled to the income statement in the same period in which that
\n
item is accounted for in the income statement. The balance sheets of foreign subsidiaries are translated into the presentation
\n
currency at the spot rate on the reporting date (except for equity, which is translated at the historical rate). The income
\n
statement is translated at the average rate for the financial year as a best estimate of the exchange rate on the transaction
\n
date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Main exchange rates used*
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Exchange rate at 31-12-2023 Exchange rate average in 2023
Change relative to Change relative to
31-12-2022 average in 2022
1 EUR = \u2026 (positive: appreciation relative to EUR) 1 EUR = \u2026 (positive: appreciation relative to EUR)
\u2026 currency (negative: depreciation relative to EUR) \u2026 currency (negative: depreciation relative to EUR)
CZK 24.724 -2% 23.946 +3%
HUF 382.80 +5% 381.33 +3%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
* Rounded figures.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag861": { "value": "KBC\u2019s functional and presentation currency is the euro. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency at the spot rate on the balance sheet date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag854": { "value": "\n
Related-party transactions
\n
\n
A party related to KBC is either a party over which KBC has control or significant influence or a party that has control or
\n
significant influence over KBC. KBC defines its related parties as:
\n
\u2022 KBC subsidiaries, KBC associates and joint ventures, KBC Ancora, Cera and MRBB;
\n
\u2022 KBC key management staff (i.e. the Board of Directors and the Executive Committee of KBC Group NV).
\n
\n
Transactions with related parties must occur at arm\u2019s length.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag855": { "value": "\n

\n
Non-current assets held for sale and disposal groups, liabilities associated with disposal groups and discontinued operations
\n
\n\n
Non-current assets held for sale and disposal groups, liabilities associated with disposal groups
\n
\n
Non-current assets or groups of assets and liabilities held for sale are those where the carrying value will be recovered by
\n
KBC through a sale transaction, which is expected to qualify as a sale within a year, rather than through continued use. Non-
\n
current assets and liabilities held for sale are reported separately from the other assets and liabilities in the balance sheet at
\n
the end of the reporting date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Discontinued operations
\n
\n
A discontinued operation refers to a part of KBC that has been disposed of or is classified as held for sale and:
\n
\u2022 represents a separate major line of business or geographical area of operations; or
\n
\u2022 is part of a single, coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\n
\u2022 is a subsidiary acquired exclusively with a view to resale.
\n
\n
Results from discontinued operations are recognised separately in the income statement and in other comprehensive income
\n
and contain:
\n
\u2022 the post-tax profit or loss of discontinued operations; and
\n
\u2022 the post-tax gain or loss recognised on the measurement to fair value less the costs of the sale or disposal of the assets
\n
or group of assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag856": { "value": "\n
Non-current assets held for sale and disposal groups, liabilities associated with disposal groups
\n
\n
Non-current assets or groups of assets and liabilities held for sale are those where the carrying value will be recovered by
\n
KBC through a sale transaction, which is expected to qualify as a sale within a year, rather than through continued use. Non-
\n
current assets and liabilities held for sale are reported separately from the other assets and liabilities in the balance sheet at
\n
the end of the reporting date.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag857": { "value": "\n
Discontinued operations
\n
\n
A discontinued operation refers to a part of KBC that has been disposed of or is classified as held for sale and:
\n
\u2022 represents a separate major line of business or geographical area of operations; or
\n
\u2022 is part of a single, coordinated plan to dispose of a separate major line of business or geographical area of operations; or
\n
\u2022 is a subsidiary acquired exclusively with a view to resale.
\n
\n
Results from discontinued operations are recognised separately in the income statement and in other comprehensive income
\n
and contain:
\n
\u2022 the post-tax profit or loss of discontinued operations; and
\n
\u2022 the post-tax gain or loss recognised on the measurement to fair value less the costs of the sale or disposal of the assets
\n
or group of assets.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag858": { "value": "\n
Events after the reporting period
\n
\n
Events after the reporting date are defined as favourable or unfavourable events that occur between the reporting date and
\n
the date on which the financial statements are authorised for issue. There are two types of event after the reporting date:
\n
\u2022 Those which provide evidence of conditions that existed on the reporting date (adjusting events);
\n
\u2022 Those that are indicative of conditions that arose after the reporting date (non-adjusting events).
\n
\n
The impact of adjusting events has already been reflected in the financial position and financial performance for the current
\n
year. The impact and consequences of non-adjusting events are disclosed in the notes to the financial statements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "kbc:DescriptionOfAccountingPolicyForEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag859": { "value": "\n

\n\n
Note 1.5: IFRS 17 transition
\n
\n
Background information
\n
\n
On 1 January 2023, the new accounting rules for the recognition, measurement and presentation of insurance contracts (IFRS
\n
17) are mandatory for the reporting period beginning on 1 January 2023, replacing IFRS 4. The reference figures of 2022 in this
\n
report have been restated accordingly. IFRS 17 applies to all types of insurance contracts, regardless of the type of entities
\n
that issue them, as well as to financial instruments with discretionary participation features. The overall objective of IFRS 17 is
\n
to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the
\n
requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a
\n
comprehensive model for insurance contracts, covering all relevant accounting aspects. For more information, see \u2018Summary
\n
of material accounting policies\u2019 in this report.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Impact of the first-time adoption of IFRS 17 on 1 January 2022
\n
\n
The full net impact (after tax) on parent shareholders\u2019 equity of the transition to IFRS 17, including the reclassification of
\n
financial assets (IFRS 9), came to -673 million euros as a result of:
\n
\u2022 IFRS 17 valuation differences: the negative impact on equity (-1 485 million euros before tax; -1 102 million euros after tax)
\n
caused by the transition to IFRS 17 is attributable to the Life business (-1 857 million euros before tax), partly offset by the
\n
Non-life business (+372 million euros before tax).
\n
\u2022 The first-time adoption of IFRS 17 also permits a reclassification of financial assets available to the insurance companies in
\n
order to avoid an accounting mismatch between assets and liabilities. As a result, bonds in the amount of 5 234 million
\n
euros were transferred from \u2018Financial assets at amortised cost\u2019 to \u2018Financial assets at FVOCI\u2019, whereas bonds in the
\n
opposite direction amounted to 2 235 million euros. This translated into a positive net impact after tax of 428 million euros
\n
on equity. As a general principle, KBC has decided to classify bonds used to hedge Life insurance liabilities as FVOCI, and
\n
bonds used to hedge Non-life insurance liabilities as amortised cost (90%) and FVOCI (10%).
\n
\u2022 The first-time adoption of IFRS 17 also resulted in the abolition of \u2018Financial assets at fair value \u2013 overlay approach\u2019, leading
\n
to a transfer of shares in the amount of 1 366 million euros to \u2018Financial assets at fair value through OCI\u2019 (FVOCI). The transfer
\n
does not have a net impact on equity, but it does result in a shift from \u2018Retained earnings\u2019 (-71 million euros, pertaining to
\n
impairment recognised in the past) and the \u2018Revaluation reserve (FVPL equity instruments) \u2013 overlay approach\u2019 (496 million
\n
euros) to the \u2018Revaluation reserve (FVOCI equity instruments)\u2019.
\n
\n
For more information, see note 6.10 in the 2022 annual report.
\n
\n
FY 2022 restated figures for IFRS 17
\n
\n
As a consequence of the IFRS 17 implementation, the income statement of KBC Group, being an integrated bank-insurer, has
\n
been updated to include the new items introduced by IFRS 17 (e.g., insurance revenues, insurance finance income and
\n
expense, and insurance service expenses). Other income statement line items that were related to IFRS 4 have been excluded
\n
or are presented differently.
\n
\n
The full net impact on the result after tax of 2022 due to the restatement to IFRS 17, including the reclassification of financial
\n
assets (IFRS 9), came to +75 million euros, as a result of:
\n
\u2022 IFRS 17 valuation differences: the positive impact on the result after tax (+223 million euros before tax) caused by the
\n
transition to IFRS 17 is attributable to the Life business (+166 million euros before tax) and the Non-life business (+57 million
\n
euros before tax).
\n
\u2022 The abolition of \u2018Financial assets at fair value \u2013 overlay approach\u2019 (leading to a transfer of the equity instruments to FVOCI)
\n
had a negative impact on the result before tax of 2022 of -86 million euros, as realized gains and impairments on these
\n
transferred equity instruments are no longer transferred to the income statement.
\n
\u2022 Deferred income tax on these items: -62 million euros.
\n
\n
Parent shareholders\u2019 equity per 31 December 2022 under IFRS 17 came to 20 319 million euros, +1 012 million euros compared
\n
to parent shareholders\u2019 equity under IFRS 4 on the same date, as a result of (all amounts after tax):
\n
\u2022 Impact of the first-time adoption of IFRS 17 on 1 January 2022: -673 million euros.
\n
\u2022 Difference between the result after tax of 2022 under IFRS 17 compared to IFRS 4: +75 million euros (see above)
\n
\u2022 Correction for the result of the overlay approach: +86 million euros, as this result is excluded under IFRS 17 (hence is part o
\n
f
\n
the +75 million euros difference in result after tax) but has no net impact on equity since it is now included directly in equity
\n
without transferring to the income statement.
\n
\u2022 Impact on OCI of -744 million euros in 2022 of reclassified bonds transferred from \u2018Financial assets at amortised cost\u2019 to
\n
\u2018Financial assets at fair value through OCI\u2019, mainly accounted for by higher interest rates.
\n
\u2022 Increase in insurance finance income and expense through OCI after reinsurance by +2 269 million euros in 2022, mainly
\n
accounted for by higher interest rates.
\n
\n
For more information, see the press release issued on 18 April 2023 at www.kbc.com.
\n

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Note 3.6: Insurance results
\n\n

\n\n

\n\n

\n\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
\n
\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
\n
- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
\n
fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
\n
\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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\n\n

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\n\n
Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Investment result (OCI) on financial assets at FVOCI 595 1 49 0 644
Change in Insurance finance income and expense \u2013 OCI, before -538-1-23\u2014-561
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -537 0-23\u2014-560
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under -1-1\u2014\u2014-1
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI 56 0 25 0 81
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7\u2014 7
Deferred taxes\u2014\u2014\u201413 13
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 3313101
2022
Investment result (OCI) on financial assets at FVOCI-2 716-2-236-26-2 979
Change in insurance finance income and expense \u2013 OCI, before 2 6151424\u20133 039
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, 2 6130424\u20133 037
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 11\u2013\u20131
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI-1020188-2660
Change in reinsurance finance income and expense \u2013 OCI0\u2013-25\u2013-25
Deferred taxes\u2013\u2013\u2013-106-106
Net insurance and investment result after reinsurance, after tax \u2013 OCI-1020164-132-71
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the \u2018Effect
\n
of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019. This is the result of a
\n
decision by KBC to categorise a large part of the bond portfolio backing Life insurance contracts and part of the bond portfolio
\n
backing Non-life insurance contracts as FVOCI assets, resulting in a natural hedge between investment results on financial
\n
assets at FVOCI and IFIE through OCI.
\n
\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
\n
\u2022 In addition to the investment result of the financial assets recognised in profit or loss (Note 3.6.1) and in OCI (Note 3.6.2), results
\n
realised on FVOCI equity instruments are recognised directly in equity (see \u2018Transfer from revaluation reserves to retained
\n
earnings upon realisation\u2019 in \u2018Consolidated statement of changes in equity\u2019). The corresponding figures for 2023 and 2022 were
\n
24 million euros and 133 million euros, respectively, at insurance level of the 21 million euros and 152 million euros at group level.
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Note 3.6.3: Insurance revenues (Life and Non-life) by component
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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Note 3.6.4: Life insurance sales
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(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
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\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
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under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
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commission income\u2019.
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\u2022 Hybrid products: see Note 5.6.1.
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Note 3.6.5: Non-life insurance profitability by product (P&L)
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Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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Note 5.6: Insurance \u2013 balance sheet
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Note 5.6.1: Breakdown of (re)insurance contract assets and liabilities
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(in millions of EUR)20232022
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 00\u2014\u201400\u2013\u2013
Insurance contract liabilities 13 8625512 87892813 4445212 600792
LRC (liability for remaining coverage)13 674212 76291013 268212 491775
Unit-linked7980\u20147986750\u2013675
Non-unit-linked12 651212 650\u201412 383212 3810
Hybrid22501121122100110100
Accepted reinsurance00000000
LIC (liability for incurred claims)18853116181765010917
Unit-linked130\u201413120\u201312
Non-unit-linked1535399\u20141425092\u2013
Hybrid210174220175
Accepted reinsurance00000000
Assets for acquisition cost00000000
Non-life
Reinsurance assets6464\u2014\u20145555\u2013\u2013
Insurance contract liabilities2 9222 716206\u20142 7142 462252\u2013
LRC (liability for remaining coverage)701512190\u2014676439238\u2013
Personal insurance20516190\u201425316238\u2013
Motor Third-Party Liability (MTPL)160160\u2014\u2014145145\u2013\u2013
Liabilities other than MTPL2525\u2014\u20142424\u2013\u2013
Casco9696\u2014\u20148181\u2013\u2013
Property other than casco216216\u2014\u2014173173\u2013\u2013
Accepted reinsurance000\u2014-1-10\u2013
LIC (liability for incurred claims)2 2202 20416\u20142 0382 02414\u2013
Personal insurance61059416\u201454453014\u2013
Motor Third-Party Liability (MTPL)863863\u2014\u2014771771\u2013\u2013
Liabilities other than MTPL357357\u2014\u2014358358\u2013\u2013
Casco5353\u2014\u20144242\u2013\u2013
Property other than casco 319319\u2014\u2014306306\u2013\u2013
Accepted reinsurance18180\u201417170\u2013
Assets for acquisition cost000\u2014000\u2013
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\u2022 Insurance contract liabilities relate to insurance contracts and investment contracts with a discretionary participation feature
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(DPF). Liabilities under investment contracts without DPF are measured at fair value. They concern unit-linked contracts, which
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are recognised under financial liabilities (see Note 4.1).
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\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
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are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
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that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
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assumptions are:
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- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
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mortality tables and adapted where necessary to reflect the group\u2019s own experience.
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- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
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overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
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incurred as a consequence of performing insurance activities for in-force contracts.
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- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
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is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
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for the entire group.
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\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
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and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
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court awards, le
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g
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islation and discountin
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g
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.
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\u2022 For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
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services, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on the
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individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate level of
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service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided
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for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
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\u2022 Coverage units have a positive value and are floored to zero. In case of zero coverage units in a given period, no CSM is
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allocated to P&L as no services have been provided in the period. This is possible, for instance, where contracts provide for
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\u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but there is a mandatory waiting period for
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the client to be able to benefit from insurance coverage.
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\u2022 Defining IFRS 17 portfolios is a local decision, made by each insurance entity of KBC Group. It is country-specific, driven by the
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local product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown
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by product.
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\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance
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risk, from the unit-linked to the non-unit-linked component and vice versa.
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\u2022 Non-life LRC BBA (238 million euros in 2022, 190 million euros in 2023) represents the LRC health insurance (as part of personal
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insurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for
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personal insurance (530 million euros in 2022, 594 million euros in 2023) represents the incurred claims under personal insurance
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with regard to \u2018workmen\u2019s compensation\u2019 insurance, which are typically settled over a long period.
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\u2022 Most reinsurance programmes protect against the impact of exceptionally large loss events or accumulation of losses.
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Therefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the
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movements in reinsurance contract assets are limited.
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\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these
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bottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one
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with volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other liabilities for which
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bottom-up curves are used).
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Yield curve used to discount cashflows not varying based on underlying items; bottom-up method
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CurrencyIlliquidity premiumPortfolio duration
1 year5 years10 years20 years
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment2.92%2.29%2.74%2.13%
CZKwith volatility adjustment4.83%3.19%3.70%3.98%
without volatility adjustment4.67%3.03%3.54%3.82%
HUFwith volatility adjustment5.55%5.25%6.29%5.49%
without volatility adjustment5.44%5.14%6.18%5.38%
BGNwith volatility adjustment3.16%2.50%3.00%2.43%
without volatility adjustment3.16%2.50%3.00%2.43%
2022
EURwith volatility adjustment4.77%3.26%3.36%1.87%
without volatility adjustment4.56%3.05%3.15%1.69%
CZKwith volatility adjustment7.92%4.46%4.51%6.04%
without volatility adjustment7.61%4.16%4.21%5.70%
HUFwith volatility adjustment13.96%7.21%8.52%9.40%
without volatility adjustment13.77%7.04%8.34%9.22%
BGNwith volatility adjustment5.27%3.57%3.67%1.97%
without volatility adjustment5.27%3.57%3.67%1.97%
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Note 5.6.2: Movements in Life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\u2022 When transitioning from IFRS 4 to IFRS 17, KBC applied the Full Retrospective Approach (FRA) for recent years. Applying the FRA
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for non-recent years is impracticable due to either a lack of historical data (data and hypotheses) or high costs associated
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with making information from the past available for FRA transition calculations. Where the FRA is impracticable, the Fair Value
\n
Approach (FVA) was predominantly used to determine the CSM on the transition date. The Modified Retrospective Approach
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(MRA) is rarely applied as this transition approach is overly complex and the costs do not outweigh the benefits. KBC calculates
\n
a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently adjusts a few assumptions or parameters.
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The adjustments relate to the inclusion in the IFRS 13 fair value of total expenses, i.e. including non-directly attributable
\n
expenses, and to the inclusion of a risk premium that covers not only non-financial risk, but also system and integration
\n
expenses and capital funding costs. All past years are combined into a single cohort for the FVA transition calculations. The
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FVA CSM ensues from cost and risk margin differences under IFRS 17 and IFRS 13 measurement approaches. The OCI amount
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on the transition date under the FVA is determined in accordance with the transition exemptions provided in IFRS 17.
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\u2022 Movement in insurance liabilities in 2023:
\n
- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised as
\n
KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income and
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expense between P&L and OCI.
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- The movement in the investment component of 1 284 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
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\u2022 Movement in insurance liabilities 2022:
\n
- Due to the increase in market interest rates during 2022, a gain in OCI of 2 614 million euros before tax is recognised as KBC
\n
made the accounting policy choice for all portfolios within the group to disaggregate IFIE between P&L and OCI. The Life
\n
insurance service result was positively impacted by a net reversal of loss component for an amount of 67 million euros.
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- The movement in the investment component of 1 606 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
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\u2022 On transitioning to IFRS 17, KBC applied mainly the fair value approach. Therefore, the amortised acquisition costs are low as
\n
they are not estimated under the fair value approach (i.e. the prospective approach).
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\u2022 The Life insurance contracts are typically long-term contracts and are therefore measured according to the BBA or VFA. The
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latter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold
\n
contracts mandatorily contain insurance risk cover.
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\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, which are repayable under all
\n
circumstances and as such include an investment component. For defining the investment component, an investigation based
\n
on the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life
\n
insurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered
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an investment component. Any associated surrender fees resulting from surrender are considered insurance components.
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Note 5.6.3: Movements in Non-life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\u2022 In Non-life, KBC applies mostly the PAA, as the coverage period is 1 year or less.
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\u2022 The cost of outstanding claims is based on the past claims development experience to project future claims development.
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These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling
\n
costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
\n
are mainly analysed per accident year. Large claims are separately addressed.
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\u2022 Estimates of salvage recoveries and subrogation reimbursement are considered in the measurement of the ultimate claim
\n
costs.
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\u2022 No asset for insurance acquisition cashflows is currently recognised.
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Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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Present value Risk
of future adjustment Total insurance
cashflows (incl. (incl. LIC)contract
(in millions of EUR)LIC)Contractual service marginliabilities
Insurance
contracts that Insurance
existed at the contracts that
transition date, existed at the
modified transition date, Other
retrospective fair value insurance
approach approach contracts
2023
Opening balance11 378112451 37748013 393
Insurance service result-39047-18198-139
Changes that relate to future service-3995641202245
New business-16117\u2013\u20131506
Changes in estimates reflected in the CSM -23839412074-1
Changes in estimates that result in onerous contract 00\u2013\u2013\u20130
losses and reversals
Changes that relate to current service38-8-5-113-26-113
CSM recognised in P&L0\u2013-5-113-26-143
Changes in the risk adjustment (expected)0-8\u2013\u2013\u2013-8
Experience adjustments38\u2013\u2013\u2013\u201338
Changes to liabilities for incurred claims related to past -29-2\u2013\u2013\u2013-30
service
Insurance finance income and expense809-7197818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income41840016205679
Total cashflows-252\u2013\u2013\u2013\u2013-252
Premiums received1 371\u2013\u2013\u2013\u20131 371
Claims paid-1 404\u2013\u2013\u2013\u2013-1 404
Costs other than claims paid-92\u2013\u2013\u2013\u2013-92
Acquisition costs paid-126\u2013\u2013\u2013\u2013-126
Other changes-7-12-6-1-14
Closing balance11 538152471 38768313 807
2022
Opening balance15 4261105598121516 787
Insurance service result-8314-7382263-189
Changes that relate to future service-84213-2476288-67
New business-12614\u2013\u201313523
Changes in estimates reflected in the CSM-6260-24761520
Changes in estimates that result in onerous contract -900\u2013\u2013\u2013-90
losses and reversals
Changes that relate to current service33-8-5-94-24-98
CSM recognised in P&L\u2013\u2013-5-94-24-123
Changes in the risk adjustment (expected)\u2013-8\u2013\u2013\u2013-8
Experience adjustments33\u2013\u2013\u2013\u201333
Changes to liabilities for incurred claims related to past -23-2\u2013\u2013\u2013-25
service
Insurance finance income and expense-2 519-2161-2 513
In P&L83216192
In OCI-2 602-4\u2013\u2013\u2013-2 606
Total changes in comprehensive income-3 3501-7389264-2 702
Total cashflows-700\u2013\u2013\u2013\u2013-700
Premiums received1 231\u2013\u2013\u2013\u20131 231
Claims paid-1 742\u2013\u2013\u2013\u2013-1 742
Costs other than claims paid-84\u2013\u2013\u2013\u2013-84
Acquisition costs paid-105\u2013\u2013\u2013\u2013-105
Other changes21-3718
Closing balance11 378112451 37748013 393
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
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\u25e6 Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by the
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insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity of the
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benefits provided to the policyholder under a contract and its expected coverage period.
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\u25e6 Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected to be
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provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current period.
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\u2022 Main movements in 2023: there were no material exceptional movements.
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\u2022 Main movements in 2022: the net movement in the loss component amounted to 67 million euros and was mainly explained by
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(i) new business in the year 2022 for which a loss component of -24 million euros was recognised and (ii) a reversal of loss
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component of 90 million euros due to increasing interest rates, resulting in a higher margin expected to be earned on future
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premiums. The increasing interest rates were also the main reason for the increase of 626 million euros in the CSM, as more
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margin was expected to be earned on future premiums.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value Risk
of future adjustment
cashflows (incl. (incl. LIC)Total insurance
(in millions of EUR)LIC)Contractual service margincontract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2023
Opening balance17759367252
Insurance service result1116-417-7
Changes that relate to future service919-38100
New business-181\u2013170
Changes in estimates reflected in the CSM2717-38-70
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service2-3-3-4-7
CSM recognised in P&L\u2013\u2013-3-4-6
Changes in the risk adjustment (expected)\u2013-3\u2013\u2013-3
Experience adjustments2\u2013\u2013\u20132
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-29-1901-48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income-17-4-417-54
Total cashflows8\u2013\u2013\u20138
Premiums received43\u2013\u2013\u201343
Claims paid-24\u2013\u2013\u2013-24
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-7\u2013\u2013\u2013-7
Other changes00000
Closing balance8715274206
2022
Opening balance1361179636386
Insurance service result-36-3-331-11
Changes that relate to future service-3612340
New business-181\u2013170
Changes in estimates reflected in the CSM-1902170
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service0-4-5-3-11
CSM recognised in P&L\u2013\u2013-5-3-8
Changes in the risk adjustment (expected)\u2013-4\u2013\u2013-4
Experience adjustments0\u2013\u2013\u20130
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-93-3900-132
In P&L-1000-2
In OCI-92-39\u2013\u2013-131
Total changes in comprehensive income-129-42-330-144
Total cashflows9\u2013\u2013\u20139
Premiums received39\u2013\u2013\u201339
Claims paid-20\u2013\u2013\u2013-20
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-6\u2013\u2013\u2013-6
Other changes00000
Closing balance17759367252
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\u2022 In Non-life, the BBA is applied to \u2018individual health insurance\u2019.
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\u2022 The decline recognised in insurance finance income and expense through OCI of 48 million euros in 2023 is accounted for by
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the increase in the discount curve in the long term (more than 20 years). The decline of 131 million euros in 2022 is attributable
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to the sharp increase in the discount curve during the first half of the year. A typical feature of the hospitalisation portfolio is
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that interest rate movements have a greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums
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are levelled (constant \u2018cash in\u2019 during the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019
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more towards the end of the contract).
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Note 5.6.6: New business (BBA/VFA)
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(Re)insurance (Re)insurance
(in millions of EUR)contracts issuedcontracts acquiredTotal
Not onerousOnerousNot onerousOnerous
2023
Estimates of present value of cash outflows1 194212001 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows-1 378-20700-1 585
Risk adjustment for non-financial risk1620018
Contractual service margin166-00166
Increase in insurance contract liabilities: loss component\u20137\u201307
2022
Estimates of present value of cash outflows781440001 221
Expected claims657375001 032
Expected other insurance service expenses41430084
Insurance acquisition cashflows832200105
Estimates of present value of cash inflows-946-41900-1 365
Risk adjustment for non-financial risk1230015
Contractual service margin152\u20130\u2013152
Increase in insurance contract liabilities: loss component\u201324\u2013024
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\u2022 In 2022, the low interest-rate environment at the beginning of the year mainly explained the sale of onerous business. Increasing
\n
interest rates improved the overall profitability of new business (insurance and the financial margin) during the year.
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Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (BBA/VFA)
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CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR)1st year2nd year3rd year4th year5th year6-10th year+10th year
2023
Life149142135129122529973
Non-life666652451
2022
Life123118113109105471928
Non-life887773062
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\u2022 The table shows the future CSM recognition for the next 25 years.
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Note 5.6.8: Fair value of assets backing insurance and investment contracts
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
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Note 5.6.9: Changes in accumulated OCI for FVOCI assets related to insurance contracts for which the fair value transition
\n
approach is used
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(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while maintaining
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the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between covering
\n
financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently the years
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thereafter until the portfolio subject to the transition approach reaches maturity.
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However, following the first-time adoption of
\n
IFRS 17 a large part of the bond portfolio of KBC Insurance was transferred to FVOCI (see Note 1.6 for more information), resulting
\n
in a very limited imbalance in 2022 and 2023.
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag863": { "value": "\n
Note 1.5: IFRS 17 transition
\n
\n
Background information
\n
\n
On 1 January 2023, the new accounting rules for the recognition, measurement and presentation of insurance contracts (IFRS
\n
17) are mandatory for the reporting period beginning on 1 January 2023, replacing IFRS 4. The reference figures of 2022 in this
\n
report have been restated accordingly. IFRS 17 applies to all types of insurance contracts, regardless of the type of entities
\n
that issue them, as well as to financial instruments with discretionary participation features. The overall objective of IFRS 17 is
\n
to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the
\n
requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a
\n
comprehensive model for insurance contracts, covering all relevant accounting aspects. For more information, see \u2018Summary
\n
of material accounting policies\u2019 in this report.
\n

\n\n\n
Impact of the first-time adoption of IFRS 17 on 1 January 2022
\n
\n
The full net impact (after tax) on parent shareholders\u2019 equity of the transition to IFRS 17, including the reclassification of
\n
financial assets (IFRS 9), came to -673 million euros as a result of:
\n
\u2022 IFRS 17 valuation differences: the negative impact on equity (-1 485 million euros before tax; -1 102 million euros after tax)
\n
caused by the transition to IFRS 17 is attributable to the Life business (-1 857 million euros before tax), partly offset by the
\n
Non-life business (+372 million euros before tax).
\n
\u2022 The first-time adoption of IFRS 17 also permits a reclassification of financial assets available to the insurance companies in
\n
order to avoid an accounting mismatch between assets and liabilities. As a result, bonds in the amount of 5 234 million
\n
euros were transferred from \u2018Financial assets at amortised cost\u2019 to \u2018Financial assets at FVOCI\u2019, whereas bonds in the
\n
opposite direction amounted to 2 235 million euros. This translated into a positive net impact after tax of 428 million euros
\n
on equity. As a general principle, KBC has decided to classify bonds used to hedge Life insurance liabilities as FVOCI, and
\n
bonds used to hedge Non-life insurance liabilities as amortised cost (90%) and FVOCI (10%).
\n
\u2022 The first-time adoption of IFRS 17 also resulted in the abolition of \u2018Financial assets at fair value \u2013 overlay approach\u2019, leading
\n
to a transfer of shares in the amount of 1 366 million euros to \u2018Financial assets at fair value through OCI\u2019 (FVOCI). The transfer
\n
does not have a net impact on equity, but it does result in a shift from \u2018Retained earnings\u2019 (-71 million euros, pertaining to
\n
impairment recognised in the past) and the \u2018Revaluation reserve (FVPL equity instruments) \u2013 overlay approach\u2019 (496 million
\n
euros) to the \u2018Revaluation reserve (FVOCI equity instruments)\u2019.
\n
\n
For more information, see note 6.10 in the 2022 annual report.
\n
\n
FY 2022 restated figures for IFRS 17
\n
\n
As a consequence of the IFRS 17 implementation, the income statement of KBC Group, being an integrated bank-insurer, has
\n
been updated to include the new items introduced by IFRS 17 (e.g., insurance revenues, insurance finance income and
\n
expense, and insurance service expenses). Other income statement line items that were related to IFRS 4 have been excluded
\n
or are presented differently.
\n
\n
The full net impact on the result after tax of 2022 due to the restatement to IFRS 17, including the reclassification of financial
\n
assets (IFRS 9), came to +75 million euros, as a result of:
\n
\u2022 IFRS 17 valuation differences: the positive impact on the result after tax (+223 million euros before tax) caused by the
\n
transition to IFRS 17 is attributable to the Life business (+166 million euros before tax) and the Non-life business (+57 million
\n
euros before tax).
\n
\u2022 The abolition of \u2018Financial assets at fair value \u2013 overlay approach\u2019 (leading to a transfer of the equity instruments to FVOCI)
\n
had a negative impact on the result before tax of 2022 of -86 million euros, as realized gains and impairments on these
\n
transferred equity instruments are no longer transferred to the income statement.
\n
\u2022 Deferred income tax on these items: -62 million euros.
\n
\n
Parent shareholders\u2019 equity per 31 December 2022 under IFRS 17 came to 20 319 million euros, +1 012 million euros compared
\n
to parent shareholders\u2019 equity under IFRS 4 on the same date, as a result of (all amounts after tax):
\n
\u2022 Impact of the first-time adoption of IFRS 17 on 1 January 2022: -673 million euros.
\n
\u2022 Difference between the result after tax of 2022 under IFRS 17 compared to IFRS 4: +75 million euros (see above)
\n
\u2022 Correction for the result of the overlay approach: +86 million euros, as this result is excluded under IFRS 17 (hence is part o
\n
f
\n
the +75 million euros difference in result after tax) but has no net impact on equity since it is now included directly in equity
\n
without transferring to the income statement.
\n
\u2022 Impact on OCI of -744 million euros in 2022 of reclassified bonds transferred from \u2018Financial assets at amortised cost\u2019 to
\n
\u2018Financial assets at fair value through OCI\u2019, mainly accounted for by higher interest rates.
\n
\u2022 Increase in insurance finance income and expense through OCI after reinsurance by +2 269 million euros in 2022, mainly
\n
accounted for by higher interest rates.
\n
\n
For more information, see the press release issued on 18 April 2023 at www.kbc.com.
\n

\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag452": { "value": "\n

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2.0 Notes on segment reporting
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Note 2.1: Segment reporting based on the management structure
\n
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Detailed information on the group\u2019s management structure and the results per segment can be found in the \u2018Our business
\n
units\u2019 section (which has not been audited by the statutory auditor). Based on IFRS 8, KBC has identified the Executive
\n
Committee and Board of Directors as \u2018chief operating decision-makers\u2019, responsible for allocating the resources and
\n
assessing the performance of the different parts of the company. The operating segments are based on the internal financial
\n
reporting to those policy bodies and on the location of the company\u2019s activities, resulting in geographical segmentation.
\n
\n
The three operating segments are (essentially):
\n
\u2022 the Belgium Business Unit (all activities in Belgium);
\n
\u2022 the Czech Republic Business Unit (all activities in the Czech Republic);
\n
\u2022 the International Markets Business Unit (activities in Hungary, Slovakia and Bulgaria, reported together in accordance with
\n
IFRS 8.16).
\n
For reporting purposes, there is also a Group Centre (comprising the results of the holding company, items that have not
\n
been allocated to the other business units, and the results of companies to be divested \u2013 including KBC Bank Ireland, where
\n
the sale of the loan and deposit portfolios was finalised in February 2023).
\n
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\n
Segment reporting
\n
\n
\u2022 The policy bodies analyse the performance of the segments based on a number of criteria, with the \u2018Result after tax\u2019 being
\n
the most important results indicator. The segment data is based entirely on IFRS data (with no adjustments).
\n
\u2022 In principle, we assign a group company in its entirety to one specific segment/business unit. Exceptions are only made for
\n
those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of loans
\n
(such items are recognised under Group Centre).
\n
\u2022 We allocate the funding cost of participating interests to the Group Centre. Any funding cost in respect of leveraging at
\n
KBC Group NV level is also recognised under Group Centre.
\n
\u2022 Transactions among the different segments are reported at arm\u2019s length.
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\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
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\u2022 We do not provide any information on income from sales to external clients per group of products or services, since the
\n
information is prepared at consolidated level chiefly for each business unit, and not per client group or product group.
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\u2022 For information on the acquisition of Raiffeisenbank Bulgaria in 2022 and the sale of KBC Bank Ireland\u2019s loan and deposit
\n
portfolios in 2022 and 2023, see Note 6.6.
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Note 2.2: Results by segment
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Czech International
Belgium Republic Markets Of which
(in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Ireland KBC Group
INCOME STATEMENT FOR 2023
Net interest income 3 248 1 271 1 179 529 254 396 -225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 189 96 189 14 0 2 679
Non-life 1 387 459 420 169 79 172 14 0 2 280
Life 250 96 53 20 17 16 0 0 399
Dividend income 53 0 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss -22 132 125 97 6 22 88 -4 322
Net fee and commission income 1 537 324 493 260 84 149 -6 -1 2 349
Insurance finance income and expense (for insurance contracts issued) -175 -68 -70 -46 -5 -19 0 0 -313
Other net income 235 5 15 -3 11 6 400 409 656
TOTAL INCOME 6 512 2 220 2 216 1 026 446 744 276 467 11 224
Operating expenses (excluding directly attributable to insurance contracts) a-2 532 -865 -962 -463 -229 -270 -256 -112 -4 616
Total operating expenses excluding bank and insurance tax-2 463-916-805-275 -250 -281 -254-107 -4 438
Bank and insurance tax-361-60-262-238 -4 -20 -4-4 -687
Less: operating expenses attributed to insurance service expenses29211110449 25 30 20 509
Insurance service expenses before reinsurance -1 285 -420 -414 -186 -90 -139 -1 0 -2 120
Of which insurance commissions paid -220-65-55-12 -10 -33 -10 -340
Non-life-1 116-368-384-173 -80 -131 -10 -1 870
Of which Non-life claim-related expenses-734-213-211-85 -51 -75 20 -1 157
Life-169-52-30-12 -10 -8 00 -251
Net result from reinsurance contracts held -63 -16 -15 -3 1 -13 4 0 -90
Impairment -114 -57 -36 -38 6 -4 -7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 7019 11 8 0 8 9 16
Share in results of associated companies and joint ventures -3 -1 0 0 0 0 0 0 -4
RESULT BEFORE TAX 2 515 860 789 336 134 318 15 354 4 179
Income tax expense -650 -97 -112 -51 -30 -32 82 -24 -778
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 865 763 676 285 105 286 97 330 3 401
attributable to minority interests -1 0 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 866 763 676 285 105 286 97 330 3 402
a Of which non-cash expenses -64 -124 -102 -43 -25 -34 -101 -7 -391
Depreciation and amortisation of fixed assets -61 -122 -102 -43 -25 -34 -101 -7 -386
Other -4 -2 0 0 0 0 0 0 -5
Acquisitions of non-current assets* 867 163 216 118 57 42 146 0 1 392
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Czech International
(in millions of EUR) Belgium Republic Markets Of which
Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandKBCGroup
INCOME STATEMENT FOR 2022
Net interest income 2 8271 313 888 423 235 229 134 240 5 162
Insurance revenues before reinsurance 1 507 488 412 159 86 166 16 0 2 423
Non-life 1 269 401 365 141 70 153 16 0 2 050
Life 238 87 47 18 16 13 0 0 373
Dividend income 54 1 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss 57 133 70 60 33 -22 -8 -3 252
Net fee and commission income 1 512 282 429 228 82 119 -5 -2 2 218
Insurance finance income and expense (for insurance contracts issued) -131 -10 45 14 8 23 0 0 - 96
Other net income 213 -185 -7 -8-34-5 -8 16
TOTAL INCOME 6 039 2 023 1 837 876 441 520 136 228 10 035
Operating expenses (excluding directly attributable to insurance contracts)a-2360-815-816-409-226-181-337 -208 -4 327
Total operating expenses excluding bank and insurance tax-2 284-861-683-238-248-197-332-200-4159
Bank and insurance tax-349-61-228-211-7-10-8-8-646
Less: operating expenses attributed to insurance service expenses 273 107 95 40 29 26 30478
Insurance service expenses before reinsurance -1 174 -378 -347 -142-71-134-9 0 -1 908
Of which insurance commissions paid -198 -46 -63 -26 -8 -29 -1 0 -308
Non-life-1 084-327-314-130-59-125-90-1733
Of which Non-life claim-related expenses-711-190-170-60-33-77-60-1077
Life-90-51-33-12-12-900-174
Net result from reinsurance contracts held 21 -6 -14 -3-3-8-22 0 -20
Impairment -46-60-152-97-21-33-24 -18 -282
on financial assets at amortised cost and at fair value through OCI -35 -46 -78 -29 -19 -30 5 7 -154
Share in results of associated companies and joint ventures -9 -1 0 0 0 0 0 0 -10
RESULT BEFORE TAX 2 472 762 509 225 119 164 -254 3 3 488
Income tax expense -596-109-81-37-27-16 116 34 - 670
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 876 653 428 188 91 148 -139 37 2 818
attributable to minority interests 0 0 0 0 0 0 0 0 0
attributable to equity holders of the parent 1 876 653 428 188 91 148 -139 37 2 818
a Of which non-cash expenses -58-114-89-40-23-26-120 -31 -381
Depreciation and amortisation of fixed assets-57-114-86-38-23-24-117-26-374
Other 00-4-20-2-3-4-7
Acquisitions of non-current assets* 544 125 624 95 63 466 151 1 1 443
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Note 2.3: Balance-sheet information by segment
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The table below presents some of the main on-balance-sheet products by segment.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Czech
Belgium Republic International
Business Business Markets GroupOf which
(in millions of EUR)Unit UnitBusiness UnitHungarySlovakiaBulgaria Centre
\n\n		IrelandKBC Group
BALANCE SHEET AT 31-12-2023
Deposits from customers and debt securities 154 238 52 64231 6879 6108 83613 24120 9240259 491
(excluding repos)
Demand deposits (incl. special deposits 60 53123 37823 6596 6455 48011 53400107 568
and other deposits)
Time deposits19 65412 0586 3332 2522 3821 6990038 044
Savings accounts54 07415 2201 51663687280070 810
Debt securities19 979 1 98617976103020 924043 068
Loans and advances to customers 119 16836 47027 9756 76411 5899 62300183 613
(excluding reverse repos)
Term loans 62 57311 46311 6583 2793 4524 9270085 694
Mortgage loans45 39419 64110 4471 8186 4512 1780075 482
Other 11 2005 3665 8701 6671 6862 5170022 437
Liabilities under investment contracts13 461000000013 461
Insurance contract liabilities14 3151 2881 16241322652418016 784
Non-life2 204357343114581711802 922
Life12 1119318202991683530013 862
BALANCE SHEET AT 31-12-2022
Deposits from customers and debt securities 155 971 51 06929 9629 5158 42112 02615 743418252 746
(excluding repos)
Demand deposits (incl. special deposits 75 322 25 74723 5437 3035 82610 415418418125 030
and other deposits)
Time deposits8 8969 2114 2911 2911 4141 5860022 397
Savings accounts60 80214 3441 8337221 086250076 979
Debt securities10 951 1 76729520096015 325028 338
Loans and advances to customers 117 22135 44525 3845 87910 7968 70933178 053
(excluding reverse repos)
Term loans 61 76810 58110 5442 9703 0134 5612282 894
Mortgage loans44 32619 6969 6381 6816 1141 8430073 660
Other11 1275 1685 2021 2281 6682 3061121 498
Liabilities under investment contracts12 026000000012 026
Insurance contract liabilities13 9331 25895132121341716016 158
Non-life2 10131628185441531602 714
Life11 8329436692361692640013 444
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag453": { "value": "\n

\n
Note 2.1: Segment reporting based on the management structure
\n
\n
Detailed information on the group\u2019s management structure and the results per segment can be found in the \u2018Our business
\n
units\u2019 section (which has not been audited by the statutory auditor). Based on IFRS 8, KBC has identified the Executive
\n
Committee and Board of Directors as \u2018chief operating decision-makers\u2019, responsible for allocating the resources and
\n
assessing the performance of the different parts of the company. The operating segments are based on the internal financial
\n
reporting to those policy bodies and on the location of the company\u2019s activities, resulting in geographical segmentation.
\n
\n
The three operating segments are (essentially):
\n
\u2022 the Belgium Business Unit (all activities in Belgium);
\n
\u2022 the Czech Republic Business Unit (all activities in the Czech Republic);
\n
\u2022 the International Markets Business Unit (activities in Hungary, Slovakia and Bulgaria, reported together in accordance with
\n
IFRS 8.16).
\n
For reporting purposes, there is also a Group Centre (comprising the results of the holding company, items that have not
\n
been allocated to the other business units, and the results of companies to be divested \u2013 including KBC Bank Ireland, where
\n
the sale of the loan and deposit portfolios was finalised in February 2023).
\n
\n
\n
Segment reporting
\n
\n
\u2022 The policy bodies analyse the performance of the segments based on a number of criteria, with the \u2018Result after tax\u2019 being
\n
the most important results indicator. The segment data is based entirely on IFRS data (with no adjustments).
\n
\u2022 In principle, we assign a group company in its entirety to one specific segment/business unit. Exceptions are only made for
\n
those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of loans
\n
(such items are recognised under Group Centre).
\n
\u2022 We allocate the funding cost of participating interests to the Group Centre. Any funding cost in respect of leveraging at
\n
KBC Group NV level is also recognised under Group Centre.
\n
\u2022 Transactions among the different segments are reported at arm\u2019s length.
\n\n

\n\n

\n\n
\u2022 We recognise \u2018Net interest income\u2019 in the segment information without dividing it up into \u2018Interest income\u2019 and \u2018Interest
\n
expense\u2019. This is permitted under IFRS because the bulk of the business units\u2019 income is in the form of interest, and
\n
management assesses and co-ordinates those business units primarily on the basis of net interest income.
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\u2022 We do not provide any information on income from sales to external clients per group of products or services, since the
\n
information is prepared at consolidated level chiefly for each business unit, and not per client group or product group.
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\u2022 For information on the acquisition of Raiffeisenbank Bulgaria in 2022 and the sale of KBC Bank Ireland\u2019s loan and deposit
\n
portfolios in 2022 and 2023, see Note 6.6.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag454": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag455": { "value": "\n

\n\n
Note 2.2: Results by segment
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Czech International
Belgium Republic Markets Of which
(in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Ireland KBC Group
INCOME STATEMENT FOR 2023
Net interest income 3 248 1 271 1 179 529 254 396 -225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 189 96 189 14 0 2 679
Non-life 1 387 459 420 169 79 172 14 0 2 280
Life 250 96 53 20 17 16 0 0 399
Dividend income 53 0 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss -22 132 125 97 6 22 88 -4 322
Net fee and commission income 1 537 324 493 260 84 149 -6 -1 2 349
Insurance finance income and expense (for insurance contracts issued) -175 -68 -70 -46 -5 -19 0 0 -313
Other net income 235 5 15 -3 11 6 400 409 656
TOTAL INCOME 6 512 2 220 2 216 1 026 446 744 276 467 11 224
Operating expenses (excluding directly attributable to insurance contracts) a-2 532 -865 -962 -463 -229 -270 -256 -112 -4 616
Total operating expenses excluding bank and insurance tax-2 463-916-805-275 -250 -281 -254-107 -4 438
Bank and insurance tax-361-60-262-238 -4 -20 -4-4 -687
Less: operating expenses attributed to insurance service expenses29211110449 25 30 20 509
Insurance service expenses before reinsurance -1 285 -420 -414 -186 -90 -139 -1 0 -2 120
Of which insurance commissions paid -220-65-55-12 -10 -33 -10 -340
Non-life-1 116-368-384-173 -80 -131 -10 -1 870
Of which Non-life claim-related expenses-734-213-211-85 -51 -75 20 -1 157
Life-169-52-30-12 -10 -8 00 -251
Net result from reinsurance contracts held -63 -16 -15 -3 1 -13 4 0 -90
Impairment -114 -57 -36 -38 6 -4 -7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 7019 11 8 0 8 9 16
Share in results of associated companies and joint ventures -3 -1 0 0 0 0 0 0 -4
RESULT BEFORE TAX 2 515 860 789 336 134 318 15 354 4 179
Income tax expense -650 -97 -112 -51 -30 -32 82 -24 -778
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 865 763 676 285 105 286 97 330 3 401
attributable to minority interests -1 0 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 866 763 676 285 105 286 97 330 3 402
a Of which non-cash expenses -64 -124 -102 -43 -25 -34 -101 -7 -391
Depreciation and amortisation of fixed assets -61 -122 -102 -43 -25 -34 -101 -7 -386
Other -4 -2 0 0 0 0 0 0 -5
Acquisitions of non-current assets* 867 163 216 118 57 42 146 0 1 392
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Czech International
(in millions of EUR) Belgium Republic Markets Of which
Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandKBCGroup
INCOME STATEMENT FOR 2022
Net interest income 2 8271 313 888 423 235 229 134 240 5 162
Insurance revenues before reinsurance 1 507 488 412 159 86 166 16 0 2 423
Non-life 1 269 401 365 141 70 153 16 0 2 050
Life 238 87 47 18 16 13 0 0 373
Dividend income 54 1 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss 57 133 70 60 33 -22 -8 -3 252
Net fee and commission income 1 512 282 429 228 82 119 -5 -2 2 218
Insurance finance income and expense (for insurance contracts issued) -131 -10 45 14 8 23 0 0 - 96
Other net income 213 -185 -7 -8-34-5 -8 16
TOTAL INCOME 6 039 2 023 1 837 876 441 520 136 228 10 035
Operating expenses (excluding directly attributable to insurance contracts)a-2360-815-816-409-226-181-337 -208 -4 327
Total operating expenses excluding bank and insurance tax-2 284-861-683-238-248-197-332-200-4159
Bank and insurance tax-349-61-228-211-7-10-8-8-646
Less: operating expenses attributed to insurance service expenses 273 107 95 40 29 26 30478
Insurance service expenses before reinsurance -1 174 -378 -347 -142-71-134-9 0 -1 908
Of which insurance commissions paid -198 -46 -63 -26 -8 -29 -1 0 -308
Non-life-1 084-327-314-130-59-125-90-1733
Of which Non-life claim-related expenses-711-190-170-60-33-77-60-1077
Life-90-51-33-12-12-900-174
Net result from reinsurance contracts held 21 -6 -14 -3-3-8-22 0 -20
Impairment -46-60-152-97-21-33-24 -18 -282
on financial assets at amortised cost and at fair value through OCI -35 -46 -78 -29 -19 -30 5 7 -154
Share in results of associated companies and joint ventures -9 -1 0 0 0 0 0 0 -10
RESULT BEFORE TAX 2 472 762 509 225 119 164 -254 3 3 488
Income tax expense -596-109-81-37-27-16 116 34 - 670
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 876 653 428 188 91 148 -139 37 2 818
attributable to minority interests 0 0 0 0 0 0 0 0 0
attributable to equity holders of the parent 1 876 653 428 188 91 148 -139 37 2 818
a Of which non-cash expenses -58-114-89-40-23-26-120 -31 -381
Depreciation and amortisation of fixed assets-57-114-86-38-23-24-117-26-374
Other 00-4-20-2-3-4-7
Acquisitions of non-current assets* 544 125 624 95 63 466 151 1 1 443
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
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consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
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KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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\u2022 The lion\u2019s share of the fees and commissions related to lending is recognised under \u2018Net interest income\u2019 (effective interest rate
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20232022
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR)diariescompaniesventuresOtherTotaldiariescompaniesventuresOtherTotal
Assets 161 100 25 0 287147107330287
Loans and advances 15 81 0 0 96158900104
Equity instruments (including investments
in associated companies and joint 146 19 25 0 19113119330184
ventures)
Other 0 0 0 0 000000
Liabilities 45 80 0 677 80354740593721
Deposits 41 23 0 674 73854100590654
Other financial liabilities 0 0 0 0 000000
Other 4 58 0 3 651630367
Income statement 7-3 0 1 6-1-20-1-3
Net interest income 0 1 0 0 101000
Interest income 0 2 0 0 202002
Interest expense-1-1 0 0-20-100-1
Insurance revenues before reinsurance 0 0 0 0 000000
Insurance service expenses before 0 0 0 0 000000
reinsurance
Dividend income 10 0 0 4 1441049
Net fee and commission income 0 0 0 2 210023
Fee and commission income 0 0 0 2 210023
Fee and commission expense 0 0 0 0 000000
Other net income 0-1 0 0-11-1000
Total operating expenses excluding bank -3-2 0-5-10-7-20-7-16
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 150 1510005050
Received by the group 0 0 0 0 000000
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Note 2.2: Results by segment
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Czech International
Belgium Republic Markets Of which
(in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Ireland KBC Group
INCOME STATEMENT FOR 2023
Net interest income 3 248 1 271 1 179 529 254 396 -225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 189 96 189 14 0 2 679
Non-life 1 387 459 420 169 79 172 14 0 2 280
Life 250 96 53 20 17 16 0 0 399
Dividend income 53 0 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss -22 132 125 97 6 22 88 -4 322
Net fee and commission income 1 537 324 493 260 84 149 -6 -1 2 349
Insurance finance income and expense (for insurance contracts issued) -175 -68 -70 -46 -5 -19 0 0 -313
Other net income 235 5 15 -3 11 6 400 409 656
TOTAL INCOME 6 512 2 220 2 216 1 026 446 744 276 467 11 224
Operating expenses (excluding directly attributable to insurance contracts) a-2 532 -865 -962 -463 -229 -270 -256 -112 -4 616
Total operating expenses excluding bank and insurance tax-2 463-916-805-275 -250 -281 -254-107 -4 438
Bank and insurance tax-361-60-262-238 -4 -20 -4-4 -687
Less: operating expenses attributed to insurance service expenses29211110449 25 30 20 509
Insurance service expenses before reinsurance -1 285 -420 -414 -186 -90 -139 -1 0 -2 120
Of which insurance commissions paid -220-65-55-12 -10 -33 -10 -340
Non-life-1 116-368-384-173 -80 -131 -10 -1 870
Of which Non-life claim-related expenses-734-213-211-85 -51 -75 20 -1 157
Life-169-52-30-12 -10 -8 00 -251
Net result from reinsurance contracts held -63 -16 -15 -3 1 -13 4 0 -90
Impairment -114 -57 -36 -38 6 -4 -7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 7019 11 8 0 8 9 16
Share in results of associated companies and joint ventures -3 -1 0 0 0 0 0 0 -4
RESULT BEFORE TAX 2 515 860 789 336 134 318 15 354 4 179
Income tax expense -650 -97 -112 -51 -30 -32 82 -24 -778
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 865 763 676 285 105 286 97 330 3 401
attributable to minority interests -1 0 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 866 763 676 285 105 286 97 330 3 402
a Of which non-cash expenses -64 -124 -102 -43 -25 -34 -101 -7 -391
Depreciation and amortisation of fixed assets -61 -122 -102 -43 -25 -34 -101 -7 -386
Other -4 -2 0 0 0 0 0 0 -5
Acquisitions of non-current assets* 867 163 216 118 57 42 146 0 1 392
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Czech International
(in millions of EUR) Belgium Republic Markets Of which
Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandKBCGroup
INCOME STATEMENT FOR 2022
Net interest income 2 8271 313 888 423 235 229 134 240 5 162
Insurance revenues before reinsurance 1 507 488 412 159 86 166 16 0 2 423
Non-life 1 269 401 365 141 70 153 16 0 2 050
Life 238 87 47 18 16 13 0 0 373
Dividend income 54 1 1 0 0 1 4 0 59
Net result from financial instruments at fair value through profit or loss 57 133 70 60 33 -22 -8 -3 252
Net fee and commission income 1 512 282 429 228 82 119 -5 -2 2 218
Insurance finance income and expense (for insurance contracts issued) -131 -10 45 14 8 23 0 0 - 96
Other net income 213 -185 -7 -8-34-5 -8 16
TOTAL INCOME 6 039 2 023 1 837 876 441 520 136 228 10 035
Operating expenses (excluding directly attributable to insurance contracts)a-2360-815-816-409-226-181-337 -208 -4 327
Total operating expenses excluding bank and insurance tax-2 284-861-683-238-248-197-332-200-4159
Bank and insurance tax-349-61-228-211-7-10-8-8-646
Less: operating expenses attributed to insurance service expenses 273 107 95 40 29 26 30478
Insurance service expenses before reinsurance -1 174 -378 -347 -142-71-134-9 0 -1 908
Of which insurance commissions paid -198 -46 -63 -26 -8 -29 -1 0 -308
Non-life-1 084-327-314-130-59-125-90-1733
Of which Non-life claim-related expenses-711-190-170-60-33-77-60-1077
Life-90-51-33-12-12-900-174
Net result from reinsurance contracts held 21 -6 -14 -3-3-8-22 0 -20
Impairment -46-60-152-97-21-33-24 -18 -282
on financial assets at amortised cost and at fair value through OCI -35 -46 -78 -29 -19 -30 5 7 -154
Share in results of associated companies and joint ventures -9 -1 0 0 0 0 0 0 -10
RESULT BEFORE TAX 2 472 762 509 225 119 164 -254 3 3 488
Income tax expense -596-109-81-37-27-16 116 34 - 670
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 876 653 428 188 91 148 -139 37 2 818
attributable to minority interests 0 0 0 0 0 0 0 0 0
attributable to equity holders of the parent 1 876 653 428 188 91 148 -139 37 2 818
a Of which non-cash expenses -58-114-89-40-23-26-120 -31 -381
Depreciation and amortisation of fixed assets-57-114-86-38-23-24-117-26-374
Other 00-4-20-2-3-4-7
Acquisitions of non-current assets* 544 125 624 95 63 466 151 1 1 443
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* Non-current assets held for sale and disposal groups, investment property, property and equipment, investments in associated companies, and goodwill and other intangible assets.
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
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consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
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KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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\n\n
\u2022 The lion\u2019s share of the fees and commissions related to lending is recognised under \u2018Net interest income\u2019 (effective interest rate
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calculations).
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\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
20232022
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR)diariescompaniesventuresOtherTotaldiariescompaniesventuresOtherTotal
Assets 161 100 25 0 287147107330287
Loans and advances 15 81 0 0 96158900104
Equity instruments (including investments
in associated companies and joint 146 19 25 0 19113119330184
ventures)
Other 0 0 0 0 000000
Liabilities 45 80 0 677 80354740593721
Deposits 41 23 0 674 73854100590654
Other financial liabilities 0 0 0 0 000000
Other 4 58 0 3 651630367
Income statement 7-3 0 1 6-1-20-1-3
Net interest income 0 1 0 0 101000
Interest income 0 2 0 0 202002
Interest expense-1-1 0 0-20-100-1
Insurance revenues before reinsurance 0 0 0 0 000000
Insurance service expenses before 0 0 0 0 000000
reinsurance
Dividend income 10 0 0 4 1441049
Net fee and commission income 0 0 0 2 210023
Fee and commission income 0 0 0 2 210023
Fee and commission expense 0 0 0 0 000000
Other net income 0-1 0 0-11-1000
Total operating expenses excluding bank -3-2 0-5-10-7-20-7-16
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 150 1510005050
Received by the group 0 0 0 0 000000
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag456": { "value": "\n
Note 2.3: Balance-sheet information by segment
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The table below presents some of the main on-balance-sheet products by segment.
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Czech
Belgium Republic International
Business Business Markets GroupOf which
(in millions of EUR)Unit UnitBusiness UnitHungarySlovakiaBulgaria Centre
\n\n		IrelandKBC Group
BALANCE SHEET AT 31-12-2023
Deposits from customers and debt securities 154 238 52 64231 6879 6108 83613 24120 9240259 491
(excluding repos)
Demand deposits (incl. special deposits 60 53123 37823 6596 6455 48011 53400107 568
and other deposits)
Time deposits19 65412 0586 3332 2522 3821 6990038 044
Savings accounts54 07415 2201 51663687280070 810
Debt securities19 979 1 98617976103020 924043 068
Loans and advances to customers 119 16836 47027 9756 76411 5899 62300183 613
(excluding reverse repos)
Term loans 62 57311 46311 6583 2793 4524 9270085 694
Mortgage loans45 39419 64110 4471 8186 4512 1780075 482
Other 11 2005 3665 8701 6671 6862 5170022 437
Liabilities under investment contracts13 461000000013 461
Insurance contract liabilities14 3151 2881 16241322652418016 784
Non-life2 204357343114581711802 922
Life12 1119318202991683530013 862
BALANCE SHEET AT 31-12-2022
Deposits from customers and debt securities 155 971 51 06929 9629 5158 42112 02615 743418252 746
(excluding repos)
Demand deposits (incl. special deposits 75 322 25 74723 5437 3035 82610 415418418125 030
and other deposits)
Time deposits8 8969 2114 2911 2911 4141 5860022 397
Savings accounts60 80214 3441 8337221 086250076 979
Debt securities10 951 1 76729520096015 325028 338
Loans and advances to customers 117 22135 44525 3845 87910 7968 70933178 053
(excluding reverse repos)
Term loans 61 76810 58110 5442 9703 0134 5612282 894
Mortgage loans44 32619 6969 6381 6816 1141 8430073 660
Other11 1275 1685 2021 2281 6682 3061121 498
Liabilities under investment contracts12 026000000012 026
Insurance contract liabilities13 9331 25895132121341716016 158
Non-life2 10131628185441531602 714
Life11 8329436692361692640013 444
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
\n
and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
\n
transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
\n
\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
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\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
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\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
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\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
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reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
\n
transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
\n
73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
\n
the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
\n
\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
\n
relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
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value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
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takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
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classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
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value (i.e. not marked-to-market).
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\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
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transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
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from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
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If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
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in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
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liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
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profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
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contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
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relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
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instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
\n
instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
\n
\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
\n
relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
\n
value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
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takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
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classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
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value (i.e. not marked-to-market).
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\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
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transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
\n
from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
\n
If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
\n
in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
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liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
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profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
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contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
\n
relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
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instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
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instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
\n
\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
\n
relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
\n
value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
\n
takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
\n
classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
\n
value (i.e. not marked-to-market).
\n
\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
\n
transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
\n
from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
\n
If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
\n
in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
\n
liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
\n
profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
\n
contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
\n
relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
\n
instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
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instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 3.4: Net fee and commission income
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(in millions of EUR)20232022
Total2 3492 218
Fee and commission income2 9912 800
Fee and commission expense-642-581
Breakdown by type
Asset management services1 2471 199
Fee and commission income1 3051 259
Fee and commission expense-59-60
Banking services1 057 983
Fee and commission income1 6321 495
Fee and commission expense-575-512
Other45 36
Fee and commission income53 46
Fee and commission expense-8-10
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\u2022 \u2018Asset management services\u2019 contains management fees, entry fees and distribution fees for investment funds and unit-linked
\n
life insurance under IFRS 9. \u2018Banking services\u2019 contains credit- and guarantee-related fees, payment transaction fees, network
\n
income, securities-related fees, distribution fees paid for banking products and fees for other banking services. Distribution
\n
fees paid for insurance products (Life and Non-life under IFRS 17) are recognised in the income statement under \u2018Insurance
\n
service expenses before reinsurance\u2019 (see Note 3.6). \u2018Other\u2019 comprises distribution fees of third-party insurers (not under IFRS
\n
17) and platformication income.
\n\n

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\u2022 The lion\u2019s share of the fees and commissions related to lending is recognised under \u2018Net interest income\u2019 (effective interest rate
\n
calculations).
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\u2022 The sale of the Belgian State Note through KBC in 2023 resulted in one-off net fee and commission income of 11 million euros.
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Note 3.5: Other net income
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(in millions of EUR)20232022
Total65616
of which gains or losses on
Sale of financial assets measured at amortised cost-22-32
Sale of FVOCI debt instruments-7-69
Repurchase of financial liabilities measured at amortised cost00
Other, including:685117
Income from operational leasing activities10194
Income from VAB Group3950
Gain on sale of real estate subsidiary (KBC Vastgoed Nederland)-68
Arbitration proceedings against ICEC-Holding--149
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios
405		\u2013
Gain on sale of a participation in Belgium18\u2013
Recovery of Belgian bank and insur ance tax from 2016 (incl. moratorium interest)48\u2013
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\u2022 Arbitration proceedings against ICEC-Holding (significant adjusting post-balance-sheet event affecting the 2022 financial
\n
statements): on 17 February 2023, \u010cSOB in the Czech Republic received an arbitral award in the arbitration proceedings against
\n
ICEC-Holding. \u010cSOB was being sued in the arbitration proceedings as the legal successor of Investi\u010dn\u00ed a po\u0161tovn\u00ed banka (IPB),
\n
whose business activities were acquired by \u010cSOB in 2000. The proceedings were initiated by ICEC-Holding in 2007. The
\n
plaintiff, ICEC-Holding, a.s., claims that IPB breached its contractual duties in 1999, entitling ICEC-Holding to damages and a
\n
contractual penalty. The claim itself is not in any way related to \u010cSOB\u2019s business activities and is to be considered part of the
\n
IPB legacy. In the delivered arbitral award, the Court of Arbitration ordered \u010cSOB to pay ICEC-Holding an amount of CZK 3.7
\n
billion, along with the costs of the proceedings in the amount of CZK 5.0 million, payable within fifteen days of the delivery of
\n
the award. The plaintiff failed in the remainder of its claim and the arbitration panel ordered it to pay \u010cSOB the costs of the
\n
proceedings in the amount of CZK 17.4 million. \u010cSOB will consider possible further legal steps leading to the revision of this
\n
award. The payment of damages and contractual penalties had an adverse financial impact on \u010cSOB and KBC Group. In
\n
accordance with IFRS, \u010cSOB was required to provision the full amount of CZK 3.7 billion in its 2022 income statement, impacting
\n
KBC Group\u2019s 2022 income statement to the extent of -149 million euros before tax (-121 million euros after tax).
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios, see Note 6.6.
\n

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\n\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
\n
\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
\n
- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
\n
fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
\n
\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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Note 3.6.3: Insurance revenues (Life and Non-life) by component
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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Note 3.6.4: Life insurance sales
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(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
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\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
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under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
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commission income\u2019.
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\u2022 Hybrid products: see Note 5.6.1.
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Note 3.6.5: Non-life insurance profitability by product (P&L)
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Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
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consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
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KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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4.0 Notes on the financial assets and liabilities on the balance sheet
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
1 The carrying value comes close to the maximum credit exposure.
\n
2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
\n
3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
\n
4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
\n
5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
\n
and partly obtained through reverse repo transactions.
\n
6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
\n
recorded under \u2018Designated at fair value\u2019 (see accounting policies).
\n
\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
\n
In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
\n
(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
\n
\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
\n
transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
\n
risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
\n
financial liability is recognised equalling the cash received.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
\n
we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n
Note 4.2.1: Impaired financial assets
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
\n
customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
\n
to:
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\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
\n
\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
\n
due primarily to:
\n
\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
\n
indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
\n
billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
\n
Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
\n
with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
\n
loans and advances at amortised cost in \u2018Stage 1\u2019.
\n
\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
\n
\u2018Stage 1\u2019:
\n
\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
\n
offset by a decline in companies), and related primarily to net investments.
\n
\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
\n
\u25e6 Derecognised financial assets.
\n
\u25e6 Partly offset by other changes (see Note 3.9).
\n
At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
\n
respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
\n
amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
\n
(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
\n
in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
\n
accounting policies at KBC Bank Bulgaria for determining impairment.
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For information on other changes, see Note 3.9.
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\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
\n
audited this section).
\n
\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
\n
modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
\n
modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
\n
2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
\n
(see Note 3.9).
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\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure in 2022 was 80 million euros.
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Note 4.2.2: Impairment details for loans and advances at amortised cost
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Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
\n\n\n\n\n\n\n\n
\n
1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
\n
2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
\n
3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
\n
before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
\n
\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
\n
on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
\n
securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
\n
\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
\n
(see Note 3.9).
\n
\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
\n
changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
\n
\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
\n
\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
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Note 4.3: Maximum credit exposure and offsetting
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Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
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\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
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mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
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and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
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euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
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composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
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risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
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\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
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relevant loans.
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Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
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* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
\n
amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
\n
\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
\n
financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
\n
financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
\n
were traded on (central) clearing houses.
\n\n
\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
\n
received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
\n
the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
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Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
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* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
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the statutory auditor.
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\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
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sheet, whereas the table below focuses on some parts of the balance sheet.
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\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
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which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
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total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
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consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
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need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
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\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
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appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
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assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
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consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
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Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
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(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
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liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
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Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
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\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
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discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
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by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
\n
\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
\n
arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
\n
involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
\n
considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
\n
significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
\n
significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
\n
indicated in the table, a small portion may actually be classified in another level.
\n
\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
\n
period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
\n
\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
\n
euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
\n
government bonds and corporate bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
\n
- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
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million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
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\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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Note 4.8: Derivatives
\n
\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately
\n
25% are hedging derivatives.
\n
\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited
\n
open positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are
\n
economically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional
\n
amounts but also to result-neutral revaluations on a net basis.
\n
\u2022 A limited number of trading derivatives are ALM derivatives included in the banking book, which are used to hedge economic
\n
risk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only
\n
a limited number of the ALM derivatives for foreign currencies are included in hedge accounting.
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Note 4.8.1: Trading derivatives
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(in millions of EUR)31-12-202331-12-2022
Carrying valueNotional amounts*Carrying valueNotional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total4 6185 501598 880591 9236 2798 038567 205568 302
Interest rate contracts1 8212 252403 723395 1702 6423 678379 270377 754
of which interest rate swaps 1 6842 169394 018389 1842 4293 542368 144371 294
and futures
of which options 137 839 7055 986 214 13611 1266 460
Foreign exchange contracts2 3182 481180 438182 7193 1663 620174 787177 841
of which currency and interest 2 2462 409176 708176 8293 0813 509171 878172 361
rate swaps, forward foreign
exchange transactions and
futures
of which options 72 723 7305 890 85 1122 9095 480
Equity contracts 471 76114 38113 698 452 72012 81212 371
of which equity swaps 385 39311 31411 031 414 41010 55310 394
of which options 85 3683 0672 667 37 3112 2591 977
Credit contracts 0 0 0 0 0 0 0 0
of which credit default swaps 0 0 0 0 0 0 0 0
Commodity and other contracts 8 7 338 336 20 19 337 335
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* In this table, both legs of the derivatives are reported in the notional amounts.
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Note 4.8.2: Hedging derivatives
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31-12-2023
(in millions of EUR)Hedging instrumentHedged itemImpact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategyPurchasedSoldAssetsLiabilitieschanges)adjustments
Fair value micro hedge
Interest rate swaps31 86431 86497112267Debt securities held at AC6 547-300377
Currency and 00000Loans and advances at AC 601753
interest rate swaps
Debt securities held at FVOCI2 999-25124
Debt securities issued at AC21 285-560-774
Deposits at AC000
Total31 86431 86497112267Total-269-2-
Portfolio hedge of interest rate risk
Interest rate swaps143 932143 93293123-995Debt securities held at AC937-7115
Currency and 1 6180700-27Loans and advances at AC125 541-2 4731 841
interest rate options
Debt securities held at FVOCI8539
Debt securities issued at AC000
Deposits at AC15 938-507-936
Total145 550143 932163123-1 022Total1 0297-
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps19 60319 60315127401
Currency and 1 1811 205122-14
interest rate swaps
Total20 78420 80817149387Total-395-9-611
Hedge of net investments in foreign operations
Total32 5792 5701946077Total-77092
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1 In this table, both legs of the derivatives are reported in the notional amounts.
\n
2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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31-12-2022
(in millions of EUR) Hedging instrument Hedged item Impact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notionalamounts 1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy PurchasedSold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 22 753 22 753 185 102 -619 Debt securities held at AC 4 007 -684 -323
Currency and 00000Loans and advances at AC 683 70 -310
interest rate swaps
Debt securities held at FVOCI 1 342 -152 -176
Debt securities issued at AC 14 624 -1 334 1 432
Deposits at AC000
Total2275322753185102-619Total6245-
Portfolio hedge of interest rate risk
Interest rate swaps 123 930 123 930 209 261 3 172 Debt securities held at AC 359 -122 -123
Currency and 1 762 0 101 0 82 Loans and advances at AC 104 980 -4 207 -3 769
interest rate options
Debt securities held at FVOCI 23 -6 -6
Debt securities issued at AC 0 0 0
Deposits at AC 14 574 -1 432 644
Total 125 692 123 930 310 261 3 254 Total -3 254 0 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 20 073 20 073 47 115 177
Currency and 1 204 1 257 0 39 -13
interest rate swaps
Total 21 277 21 330 47 154 164 Total -167 -3 -1 046
Hedge of net investments in foreign operations
Total31 755 1 807 0 505 18 Total -18 0 20
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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\u2022 The Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a
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negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
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derivatives.
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\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
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and risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these
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techniques will be used to limit any resulting accounting mismatch.
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\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
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applied came to -322 million euros. The accumulated amount of fair value hedge adjustments remaining on the balance sheet
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for any hedged items that have ceased to be adjusted for hedging gains and losses amounted to -82 million euros. These
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adjustments are amortised to profit or loss.
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\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and
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accumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to
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accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
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balance sheet.
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\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk became less
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negative in 2023 due to the general decline in interest rates. The \u2018Profit/loss on positions in portfolios hedged against interest
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rate risk\u2019 balance sheet item on the liabilities side of the balance sheet also became less negative for the same reason.
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\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
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Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR)InflowOutflow
Not more than three months34-79
More than three but not more than six months52-103
More than six months but not more than one year115-213
More than one but not more than two years202-401
More than two but not more than five years335-625
More than five years537-671
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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
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consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
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KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
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the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
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associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
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offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
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account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
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by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
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positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
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euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
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and the sale of existing positions.
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\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
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and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
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The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
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in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
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changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
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million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
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transactions.
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\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
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to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
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third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
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KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
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correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
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used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
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resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag722": { "value": "\n

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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
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refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
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mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
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consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
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KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
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the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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Note 3.2: Dividend income
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(in millions of EUR)20232022
Total5959
Equity instruments MFVPL other than held for trading00
Equity instruments held for trading1410
Equity instruments at FVOCI4450
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
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offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
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account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
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by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
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positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
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euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
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and the sale of existing positions.
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\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
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and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
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The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
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in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
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changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
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million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
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transactions.
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\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag723": { "value": "\n

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Note 3.1: Net interest income
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(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
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\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
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transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
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\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
\n
mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
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short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
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expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
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73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
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\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
\n
the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
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million euros in 2022).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
1 The carrying value comes close to the maximum credit exposure.
\n
2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
\n
3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
\n
4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
\n
5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
\n
and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
\n
recorded under \u2018Designated at fair value\u2019 (see accounting policies).
\n
\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
\n
In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
\n
(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
\n
\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
\n
transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
\n
risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
\n
financial liability is recognised equalling the cash received.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
\n
we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
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offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new transactions.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
\n
- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag724": { "value": "\n

\n\n\n

\n
Note 3.1: Net interest income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
\n
transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
\n\n
\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
\n
mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
\n
short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
\n
expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
\n

\n\n\n\n\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
\n
73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
\n
\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
\n
the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
\n
million euros in 2022).
\n

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20232022
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR)diariescompaniesventuresOtherTotaldiariescompaniesventuresOtherTotal
Assets 161 100 25 0 287147107330287
Loans and advances 15 81 0 0 96158900104
Equity instruments (including investments
in associated companies and joint 146 19 25 0 19113119330184
ventures)
Other 0 0 0 0 000000
Liabilities 45 80 0 677 80354740593721
Deposits 41 23 0 674 73854100590654
Other financial liabilities 0 0 0 0 000000
Other 4 58 0 3 651630367
Income statement 7-3 0 1 6-1-20-1-3
Net interest income 0 1 0 0 101000
Interest income 0 2 0 0 202002
Interest expense-1-1 0 0-20-100-1
Insurance revenues before reinsurance 0 0 0 0 000000
Insurance service expenses before 0 0 0 0 000000
reinsurance
Dividend income 10 0 0 4 1441049
Net fee and commission income 0 0 0 2 210023
Fee and commission income 0 0 0 2 210023
Fee and commission expense 0 0 0 0 000000
Other net income 0-1 0 0-11-1000
Total operating expenses excluding bank -3-2 0-5-10-7-20-7-16
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 150 1510005050
Received by the group 0 0 0 0 000000
\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag725": { "value": "\n\n

\n
Note 3.1: Net interest income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
\n
transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
\n\n
\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
\n
mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
\n
short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
\n
expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
\n

\n\n\n\n\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
\n
73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
\n
\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
\n
the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
\n
million euros in 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n
Note 3.1: Net interest income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total5 4735 162
Interest income20 17011 225
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost10 2337 848
Financial assets at fair value through OCI384376
Hedging derivatives5 0941 838
Financial liabilities (negative interest rate)11289
Other2 143130
Interest income on other financial instruments
Financial assets MFVPL other than held for trading5535
Financial assets held for trading2 250710
Of which economic hedges2 085582
Other financial assets at fair value through profit or loss00
Interest expense-14 697-6 063
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost-6 757-2 320
Hedging derivatives-5 277-1 972
Financial assets (negative interest rate) -1-94
Other-5-3
Interest expense on other financial instruments
Financial liabilities held for trading-2 599-1 639
Of which economic hedges-2 546-1 595
Other financial liabilities at fair value through profit or loss-68-33
Net interest expense relating to defined benefit plans10-1
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Financial liabilities (negative interest rate)\u2019 and \u2018Financial assets (negative interest rate)\u2019: these rates relate mainly to
\n
transactions with central banks, interbank and professional counterparties, corporate clients, and targeted long-term
\n
refinancing operations (TLTRO). More information on TLTRO can be found in Note 4.1.
\n\n
\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
\n
mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
\n
short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
\n
expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
\n

\n\n\n\n\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a State Note with a term of one year, which had the following
\n
consequences for KBC in 2023: an outflow of customer deposits of 5.7 billion euros, a negative impact on net interest income of
\n
73 million euros and a one-off positive impact on net fee and commission income (related to the sale of State Notes through
\n
KBC) of 11 million euros.
\n
\u2022 Several central banks in our core countries decided to increase the minimum amount of reserves to be maintained or to lower
\n
the compensation paid for these reserves. This had a negative impact on our net interest income of around 125 million euros (13
\n
million euros in 2022).
\n

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\n\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
\n
\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
\n
relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
\n
value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
\n
takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
\n
classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
\n
value (i.e. not marked-to-market).
\n
\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
\n
transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
\n
from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
\n
If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
\n
in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
\n
\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
\n
liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
\n
profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
\n
gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
\n
contracts issued)\u2019.
\n

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\n\n

\n\n
\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
\n
than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
\n
Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
\n
relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
\n
\u2022 The effectiveness of the hedge is determined according to the following methods:
\n
- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
\n
hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
\n
- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
\n
prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
\n
instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
\n
- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
\n
portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
\n
instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
\n
Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
\n
hedging instruments allocated to the same bucket.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag787": { "value": "\n
\u2022 The increase in \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019 relates
\n
mainly to interest on cash balances with central banks. These cash balances with central banks are mostly financed using
\n
short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised under \u2018Interest
\n
expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited.
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2022:
Impact of the acquisition of Raiffeisenbank Bulgaria in 2022 (in millions of EUR)Raiffeisenbank Bulgaria
Percentage of shares bought or sold in the relevant yearpurchase
100.00%
Percentage of shares after deal100.00%
For business unitInternational Markets
Deal date (month and year)July 2022
Results of the relevant company/business recognised in the group result as from:July 2022*
Purchase price or sale price1 009
Cashflow for acquiring or selling companies less cash and cash equivalents acquired or sold-42
Amounts recognised for the purchased assets and liabilities (fair value)
Situation on:7 July 2022
Cash and cash balances with central banks1 053
Financial assets4 686
Amortised cost4 521
Fair value through OCI132
Fair value through profit or loss30
Hedging derivatives4
Tax assets2
Investments in associated companies and joint ventures2
Property and equipment35
Goodwill and other intangible assets15
Other assets20
Cash and cash equivalents (included in the above assets)1 053
Financial liabilities5 150
Held for trading19
Amortised cost5 130
Provisions for risks and charges9
Other liabilities21
Cash and cash equivalents (included in the above liabilities)28
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* A further 58 million euros was paid for an additional tier-1 instrument issued by Raiffeisenbank Bulgaria, included in equity at nominal value.
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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
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\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
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relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
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value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
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takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
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classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
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value (i.e. not marked-to-market).
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\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
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transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
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from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
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If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
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in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
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liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
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profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
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contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
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relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
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instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
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instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
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\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
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euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
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offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
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account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
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by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
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positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
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euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
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and the sale of existing positions.
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\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
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and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
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The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
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in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
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changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
\n

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\n\n
Note 4.8: Derivatives
\n
\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately
\n
25% are hedging derivatives.
\n
\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited
\n
open positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are
\n
economically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional
\n
amounts but also to result-neutral revaluations on a net basis.
\n
\u2022 A limited number of trading derivatives are ALM derivatives included in the banking book, which are used to hedge economic
\n
risk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only
\n
a limited number of the ALM derivatives for foreign currencies are included in hedge accounting.
\n
Note 4.8.1: Trading derivatives
\n
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(in millions of EUR)31-12-202331-12-2022
Carrying valueNotional amounts*Carrying valueNotional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total4 6185 501598 880591 9236 2798 038567 205568 302
Interest rate contracts1 8212 252403 723395 1702 6423 678379 270377 754
of which interest rate swaps 1 6842 169394 018389 1842 4293 542368 144371 294
and futures
of which options 137 839 7055 986 214 13611 1266 460
Foreign exchange contracts2 3182 481180 438182 7193 1663 620174 787177 841
of which currency and interest 2 2462 409176 708176 8293 0813 509171 878172 361
rate swaps, forward foreign
exchange transactions and
futures
of which options 72 723 7305 890 85 1122 9095 480
Equity contracts 471 76114 38113 698 452 72012 81212 371
of which equity swaps 385 39311 31411 031 414 41010 55310 394
of which options 85 3683 0672 667 37 3112 2591 977
Credit contracts 0 0 0 0 0 0 0 0
of which credit default swaps 0 0 0 0 0 0 0 0
Commodity and other contracts 8 7 338 336 20 19 337 335
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* In this table, both legs of the derivatives are reported in the notional amounts.
\n

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Note 4.8.2: Hedging derivatives
\n
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31-12-2023
(in millions of EUR)Hedging instrumentHedged itemImpact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategyPurchasedSoldAssetsLiabilitieschanges)adjustments
Fair value micro hedge
Interest rate swaps31 86431 86497112267Debt securities held at AC6 547-300377
Currency and 00000Loans and advances at AC 601753
interest rate swaps
Debt securities held at FVOCI2 999-25124
Debt securities issued at AC21 285-560-774
Deposits at AC000
Total31 86431 86497112267Total-269-2-
Portfolio hedge of interest rate risk
Interest rate swaps143 932143 93293123-995Debt securities held at AC937-7115
Currency and 1 6180700-27Loans and advances at AC125 541-2 4731 841
interest rate options
Debt securities held at FVOCI8539
Debt securities issued at AC000
Deposits at AC15 938-507-936
Total145 550143 932163123-1 022Total1 0297-
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps19 60319 60315127401
Currency and 1 1811 205122-14
interest rate swaps
Total20 78420 80817149387Total-395-9-611
Hedge of net investments in foreign operations
Total32 5792 5701946077Total-77092
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\n
1 In this table, both legs of the derivatives are reported in the notional amounts.
\n
2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
\n
3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
\n

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31-12-2022
(in millions of EUR) Hedging instrument Hedged item Impact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notionalamounts 1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy PurchasedSold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 22 753 22 753 185 102 -619 Debt securities held at AC 4 007 -684 -323
Currency and 00000Loans and advances at AC 683 70 -310
interest rate swaps
Debt securities held at FVOCI 1 342 -152 -176
Debt securities issued at AC 14 624 -1 334 1 432
Deposits at AC000
Total2275322753185102-619Total6245-
Portfolio hedge of interest rate risk
Interest rate swaps 123 930 123 930 209 261 3 172 Debt securities held at AC 359 -122 -123
Currency and 1 762 0 101 0 82 Loans and advances at AC 104 980 -4 207 -3 769
interest rate options
Debt securities held at FVOCI 23 -6 -6
Debt securities issued at AC 0 0 0
Deposits at AC 14 574 -1 432 644
Total 125 692 123 930 310 261 3 254 Total -3 254 0 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 20 073 20 073 47 115 177
Currency and 1 204 1 257 0 39 -13
interest rate swaps
Total 21 277 21 330 47 154 164 Total -167 -3 -1 046
Hedge of net investments in foreign operations
Total31 755 1 807 0 505 18 Total -18 0 20
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\n
\n
\n
1 In this table, both legs of the derivatives are reported in the notional amounts.
\n
2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
\n
3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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\u2022 The Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a
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negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
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derivatives.
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\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
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and risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these
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techniques will be used to limit any resulting accounting mismatch.
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\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
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applied came to -322 million euros. The accumulated amount of fair value hedge adjustments remaining on the balance sheet
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for any hedged items that have ceased to be adjusted for hedging gains and losses amounted to -82 million euros. These
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adjustments are amortised to profit or loss.
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\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and
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accumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to
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accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
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balance sheet.
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\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk became less
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negative in 2023 due to the general decline in interest rates. The \u2018Profit/loss on positions in portfolios hedged against interest
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rate risk\u2019 balance sheet item on the liabilities side of the balance sheet also became less negative for the same reason.
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\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
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Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR)InflowOutflow
Not more than three months34-79
More than three but not more than six months52-103
More than six months but not more than one year115-213
More than one but not more than two years202-401
More than two but not more than five years335-625
More than five years537-671
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag728": { "value": "\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
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\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
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relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
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value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
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takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
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classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
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value (i.e. not marked-to-market).
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\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
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transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
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from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
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If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
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in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
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liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
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profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
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contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
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relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
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instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
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instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
\n

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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
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\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
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\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
\n
\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
\n
\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
\n
\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
\n
prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
\n
and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
\n
are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
\n
arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
\n
prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
\n
or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
\n
obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
\n
rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
\n
analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
\n
assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
\n
involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
\n
considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
\n
significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
\n
significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
\n
financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
\n
indicated in the table, a small portion may actually be classified in another level.
\n
\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
\n
period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
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\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
\n
euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
\n
government bonds and corporate bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag729": { "value": "\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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\u2022 ALM hedging derivatives (recognised in hedge accounting): the interest component of these derivatives is recognised under
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\u2018Net interest income\u2019. Fair value changes in hedging derivatives, excluding those for which an effective cashflow hedge
\n
relationship exists, are recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. Under fair
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value hedge accounting, changes in the fair value of hedged assets are also recognised under this heading, and offsetting
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takes place insofar as the hedge is effective. ALM hedging derivatives not recognised in hedge accounting (and therefore
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classified as trading instruments) are treated in the same way, except most of the related assets are not recognised at fair
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value (i.e. not marked-to-market).
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\u2022 Day 1 profit: when the transaction price in a non-active market differs from the fair value of other observable market
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transactions in the same instrument or from the fair value based on a valuation technique whose variables include only data
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from observable markets, the difference between the transaction price and the fair value (day 1 profit) is taken to profit or loss.
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If this is not the case (i.e. the variables do not include only data from observable markets), day 1 profit is reserved and is released
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in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited amounts.
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\u2022 Foreign exchange trading includes the realised and unrealised foreign exchange results (when the monetary assets and
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liabilities are revalued), regardless of the IFRS portfolio, except for financial assets and liabilities measured at fair value through
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profit or loss, for which the revaluation is included in the fair value correction. Note that (unrealised) foreign exchange
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gains/losses on insurance contract liabilities are recognised under \u2018Insurance finance income and expense (for insurance
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contracts issued)\u2019.
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\u2022 \u2018Investment result for unit-linked insurance contracts under IFRS 17\u2019 is fully composed, and \u2018Financial instruments MFVPL other
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than held for trading\u2019 is partly composed, of the changes in fair value of underlying assets of long-term unit-linked contracts in
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Central and Eastern Europe (measured using the VFA under IFRS 17). The offsetting impact of the changes in fair value of the
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relevant unit-linked liabilities is included in \u2018Insurance finance income and expense\u2019 in P&L (see also Note 3.6.1).
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\u2022 The effectiveness of the hedge is determined according to the following methods:
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- For fair value micro hedging, we use the dollar offset method on a quarterly basis, with changes in the fair value of the
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hedged item offsetting changes in the fair value of the hedging instrument within a range of 80%\u2013125%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on a
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prospective (by BPV measurement) and retrospective basis (by comparing the fair value of the designated hedging
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instrument with the perfect hedge). The effectiveness of both tests must fall within a range of 80%\u2013125%.
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- We use the rules set out in the European version of IAS 39 (carve-out) to assess the effectiveness of fair value hedges for a
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portfolio of interest rate risk. IFRS does not permit net positions to be reported as hedged items, but does allow hedging
\n
instruments to be designated as a hedge of a gross asset position (or a gross liabilities position, as the case may be).
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Specifically, we make sure that the volume of assets (or liabilities) in each maturity bucket is greater than the volume of
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hedging instruments allocated to the same bucket.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
\n
we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
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Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
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* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
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the statutory auditor.
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\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
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sheet, whereas the table below focuses on some parts of the balance sheet.
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\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
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which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
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consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
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need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
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\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
\n
\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
\n
\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
\n
prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
\n
and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
\n
are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
\n
arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
\n
prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
\n
obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
\n
rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
\n
analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
\n
involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
\n
considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
\n
significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
\n
significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
\n
financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
\n
indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
\n
period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
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\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
\n
euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
\n
government bonds and corporate bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
\n
- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag730": { "value": "\n

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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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Note 3.6: Insurance results
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Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
\n
\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
\n
- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
\n
fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
\n
\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n
Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Investment result (OCI) on financial assets at FVOCI 595 1 49 0 644
Change in Insurance finance income and expense \u2013 OCI, before -538-1-23\u2014-561
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -537 0-23\u2014-560
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under -1-1\u2014\u2014-1
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI 56 0 25 0 81
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7\u2014 7
Deferred taxes\u2014\u2014\u201413 13
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 3313101
2022
Investment result (OCI) on financial assets at FVOCI-2 716-2-236-26-2 979
Change in insurance finance income and expense \u2013 OCI, before 2 6151424\u20133 039
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, 2 6130424\u20133 037
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 11\u2013\u20131
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI-1020188-2660
Change in reinsurance finance income and expense \u2013 OCI0\u2013-25\u2013-25
Deferred taxes\u2013\u2013\u2013-106-106
Net insurance and investment result after reinsurance, after tax \u2013 OCI-1020164-132-71
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the \u2018Effect
\n
of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019. This is the result of a
\n
decision by KBC to categorise a large part of the bond portfolio backing Life insurance contracts and part of the bond portfolio
\n
backing Non-life insurance contracts as FVOCI assets, resulting in a natural hedge between investment results on financial
\n
assets at FVOCI and IFIE through OCI.
\n
\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
\n
\u2022 In addition to the investment result of the financial assets recognised in profit or loss (Note 3.6.1) and in OCI (Note 3.6.2), results
\n
realised on FVOCI equity instruments are recognised directly in equity (see \u2018Transfer from revaluation reserves to retained
\n
earnings upon realisation\u2019 in \u2018Consolidated statement of changes in equity\u2019). The corresponding figures for 2023 and 2022 were
\n
24 million euros and 133 million euros, respectively, at insurance level of the 21 million euros and 152 million euros at group level.
\n

\n\n\n\n

\n\n
Note 3.6.3: Insurance revenues (Life and Non-life) by component
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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Note 3.6.4: Life insurance sales
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(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
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\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
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under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
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commission income\u2019.
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\u2022 Hybrid products: see Note 5.6.1.
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Note 3.6.5: Non-life insurance profitability by product (P&L)
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Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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(in millions of EUR*)20232022
Total-215-282
Impairment on financial assets at AC and at FVOCI16-154
(impairment on loans)
By IFRS category
Financial assets at amortised cost17-155
Financial assets at fair value through OCI-11
By product
Loans and advances-5-177
Debt securities7-3
Off-balance-sheet commitments and financial guarantees1525
By type
Stage 1 (12-month ECL)-415
Stage 2 (lifetime ECL)161-107
Stage 3 (lifetime ECL)-92-60
Purchased or originated credit impaired assets-118
By business unit/country
Belgium-82-35
Czech Republic70-46
International Markets19-78
Slovakia8-19
Hungary11-29
Bulgaria0-30
Group Centre85
Impairment on goodwill-109-5
Impairment on other-122-123
Intangible fixed assets (other than goodwill)-77-34
Property and equipment (including investment property)-15-18
Associated companies and joint ventures00
Other-30-71
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* Positive figures indicate a reversal and hence a positive impact on results
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\u2022 We create the models for the various portfolios using typical PD, EAD and LGD inputs, as well as macro- and microeconomic
\n
variables to the extent that there is a statistical relationship. The macroeconomic variables are GDP growth, the unemployment
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rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation. Microeconomic variables
\n
include, for example, confidence indicators, the harmonised index of consumer prices (HICP), the producer price index (PPI), and
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so on. As a result of regular back-testing, models may change and economic variables may be reassessed. The following table
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gives the base-case scenario for the three key indicators (GDP growth, unemployment rate and house price index) for each of
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our core countries for the coming years. After that, we take into account a gradual linear transition towards a stable situation.
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Macroeconomic base-case scenarios \u2013 key indicators
(used for situation at year-end 2023) *202320242025
Real GDP growth
Belgium1.4%0.8%1.1%
Czech Republic-0.5%1.4%3.1%
Hungary-0.5%2.8%3.3%
Slovakia1.2%2.2%3.3%
Bulgaria1.9%2.3%3.0%
Unemployment rate
Belgium5.8%5.7%5.6%
Czech Republic2.8%3.3%3.2%
Hungary4.1%3.8%3.6%
Slovakia6.1%6.3%6.0%
Bulgaria4.5%4.2%4.0%
House price index
Belgium1.0%1.5%2.5%
Czech Republic-2.0%1.7%3.5%
Hungary0.0%3.0%4.0%
Slovakia-3.5%0.0%3.5%
Bulgaria8.4%0.7%3.0%
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* This deviates from the (more recent) estimates provided in the \u2018Report of the Board of Directors\u2019, under the \u2018Market conditions in our core markets in 2023\u2019 and \u2018Our business units\u2019 sections.
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\u2022 We use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
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weightings at year-end 2023 were 60% for the \u2018base\u2019 scenario, 10% for the \u2018up\u2019 scenario and 30% for the \u2018down\u2019 scenario. The
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forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on the collectively
\n
assessed ECL (i.e. without the ECL for individually assessed loans of 1.6 billion euros at year-end 2023 and year-end 2022) shows
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that the \u2018base\u2019 scenario generates an ECL of 0.9 billion euros (1.0 billion euros in 2022), which is 0.1 billion euros lower than for
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the \u2018down\u2019 scenario (0.1 billion euros in 2022) and 0.0 billion euros higher than for the \u2018up\u2019 scenario (0.0 billion euros in 2022). The
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assessed scenario-weighted collective ECL (that was recognised) amounted to 0.9 billion euros (1.0 billion euros in 2022). These
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amounts include the ECL related to geopolitical and emerging risks.
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100% 100% 100%
Collectively assessed ECL by country (2023, in billions of EUR)base-case optimistic pessimistic
scenarioscenarioscenario
Total0.90.91.0
Belgium0.30.30.3
Czech Republic0.30.30.3
Slovakia0.10.10.1
Hungary0.10.10.1
Bulgaria0.10.10.2
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\u2022 As set out in the \u2018How do we manage our risks?\u2019 section, KBC considers ESG risks in its credit risk management processes. The
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vulnerability of individual corporate clients to specific ESG risks may become apparent during the term of the loan in client-
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specific credit risk figures, such as credit risk ratings and collateral valuations affecting the ECL calculation. Especially in terms
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of climate risk, which may have considerable consequences for certain sectors in the longer term, the impact on our loan
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portfolio is not expected to occur within the time horizon considered for the ECL measurement.
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\u2022 Impairment on goodwill: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the reduction
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of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future projected earnings.
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This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros (based on the exchange
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rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of \u010cSOB Stavebn\u00ed (the former
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\u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time, which resulted in a one-off gain
\n
of 82 million euros. On 11 May 2023, the Czech government coalition presented its fiscal stabilisation package, which included
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a proposal for the reduction of the building saving state subsidy. The Czech government coalition\u2019s compromise was reflected
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in the government proposal, which was approved by the Czech Parliament on 8 November 2023.
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\u2022 Reserve for geopolitical and emerging risks: the outstanding balance of the ECL for geopolitical and emerging risks came to
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256 million euros at year-end 2023; the corresponding figure at year-end 2022 was 429 million euros. This decline is largely
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attributable to the improved micro- and macroeconomic outlook and the finalisation of the sale of KBC Bank Ireland\u2019s loan
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portfolio. This ECL is determined based on individual counterparties and certain sub-segments in our portfolio which are
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deemed to have incurred an increase in credit risk because they are either (\u00b0) exposed to the current emerging risks (high
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inflation and interest rates, high(er) energy prices, supply chain disruption) which affect our corporate and SME clients with
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activities in a number of vulnerable sectors (e.g., automotive, construction, chemicals and metals) and retail clients with a
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limited buffer to absorb the higher cost of living and/or to make higher repayments ensuing from higher interest rates, or (\u00b0)
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directly or indirectly exposed to ongoing military conflicts, such as the one in Ukraine. This analysis shows that for 12 billion euros
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in \u2018Stage 1\u2019 positions, which are not (yet) included in the standard staging assessment, credit risk has increased considerably.
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At year-end 2022, this was 14 billion euros.
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Note 4.2: Financial assets and liabilities, breakdown by portfolio and quality
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Note 4.2.1: Impaired financial assets
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
\n
customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
\n
to:
\n
\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
\n
\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
\n
\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
\n
due primarily to:
\n
\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
\n
indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
\n
billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
\n
Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
\n
with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
\n
loans and advances at amortised cost in \u2018Stage 1\u2019.
\n
\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
\n
\u2018Stage 1\u2019:
\n
\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
\n
offset by a decline in companies), and related primarily to net investments.
\n
\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
\n
\u25e6 Derecognised financial assets.
\n
\u25e6 Partly offset by other changes (see Note 3.9).
\n
At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
\n
respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
\n
amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
\n
(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
\n
in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
\n
accounting policies at KBC Bank Bulgaria for determining impairment.
\n
For information on other changes, see Note 3.9.
\n
\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
\n
audited this section).
\n
\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
\n
modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
\n
modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
\n
2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
\n
(see Note 3.9).
\n
\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure in 2022 was 80 million euros.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Note 4.2.2: Impairment details for loans and advances at amortised cost
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
\n\n\n\n\n\n\n\n
\n
1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
\n
2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
\n
3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
\n
before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
\n
\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
\n
on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
\n
securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
\n
\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
\n
(see Note 3.9).
\n
\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
\n
changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
\n
\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
\n
\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n
Note 4.4: Fair value of financial assets and liabilities \u2013 general
\n
\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
\n
\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
\n
\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
\n
\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
\n
- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
\n
prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
\n
and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
\n
are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
\n
arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
\n
prices. No valuation technique (model) is involved.
\n
- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
\n
or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
\n
obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
\n
rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
\n
analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
\n
involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
\n
considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
\n
significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
\n
significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
\n
financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
\n
indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
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\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
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euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
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government bonds and corporate bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
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by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
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positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
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euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
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and the sale of existing positions.
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\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
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and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
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The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
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in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
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changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
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million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
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transactions.
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\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
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to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
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third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
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KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
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correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
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used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
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resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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Note 4.8: Derivatives
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\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately
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25% are hedging derivatives.
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\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited
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open positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are
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economically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional
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amounts but also to result-neutral revaluations on a net basis.
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\u2022 A limited number of trading derivatives are ALM derivatives included in the banking book, which are used to hedge economic
\n
risk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only
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a limited number of the ALM derivatives for foreign currencies are included in hedge accounting.
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Note 4.8.1: Trading derivatives
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(in millions of EUR)31-12-202331-12-2022
Carrying valueNotional amounts*Carrying valueNotional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total4 6185 501598 880591 9236 2798 038567 205568 302
Interest rate contracts1 8212 252403 723395 1702 6423 678379 270377 754
of which interest rate swaps 1 6842 169394 018389 1842 4293 542368 144371 294
and futures
of which options 137 839 7055 986 214 13611 1266 460
Foreign exchange contracts2 3182 481180 438182 7193 1663 620174 787177 841
of which currency and interest 2 2462 409176 708176 8293 0813 509171 878172 361
rate swaps, forward foreign
exchange transactions and
futures
of which options 72 723 7305 890 85 1122 9095 480
Equity contracts 471 76114 38113 698 452 72012 81212 371
of which equity swaps 385 39311 31411 031 414 41010 55310 394
of which options 85 3683 0672 667 37 3112 2591 977
Credit contracts 0 0 0 0 0 0 0 0
of which credit default swaps 0 0 0 0 0 0 0 0
Commodity and other contracts 8 7 338 336 20 19 337 335
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* In this table, both legs of the derivatives are reported in the notional amounts.
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Note 4.8.2: Hedging derivatives
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31-12-2023
(in millions of EUR)Hedging instrumentHedged itemImpact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategyPurchasedSoldAssetsLiabilitieschanges)adjustments
Fair value micro hedge
Interest rate swaps31 86431 86497112267Debt securities held at AC6 547-300377
Currency and 00000Loans and advances at AC 601753
interest rate swaps
Debt securities held at FVOCI2 999-25124
Debt securities issued at AC21 285-560-774
Deposits at AC000
Total31 86431 86497112267Total-269-2-
Portfolio hedge of interest rate risk
Interest rate swaps143 932143 93293123-995Debt securities held at AC937-7115
Currency and 1 6180700-27Loans and advances at AC125 541-2 4731 841
interest rate options
Debt securities held at FVOCI8539
Debt securities issued at AC000
Deposits at AC15 938-507-936
Total145 550143 932163123-1 022Total1 0297-
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps19 60319 60315127401
Currency and 1 1811 205122-14
interest rate swaps
Total20 78420 80817149387Total-395-9-611
Hedge of net investments in foreign operations
Total32 5792 5701946077Total-77092
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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31-12-2022
(in millions of EUR) Hedging instrument Hedged item Impact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notionalamounts 1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy PurchasedSold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 22 753 22 753 185 102 -619 Debt securities held at AC 4 007 -684 -323
Currency and 00000Loans and advances at AC 683 70 -310
interest rate swaps
Debt securities held at FVOCI 1 342 -152 -176
Debt securities issued at AC 14 624 -1 334 1 432
Deposits at AC000
Total2275322753185102-619Total6245-
Portfolio hedge of interest rate risk
Interest rate swaps 123 930 123 930 209 261 3 172 Debt securities held at AC 359 -122 -123
Currency and 1 762 0 101 0 82 Loans and advances at AC 104 980 -4 207 -3 769
interest rate options
Debt securities held at FVOCI 23 -6 -6
Debt securities issued at AC 0 0 0
Deposits at AC 14 574 -1 432 644
Total 125 692 123 930 310 261 3 254 Total -3 254 0 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 20 073 20 073 47 115 177
Currency and 1 204 1 257 0 39 -13
interest rate swaps
Total 21 277 21 330 47 154 164 Total -167 -3 -1 046
Hedge of net investments in foreign operations
Total31 755 1 807 0 505 18 Total -18 0 20
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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\u2022 The Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a
\n
negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
\n
derivatives.
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\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
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and risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these
\n
techniques will be used to limit any resulting accounting mismatch.
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\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
\n
applied came to -322 million euros. The accumulated amount of fair value hedge adjustments remaining on the balance sheet
\n
for any hedged items that have ceased to be adjusted for hedging gains and losses amounted to -82 million euros. These
\n
adjustments are amortised to profit or loss.
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\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and
\n
accumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to
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accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
\n
balance sheet.
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\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk became less
\n
negative in 2023 due to the general decline in interest rates. The \u2018Profit/loss on positions in portfolios hedged against interest
\n
rate risk\u2019 balance sheet item on the liabilities side of the balance sheet also became less negative for the same reason.
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\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
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Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR)InflowOutflow
Not more than three months34-79
More than three but not more than six months52-103
More than six months but not more than one year115-213
More than one but not more than two years202-401
More than two but not more than five years335-625
More than five years537-671
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Note 5.2: Tax assets and tax liabilities
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(in millions of EUR)31-12-202331-12-2022
CURRENT TAXES
Current tax assets176174
Current tax liabilities99150
DEFERRED TAXES351689
Deferred tax assets by type of temporary difference1 1341 568
Employee benefits8578
Losses carried forward103186
Tangible and intangible fixed assets8077
Provisions for risks and charges1949
Impairment for losses on loans and advances207219
Financial instruments at fair value through profit or loss and fair value hedges92142
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations445705
Insurance contract liabilities3621
Other, incl. reinsurance contracts6890
Deferred tax liabilities by type of temporary difference784879
Employee benefits9599
Losses carried forward00
Tangible and intangible fixed assets4340
Provisions for risks and charges99
Impairment for losses on loans and advances33
Financial instruments at fair value through profit or loss and fair value hedges76129
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations4150
Insurance contract liabilities467516
Other, incl. reinsurance contracts5032
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets7241 001
Deferred tax liabilities373312
Unused tax losses and unused tax credits117151
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\u2022 Deferred tax assets are recognised to the extent that it is probable that, on the basis of realistic financial projections, taxable
\n
profit will be available against which the deductible temporary differences can be utilised in the foreseeable future (limited to
\n
a period of eight to ten years).
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\u2022 Unused tax losses and unused tax credits concern tax losses of group companies which are not capitalised due to insufficient
\n
proof of future taxable profit. Most tax losses and tax credits can be carried forward for 20 years or more.
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\u2022 The net change in deferred taxes (-338 million euros in 2023) breaks down as follows:
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\u25e6 The change in deferred tax assets of -433 million euros was accounted for chiefly by:
\n
- A net decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments
\n
measured at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-260 million
\n
euros), most of which was recorded directly in OCI.
\n
- A decrease in deferred tax assets via the income statement (-180 million euros), mainly due to the usage and write-
\n
offs of losses carried forward and provisions for liabilities and charges, reinforced by a decrease via the income
\n
statement in impairment for losses on loans and advances and financial instruments at fair value through profit or loss
\n
and fair value hedges.
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\u25e6 The change in deferred tax liabilities of -96 million euros was accounted for chiefly by:
\n
- A decrease in deferred tax liabilities for insurance contract liabilities (-49 million euros), with an amount of -120 million
\n
euros being recorded directly in OCI, which was partly offset, including via the income statement.
\n
- A decrease in deferred tax liabilities for financial instruments at fair value through profit or loss and fair value hedges
\n
(-53 million euros).
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\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank, KBC Insurance and \u010cSOB in
\n
the Czech Republic
\n
.
\n
\u2022 For more information on the contingent assets relating to the liquidation of KBC Bank Ireland, see Note 3.11.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n

\n
Note 5.5: Goodwill and other intangible assets
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Discount rates throughout the specific period
Goodwill outstanding31-12-202331-12-2022of cashflow projections
(in millions of EUR)31-12-202331-12-2022
K&H Bank18117315.2% \u2013 13.7%17.3% \u2013 13.3%
\u010cSOB (Czech Republic)25225913.0% \u2013 12.8%13.9% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna 6617613.0% \u2013 12.8%13.2% \u2013 12.8%
United Bulgarian Bank54654413.3% \u2013 12.5%12.5% \u2013 12.2%
DZI Insurance757511.2% \u2013 10.4%10.5% \u2013 8.1%
KBC Commercial Finance212112.0%9.9%
Pension Insurance Company UBB56568.3% \u2013 8.4%9.3% \u2013 9.1%
Rest4242\u2013\u2013
Total1 2401 346\u2013\u2013
\n\n\n\n\n\n\n\n
\n
\u2022 The period to which the cashflow budgets and projections relate is 10 years in most cases. This longer period is used to take
\n
account of current strong growth in the Central and Eastern European countries, where the growth rate is expected to
\n
develop towards a more moderate level in the longer term.
\n
\u2022 The growth rate used to extrapolate the cashflow projections after that period is equal to the expected long-term growth
\n
rate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2023 (also between
\n
3.2% and 4.7% in 2022).
\n
\u2022 No sensitivity analysis was carried out for entities where the recoverable amount exceeded the carrying value to such a large
\n
extent that no reasonably possible change in the key assumptions would result in the recoverable amount being less than or
\n
equal to the carrying value. The table gives an indication for the other entities of the impact of reasonable changes in the key
\n
assumptions on goodwill impairment.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sensitivity to reasonable changes1.0% increase1.0% increase5% decrease
(in millions of EUR)* in discount ratein targeted solvency ratioin annual net profit
United Bulgarian Bank-164-109-98
\u010cSOB Stavebn\u00ed sporitelna-9-9-12
* The impact of the changes is calculated ceteris paribus.
\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Note 5.6: Insurance \u2013 balance sheet
\n\n

\n
Note 5.6.1: Breakdown of (re)insurance contract assets and liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 00\u2014\u201400\u2013\u2013
Insurance contract liabilities 13 8625512 87892813 4445212 600792
LRC (liability for remaining coverage)13 674212 76291013 268212 491775
Unit-linked7980\u20147986750\u2013675
Non-unit-linked12 651212 650\u201412 383212 3810
Hybrid22501121122100110100
Accepted reinsurance00000000
LIC (liability for incurred claims)18853116181765010917
Unit-linked130\u201413120\u201312
Non-unit-linked1535399\u20141425092\u2013
Hybrid210174220175
Accepted reinsurance00000000
Assets for acquisition cost00000000
Non-life
Reinsurance assets6464\u2014\u20145555\u2013\u2013
Insurance contract liabilities2 9222 716206\u20142 7142 462252\u2013
LRC (liability for remaining coverage)701512190\u2014676439238\u2013
Personal insurance20516190\u201425316238\u2013
Motor Third-Party Liability (MTPL)160160\u2014\u2014145145\u2013\u2013
Liabilities other than MTPL2525\u2014\u20142424\u2013\u2013
Casco9696\u2014\u20148181\u2013\u2013
Property other than casco216216\u2014\u2014173173\u2013\u2013
Accepted reinsurance000\u2014-1-10\u2013
LIC (liability for incurred claims)2 2202 20416\u20142 0382 02414\u2013
Personal insurance61059416\u201454453014\u2013
Motor Third-Party Liability (MTPL)863863\u2014\u2014771771\u2013\u2013
Liabilities other than MTPL357357\u2014\u2014358358\u2013\u2013
Casco5353\u2014\u20144242\u2013\u2013
Property other than casco 319319\u2014\u2014306306\u2013\u2013
Accepted reinsurance18180\u201417170\u2013
Assets for acquisition cost000\u2014000\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Insurance contract liabilities relate to insurance contracts and investment contracts with a discretionary participation feature
\n
(DPF). Liabilities under investment contracts without DPF are measured at fair value. They concern unit-linked contracts, which
\n
are recognised under financial liabilities (see Note 4.1).
\n\n
\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
\n
are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
\n
that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
\n
assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
\n
mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
\n
overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
\n
incurred as a consequence of performing insurance activities for in-force contracts.
\n
- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
\n
for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
\n
and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
\n
court awards, le
\n
g
\n
islation and discountin
\n
g
\n
.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n\n\n
\u2022 For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on the
\n
individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate level of
\n
service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided
\n
for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
\u2022 Coverage units have a positive value and are floored to zero. In case of zero coverage units in a given period, no CSM is
\n
allocated to P&L as no services have been provided in the period. This is possible, for instance, where contracts provide for
\n
\u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but there is a mandatory waiting period for
\n
the client to be able to benefit from insurance coverage.
\n
\u2022 Defining IFRS 17 portfolios is a local decision, made by each insurance entity of KBC Group. It is country-specific, driven by the
\n
local product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown
\n
by product.
\n
\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance
\n
risk, from the unit-linked to the non-unit-linked component and vice versa.
\n
\u2022 Non-life LRC BBA (238 million euros in 2022, 190 million euros in 2023) represents the LRC health insurance (as part of personal
\n
insurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for
\n
personal insurance (530 million euros in 2022, 594 million euros in 2023) represents the incurred claims under personal insurance
\n
with regard to \u2018workmen\u2019s compensation\u2019 insurance, which are typically settled over a long period.
\n
\u2022 Most reinsurance programmes protect against the impact of exceptionally large loss events or accumulation of losses.
\n
Therefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the
\n
movements in reinsurance contract assets are limited.
\n
\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these
\n
bottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one
\n
with volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other liabilities for which
\n
bottom-up curves are used).
\n
Yield curve used to discount cashflows not varying based on underlying items; bottom-up method
\n
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CurrencyIlliquidity premiumPortfolio duration
1 year5 years10 years20 years
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment2.92%2.29%2.74%2.13%
CZKwith volatility adjustment4.83%3.19%3.70%3.98%
without volatility adjustment4.67%3.03%3.54%3.82%
HUFwith volatility adjustment5.55%5.25%6.29%5.49%
without volatility adjustment5.44%5.14%6.18%5.38%
BGNwith volatility adjustment3.16%2.50%3.00%2.43%
without volatility adjustment3.16%2.50%3.00%2.43%
2022
EURwith volatility adjustment4.77%3.26%3.36%1.87%
without volatility adjustment4.56%3.05%3.15%1.69%
CZKwith volatility adjustment7.92%4.46%4.51%6.04%
without volatility adjustment7.61%4.16%4.21%5.70%
HUFwith volatility adjustment13.96%7.21%8.52%9.40%
without volatility adjustment13.77%7.04%8.34%9.22%
BGNwith volatility adjustment5.27%3.57%3.67%1.97%
without volatility adjustment5.27%3.57%3.67%1.97%
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Note 5.6.2: Movements in Life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\n

\n\n\n\n
\u2022 When transitioning from IFRS 4 to IFRS 17, KBC applied the Full Retrospective Approach (FRA) for recent years. Applying the FRA
\n
for non-recent years is impracticable due to either a lack of historical data (data and hypotheses) or high costs associated
\n
with making information from the past available for FRA transition calculations. Where the FRA is impracticable, the Fair Value
\n
Approach (FVA) was predominantly used to determine the CSM on the transition date. The Modified Retrospective Approach
\n
(MRA) is rarely applied as this transition approach is overly complex and the costs do not outweigh the benefits. KBC calculates
\n
a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently adjusts a few assumptions or parameters.
\n
The adjustments relate to the inclusion in the IFRS 13 fair value of total expenses, i.e. including non-directly attributable
\n
expenses, and to the inclusion of a risk premium that covers not only non-financial risk, but also system and integration
\n
expenses and capital funding costs. All past years are combined into a single cohort for the FVA transition calculations. The
\n
FVA CSM ensues from cost and risk margin differences under IFRS 17 and IFRS 13 measurement approaches. The OCI amount
\n
on the transition date under the FVA is determined in accordance with the transition exemptions provided in IFRS 17.
\n
\u2022 Movement in insurance liabilities in 2023:
\n
- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised as
\n
KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income and
\n
expense between P&L and OCI.
\n
- The movement in the investment component of 1 284 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 Movement in insurance liabilities 2022:
\n
- Due to the increase in market interest rates during 2022, a gain in OCI of 2 614 million euros before tax is recognised as KBC
\n
made the accounting policy choice for all portfolios within the group to disaggregate IFIE between P&L and OCI. The Life
\n
insurance service result was positively impacted by a net reversal of loss component for an amount of 67 million euros.
\n
- The movement in the investment component of 1 606 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 On transitioning to IFRS 17, KBC applied mainly the fair value approach. Therefore, the amortised acquisition costs are low as
\n
they are not estimated under the fair value approach (i.e. the prospective approach).
\n
\u2022 The Life insurance contracts are typically long-term contracts and are therefore measured according to the BBA or VFA. The
\n
latter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold
\n
contracts mandatorily contain insurance risk cover.
\n
\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, which are repayable under all
\n
circumstances and as such include an investment component. For defining the investment component, an investigation based
\n
on the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life
\n
insurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered
\n
an investment component. Any associated surrender fees resulting from surrender are considered insurance components.
\n

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Note 5.6.3: Movements in Non-life insurance contract liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
\n\n\n\n\n\n\n\n\n\n
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\u2022 In Non-life, KBC applies mostly the PAA, as the coverage period is 1 year or less.
\n
\u2022 The cost of outstanding claims is based on the past claims development experience to project future claims development.
\n
These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling
\n
costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
\n
are mainly analysed per accident year. Large claims are separately addressed.
\n
\u2022 Estimates of salvage recoveries and subrogation reimbursement are considered in the measurement of the ultimate claim
\n
costs.
\n
\u2022 No asset for insurance acquisition cashflows is currently recognised.
\n

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Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Present value Risk
of future adjustment Total insurance
cashflows (incl. (incl. LIC)contract
(in millions of EUR)LIC)Contractual service marginliabilities
Insurance
contracts that Insurance
existed at the contracts that
transition date, existed at the
modified transition date, Other
retrospective fair value insurance
approach approach contracts
2023
Opening balance11 378112451 37748013 393
Insurance service result-39047-18198-139
Changes that relate to future service-3995641202245
New business-16117\u2013\u20131506
Changes in estimates reflected in the CSM -23839412074-1
Changes in estimates that result in onerous contract 00\u2013\u2013\u20130
losses and reversals
Changes that relate to current service38-8-5-113-26-113
CSM recognised in P&L0\u2013-5-113-26-143
Changes in the risk adjustment (expected)0-8\u2013\u2013\u2013-8
Experience adjustments38\u2013\u2013\u2013\u201338
Changes to liabilities for incurred claims related to past -29-2\u2013\u2013\u2013-30
service
Insurance finance income and expense809-7197818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income41840016205679
Total cashflows-252\u2013\u2013\u2013\u2013-252
Premiums received1 371\u2013\u2013\u2013\u20131 371
Claims paid-1 404\u2013\u2013\u2013\u2013-1 404
Costs other than claims paid-92\u2013\u2013\u2013\u2013-92
Acquisition costs paid-126\u2013\u2013\u2013\u2013-126
Other changes-7-12-6-1-14
Closing balance11 538152471 38768313 807
2022
Opening balance15 4261105598121516 787
Insurance service result-8314-7382263-189
Changes that relate to future service-84213-2476288-67
New business-12614\u2013\u201313523
Changes in estimates reflected in the CSM-6260-24761520
Changes in estimates that result in onerous contract -900\u2013\u2013\u2013-90
losses and reversals
Changes that relate to current service33-8-5-94-24-98
CSM recognised in P&L\u2013\u2013-5-94-24-123
Changes in the risk adjustment (expected)\u2013-8\u2013\u2013\u2013-8
Experience adjustments33\u2013\u2013\u2013\u201333
Changes to liabilities for incurred claims related to past -23-2\u2013\u2013\u2013-25
service
Insurance finance income and expense-2 519-2161-2 513
In P&L83216192
In OCI-2 602-4\u2013\u2013\u2013-2 606
Total changes in comprehensive income-3 3501-7389264-2 702
Total cashflows-700\u2013\u2013\u2013\u2013-700
Premiums received1 231\u2013\u2013\u2013\u20131 231
Claims paid-1 742\u2013\u2013\u2013\u2013-1 742
Costs other than claims paid-84\u2013\u2013\u2013\u2013-84
Acquisition costs paid-105\u2013\u2013\u2013\u2013-105
Other changes21-3718
Closing balance11 378112451 37748013 393
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\n\n\n\n
\u2022 The amount recognised in P&L as release of the CSM is determined by:
\n
\u25e6 Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by the
\n
insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period.
\n
\u25e6 Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected to be
\n
provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current period.
\n
\u2022 Main movements in 2023: there were no material exceptional movements.
\n
\u2022 Main movements in 2022: the net movement in the loss component amounted to 67 million euros and was mainly explained by
\n
(i) new business in the year 2022 for which a loss component of -24 million euros was recognised and (ii) a reversal of loss
\n
component of 90 million euros due to increasing interest rates, resulting in a higher margin expected to be earned on future
\n
premiums. The increasing interest rates were also the main reason for the increase of 626 million euros in the CSM, as more
\n
margin was expected to be earned on future premiums.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Present value Risk
of future adjustment
cashflows (incl. (incl. LIC)Total insurance
(in millions of EUR)LIC)Contractual service margincontract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2023
Opening balance17759367252
Insurance service result1116-417-7
Changes that relate to future service919-38100
New business-181\u2013170
Changes in estimates reflected in the CSM2717-38-70
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service2-3-3-4-7
CSM recognised in P&L\u2013\u2013-3-4-6
Changes in the risk adjustment (expected)\u2013-3\u2013\u2013-3
Experience adjustments2\u2013\u2013\u20132
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-29-1901-48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income-17-4-417-54
Total cashflows8\u2013\u2013\u20138
Premiums received43\u2013\u2013\u201343
Claims paid-24\u2013\u2013\u2013-24
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-7\u2013\u2013\u2013-7
Other changes00000
Closing balance8715274206
2022
Opening balance1361179636386
Insurance service result-36-3-331-11
Changes that relate to future service-3612340
New business-181\u2013170
Changes in estimates reflected in the CSM-1902170
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service0-4-5-3-11
CSM recognised in P&L\u2013\u2013-5-3-8
Changes in the risk adjustment (expected)\u2013-4\u2013\u2013-4
Experience adjustments0\u2013\u2013\u20130
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-93-3900-132
In P&L-1000-2
In OCI-92-39\u2013\u2013-131
Total changes in comprehensive income-129-42-330-144
Total cashflows9\u2013\u2013\u20139
Premiums received39\u2013\u2013\u201339
Claims paid-20\u2013\u2013\u2013-20
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-6\u2013\u2013\u2013-6
Other changes00000
Closing balance17759367252
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\u2022 In Non-life, the BBA is applied to \u2018individual health insurance\u2019.
\n
\u2022 The decline recognised in insurance finance income and expense through OCI of 48 million euros in 2023 is accounted for by
\n
the increase in the discount curve in the long term (more than 20 years). The decline of 131 million euros in 2022 is attributable
\n
to the sharp increase in the discount curve during the first half of the year. A typical feature of the hospitalisation portfolio is
\n
that interest rate movements have a greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums
\n
are levelled (constant \u2018cash in\u2019 during the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019
\n
more towards the end of the contract).
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Note 5.6.6: New business (BBA/VFA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Re)insurance (Re)insurance
(in millions of EUR)contracts issuedcontracts acquiredTotal
Not onerousOnerousNot onerousOnerous
2023
Estimates of present value of cash outflows1 194212001 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows-1 378-20700-1 585
Risk adjustment for non-financial risk1620018
Contractual service margin166-00166
Increase in insurance contract liabilities: loss component\u20137\u201307
2022
Estimates of present value of cash outflows781440001 221
Expected claims657375001 032
Expected other insurance service expenses41430084
Insurance acquisition cashflows832200105
Estimates of present value of cash inflows-946-41900-1 365
Risk adjustment for non-financial risk1230015
Contractual service margin152\u20130\u2013152
Increase in insurance contract liabilities: loss component\u201324\u2013024
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\n
\n
\u2022 In 2022, the low interest-rate environment at the beginning of the year mainly explained the sale of onerous business. Increasing
\n
interest rates improved the overall profitability of new business (insurance and the financial margin) during the year.
\n

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Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (BBA/VFA)
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CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR)1st year2nd year3rd year4th year5th year6-10th year+10th year
2023
Life149142135129122529973
Non-life666652451
2022
Life123118113109105471928
Non-life887773062
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\u2022 The table shows the future CSM recognition for the next 25 years.
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Note 5.6.8: Fair value of assets backing insurance and investment contracts
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
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Note 5.6.9: Changes in accumulated OCI for FVOCI assets related to insurance contracts for which the fair value transition
\n
approach is used
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(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while maintaining
\n
the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between covering
\n
financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently the years
\n
thereafter until the portfolio subject to the transition approach reaches maturity.
\n
However, following the first-time adoption of
\n
IFRS 17 a large part of the bond portfolio of KBC Insurance was transferred to FVOCI (see Note 1.6 for more information), resulting
\n
in a very limited imbalance in 2022 and 2023.
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
\n\n\n\n\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\n

\n\n\n

\n
Note 5.7: Provisions for risks and charges
\n\n
Note 5.7.1: Overview
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total provisions for risks and charges183418
Provisions for off-balance-sheet commitments and financial guarantees91114
Provisions for other risks and charges92305
Provisions for restructuring3792
Provisions for taxes and pending legal disputes37192
Other1820
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Note 5.7.2: Details of off-balance-sheet commitments and financial guarantees
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Subject to
Subject to 12-Subject to lifetime ECL \u2013
(in millions of EUR)month ECLlifetime ECLnon-performingTotal
31-12-2023
Provisions on 1 January193560114
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-2 3 1 2
Stage 2 (lifetime ECL) 1-13 9-3
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 1-2-2
New financial assets 10 4 2 16
Changes in risk parameters during the reporting period-3-6-12-21
Changes in the model or methodology 0 0 0 0
Derecognised financial assets-3-3-3-9
Other 0 0 2 2
Movements without an impact on results
Derecognised financial assets 0 0 0 0
Changes in the scope of consolidation 0-1 0-1
Other 0 1-7-7
Provisions on 31 December 22 20 49 91
31-12-2022
Provisions on 1 January192191130
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-610610
Stage 2 (lifetime ECL)0-572
Stage 3 \u2018non-performing\u2019 (lifetime ECL)06-24
New financial assets84012
Changes in risk parameters during the reporting period-11-45-45
Changes in the model or methodology0000
Derecognised financial assets-1-1-1-3
Other0-50-5
Movements without an impact on results
Derecognised financial assets0000
Changes in the scope of consolidation1236
Other0112
Provisions on 31 December193560114
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\u2022 Also see Note 6.1.
\n

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\u2022 Information relating to the main legal disputes pending: claims filed against KBC group companies are \u2013 in keeping with IFRS
\n
rules \u2013 treated on the basis of an assessment of whether they will lead to an outflow of resources (i.e. \u2018probable outflow\u2019,
\n
\u2018possible outflow\u2019 or \u2018remotely probable outflow\u2019). Provisions are set aside for \u2018probable outflow\u2019 cases (see \u2018Notes on the
\n
accounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial
\n
statements if such cases might have a material impact on the balance sheet (i.e. when the claim could lead to a possible
\n
outflow of more than 50 million euros). All other claims (\u2018remotely probable outflow\u2019), of whatever magnitude, that represent a
\n
minor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is
\n
limited in order not to prejudice the position of the group in ongoing litigation.
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\n\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
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by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
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Note 5.9: Retirement benefit obligations
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period2 5803 335
Current service cost95 129
Interest cost104 26
Actuarial gain or loss resulting from changes in demographic assumptions-3-10
Actuarial gain or loss resulting from changes in financial assumptions152-814
Experience adjustments-56 58
Past-service cost00
Benefits paid-149 -129
Other0-14
Defined benefit obligations at the end of the period2 7242 580
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period2 7463 244
Actual return on plan assets222-499
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 115 25
Employer contributions93 94
Plan participant contributions20 19
Benefits paid-149-129
Other516
Fair value of plan assets at the end of the period2 9362 746
of which financial instruments issued by the group00
of which property occupied by KBC22
Funded status
Plan assets in excess of defined benefit obligations212 166
Reimbursement rights00
Asset ceiling limit-70-12
Unfunded accrued/prepaid pension cost142 153
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period153-128
Amounts recognised in the income statement-65-112
Amounts recognised in other comprehensive income-43 299
Employer contributions93 94
Other4-1
Unfunded accrued/prepaid pension cost at the end of the period142 153
Amounts recognised in the income statement-65-112
Current service cost-95-129
Interest cost10-1
Plan participant contributions20 19
Other000
Changes to the amounts recognised in other comprehensive income-43 299
Actuarial gain or loss resulting from changes in demographic assumptions3
Actuarial gain or loss resulting from changes in financial assumptions-152 814
Actuarial result on plan assets107-524
Experience adjustments56-58
Adjustments to asset ceiling limits125
Other-58 31
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans-18-21
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\u2022 Retirement benefits that are actively accrued for the Belgium-based staff of KBC Bank, KBC Insurance and most of their
\n
Belgian subsidiaries are accrued exclusively through the KBC pension fund. Up until year-end 2018, employer-funded
\n
retirement benefits had accrued primarily through a defined benefit plan, where the benefit is calculated based on the final
\n
salary of employees before they retire, the number of years they had been in the plan and a formula that applies a progressive
\n
rate scale. A defined contribution plan was introduced on 1 January 2014 for all new employees and any employees who had
\n
chosen to switch to it. In this plan, a contribution is deposited based on the current monthly salary and the amounts deposited
\n
are paid out together with the (guaranteed) return on retirement. Both types of pension plan are managed by the KBC pension
\n
fund, which uses the services of KBC Asset Management for the investment strategy. In addition, there are a number of smaller,
\n
closed group insurance schemes from the past that will continue to be funded and are managed by the KBC pension fund.
\n
On 1 January 2019, a new defined contribution plan was introduced to replace the one introduced in 2014. All employees were
\n
again given the one-time option of switching from the defined benefit plan to the new defined contribution plan. At year-end
\n
2023, 52% of employees were active participants in the defined benefit plan and 48% in the defined contribution plan (the
\n
corresponding figures at year-end 2022 were 55% and 45%).
\n
\u2022 The expected age of retirement of each employee and the expected wage inflation based on an inflation curve derived from
\n
the market value of inflation-linked bonds are taken into account in the calculation of the gross defined benefit obligations.
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Additional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund
Composition (31-12-2023)
Equity instruments31%
Bonds55%
Real estate13%
Cash1%
of which illiquid assets17%
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Composition (31-12-2022)
Equity instruments37%
Bonds46%
Real estate14%
Cash3%
of which illiquid assets18%
Contributions expected in 2024 (in millions of EUR)42
Regulatory frameworkPension plans are registered in collective labour agreements and incorporated into a set of regulations.
Annual reporting of funding levels to supervisory authorities (FSMA/NBB). Any underfunding must be
reported immediately to the supervisory authorities.
Risks for KBCInvestment risk and inflation risk.
ALM policyThe hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps.
The return portfolio aims to generate an extra return.
Plan amendmentsA new version of the employer-funded defined contribution plan was introduced on 1 January 2019. All
employees who had been signed up to the defined benefit plan were given the one-time option of
switching to this new plan.
Curtailments and settlementsNot applicable.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.20%
\u2022 Expected rate of salary increase2.75%
\u2022 Expected inflation rate2.42%
\u2022 Expected rate of increase in pensions\u2013
\u2022 Weighted average duration of the obligations10 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate11.83%
\u2022 an increase of 1% in the expected inflation rate9.17%
\u2022 an increase that is 1% higher than the expected real 12.18%
increase in salary
\u2022 an increase of one year in life expectancy\u2013
The impact of the following assumptions has not been Decreasing mortality rates. Pension benefits are paid out
calculated:in capital, so longevity risk is immaterial.
Staff turnover rates: the impact of the changes remains limited.
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Additional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund
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Contributions expected in 2024 (in millions of EUR)45
Regulatory frameworkPursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of
1.75% on employee and employer contributions.
Risks for KBCInvestment risk.
ValuationRetirement benefit obligations are measured on the basis of the accrued benefits on the reporting date,
making a projection of these benefits (at the rate of interest guaranteed by law) until the expected age
of retirement, and discounting the resulting benefits.
KBC offers two types of defined contribution plan: one that is financed through employee contributions
and one through employer contributions. The valuation of retirement benefit obligations for the
employer-funded defined contribution plan takes account of future contributions. However, it is not
taken into account for the valuation of the employee-funded defined contribution plan, because the
employer\u2019s obligation for that plan only relates to the guaranteed minimum interest rate.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.31%
\u2022 Weighted average duration of the obligations16 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate19.0%
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Note 6.1: Off-balance-sheet commitments and financial guarantees given and received
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(in millions of EUR)31-12-202331-12-2022
Nominal amountProvisionNet exposureNominal ProvisionNet exposure
amount
Undrawn portion of credit lines granted
Stage 141 551 2041 53139 1341739 117
Stage 26 683 146 6708 077268 051
Stage 3 79 5 73511338
Total48 313 3948 27447 2625647 206
of which irrevocable credit lines27 856 2327 83326 6182726 591
Financial guarantees given
Stage 17 860 27 8597 60027 598
Stage 22 952 62 9473 13983 131
Stage 3 133 44 901194476
Total10 946 5110 89510 8585410 805
Other commitments given
Total1 421 11 4201 44041 436
Off-balance-sheet commitments and financial guarantees
Total60 680 9160 58959 56111459 447
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\u2022 Fair value of financial guarantees: based on the available market value.
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\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
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euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
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billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
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estate of the covered bond programme (16.6 billion euros at year-end 2022).
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\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner;
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see table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such
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as default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will
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organise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is
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primarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided
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in Note 4.3.
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\u2022 Collateral acquired through foreclosure came to 3 million euros in 2023 (4 million euros in 2022).
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Collateral received (which may be sold or repledgedFair value of collateral sold or
in the absence of default by the owner) (in millions of EUR)Fair value of collateral receivedrepledged
31-12-202331-12-202231-12-202331-12-2022
Financial assets42 21530 1265 2677 792
Equity instruments211622
Debt securities41 95929 8765 2657 790
Loans and advances23523400
Cash0000
Other0000
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\u2022 In the years 2016-2022, KBC contributed to the Single Resolution Fund (SRF) by means of irrevocable payment commitments
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(IPCs) in the amount of 90 million euros, which are fully covered by cash collateral. In line with industry practice, the following
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accounting treatment is applied to IPCs: (\u00b0) the amount of cash collateral is recognised as a financial asset and
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(\u00b0) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral
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as a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that
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interest is received on the amount outstanding. In a recent decision, the General Court of the EU ruled that in a scenario in
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which a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal
\n
in this case at the European Court of Justice before considering the potential implications on the accounting treatment of
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IPCs. The 90 million euros is deducted in the calculation of the common equity capital.
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(in millions of EUR)20232022
Total322252
Total broken down by IFRS portfolio
Financial instruments MFVPL other than held for trading 1 250-2 016
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 134566
Other financial instruments at fair value through profit or loss -1 1031 941
Foreign exchange trading155-90
Fair value adjustments in hedge accounting-113-150
Hedge accounting broken down by type of hedge
Fair value micro hedges-25
Changes in the fair value of the hedged items-269624
Changes in the fair value of the hedging derivatives267-619
Cashflow hedges-9-3
Changes in the fair value of the hedging derivatives, ineffective portion-9-3
Hedges of net investments in foreign operations, ineffective portion00
Portfolio hedge of interest rate risk70
Changes in the fair value of the hedged items1 029-3 254
Changes in the fair value of the hedging derivatives-1 0223 254
Discontinuation of hedge accounting for fair value hedges-58-75
Discontinuation of hedge accounting in the event of cashflow hedges-52-77
Total broken down by driver
Dealing room288245
Change in the value of derivatives used for asset/liability management purposes and Other-47-7
Market value adjustments (MVA)-1580
Investment result for unit-linked insurance contracts under IFRS 1796-65
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Note 3.6: Insurance results
\n\n

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\n\n

\n\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
\n
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
\n
\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
\n
- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
\n
fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
\n
\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n

\n\n\n

\n\n
Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Investment result (OCI) on financial assets at FVOCI 595 1 49 0 644
Change in Insurance finance income and expense \u2013 OCI, before -538-1-23\u2014-561
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -537 0-23\u2014-560
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under -1-1\u2014\u2014-1
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI 56 0 25 0 81
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7\u2014 7
Deferred taxes\u2014\u2014\u201413 13
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 3313101
2022
Investment result (OCI) on financial assets at FVOCI-2 716-2-236-26-2 979
Change in insurance finance income and expense \u2013 OCI, before 2 6151424\u20133 039
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, 2 6130424\u20133 037
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 11\u2013\u20131
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI-1020188-2660
Change in reinsurance finance income and expense \u2013 OCI0\u2013-25\u2013-25
Deferred taxes\u2013\u2013\u2013-106-106
Net insurance and investment result after reinsurance, after tax \u2013 OCI-1020164-132-71
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the \u2018Effect
\n
of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019. This is the result of a
\n
decision by KBC to categorise a large part of the bond portfolio backing Life insurance contracts and part of the bond portfolio
\n
backing Non-life insurance contracts as FVOCI assets, resulting in a natural hedge between investment results on financial
\n
assets at FVOCI and IFIE through OCI.
\n
\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
\n
\u2022 In addition to the investment result of the financial assets recognised in profit or loss (Note 3.6.1) and in OCI (Note 3.6.2), results
\n
realised on FVOCI equity instruments are recognised directly in equity (see \u2018Transfer from revaluation reserves to retained
\n
earnings upon realisation\u2019 in \u2018Consolidated statement of changes in equity\u2019). The corresponding figures for 2023 and 2022 were
\n
24 million euros and 133 million euros, respectively, at insurance level of the 21 million euros and 152 million euros at group level.
\n

\n\n\n

\n\n\n

\n\n\n

\n\n
Note 3.6.3: Insurance revenues (Life and Non-life) by component
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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Note 3.6.4: Life insurance sales
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(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
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\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
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under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
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commission income\u2019.
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\u2022 Hybrid products: see Note 5.6.1.
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Note 3.6.5: Non-life insurance profitability by product (P&L)
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Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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(in millions of EUR*)20232022
Total-215-282
Impairment on financial assets at AC and at FVOCI16-154
(impairment on loans)
By IFRS category
Financial assets at amortised cost17-155
Financial assets at fair value through OCI-11
By product
Loans and advances-5-177
Debt securities7-3
Off-balance-sheet commitments and financial guarantees1525
By type
Stage 1 (12-month ECL)-415
Stage 2 (lifetime ECL)161-107
Stage 3 (lifetime ECL)-92-60
Purchased or originated credit impaired assets-118
By business unit/country
Belgium-82-35
Czech Republic70-46
International Markets19-78
Slovakia8-19
Hungary11-29
Bulgaria0-30
Group Centre85
Impairment on goodwill-109-5
Impairment on other-122-123
Intangible fixed assets (other than goodwill)-77-34
Property and equipment (including investment property)-15-18
Associated companies and joint ventures00
Other-30-71
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* Positive figures indicate a reversal and hence a positive impact on results
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\u2022 We create the models for the various portfolios using typical PD, EAD and LGD inputs, as well as macro- and microeconomic
\n
variables to the extent that there is a statistical relationship. The macroeconomic variables are GDP growth, the unemployment
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rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation. Microeconomic variables
\n
include, for example, confidence indicators, the harmonised index of consumer prices (HICP), the producer price index (PPI), and
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so on. As a result of regular back-testing, models may change and economic variables may be reassessed. The following table
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gives the base-case scenario for the three key indicators (GDP growth, unemployment rate and house price index) for each of
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our core countries for the coming years. After that, we take into account a gradual linear transition towards a stable situation.
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Macroeconomic base-case scenarios \u2013 key indicators
(used for situation at year-end 2023) *202320242025
Real GDP growth
Belgium1.4%0.8%1.1%
Czech Republic-0.5%1.4%3.1%
Hungary-0.5%2.8%3.3%
Slovakia1.2%2.2%3.3%
Bulgaria1.9%2.3%3.0%
Unemployment rate
Belgium5.8%5.7%5.6%
Czech Republic2.8%3.3%3.2%
Hungary4.1%3.8%3.6%
Slovakia6.1%6.3%6.0%
Bulgaria4.5%4.2%4.0%
House price index
Belgium1.0%1.5%2.5%
Czech Republic-2.0%1.7%3.5%
Hungary0.0%3.0%4.0%
Slovakia-3.5%0.0%3.5%
Bulgaria8.4%0.7%3.0%
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* This deviates from the (more recent) estimates provided in the \u2018Report of the Board of Directors\u2019, under the \u2018Market conditions in our core markets in 2023\u2019 and \u2018Our business units\u2019 sections.
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\u2022 We use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
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weightings at year-end 2023 were 60% for the \u2018base\u2019 scenario, 10% for the \u2018up\u2019 scenario and 30% for the \u2018down\u2019 scenario. The
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forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on the collectively
\n
assessed ECL (i.e. without the ECL for individually assessed loans of 1.6 billion euros at year-end 2023 and year-end 2022) shows
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that the \u2018base\u2019 scenario generates an ECL of 0.9 billion euros (1.0 billion euros in 2022), which is 0.1 billion euros lower than for
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the \u2018down\u2019 scenario (0.1 billion euros in 2022) and 0.0 billion euros higher than for the \u2018up\u2019 scenario (0.0 billion euros in 2022). The
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assessed scenario-weighted collective ECL (that was recognised) amounted to 0.9 billion euros (1.0 billion euros in 2022). These
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amounts include the ECL related to geopolitical and emerging risks.
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100% 100% 100%
Collectively assessed ECL by country (2023, in billions of EUR)base-case optimistic pessimistic
scenarioscenarioscenario
Total0.90.91.0
Belgium0.30.30.3
Czech Republic0.30.30.3
Slovakia0.10.10.1
Hungary0.10.10.1
Bulgaria0.10.10.2
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\u2022 As set out in the \u2018How do we manage our risks?\u2019 section, KBC considers ESG risks in its credit risk management processes. The
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vulnerability of individual corporate clients to specific ESG risks may become apparent during the term of the loan in client-
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specific credit risk figures, such as credit risk ratings and collateral valuations affecting the ECL calculation. Especially in terms
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of climate risk, which may have considerable consequences for certain sectors in the longer term, the impact on our loan
\n
portfolio is not expected to occur within the time horizon considered for the ECL measurement.
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\u2022 Impairment on goodwill: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the reduction
\n
of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future projected earnings.
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This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros (based on the exchange
\n
rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of \u010cSOB Stavebn\u00ed (the former
\n
\u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time, which resulted in a one-off gain
\n
of 82 million euros. On 11 May 2023, the Czech government coalition presented its fiscal stabilisation package, which included
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a proposal for the reduction of the building saving state subsidy. The Czech government coalition\u2019s compromise was reflected
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in the government proposal, which was approved by the Czech Parliament on 8 November 2023.
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\u2022 Reserve for geopolitical and emerging risks: the outstanding balance of the ECL for geopolitical and emerging risks came to
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256 million euros at year-end 2023; the corresponding figure at year-end 2022 was 429 million euros. This decline is largely
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attributable to the improved micro- and macroeconomic outlook and the finalisation of the sale of KBC Bank Ireland\u2019s loan
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portfolio. This ECL is determined based on individual counterparties and certain sub-segments in our portfolio which are
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deemed to have incurred an increase in credit risk because they are either (\u00b0) exposed to the current emerging risks (high
\n
inflation and interest rates, high(er) energy prices, supply chain disruption) which affect our corporate and SME clients with
\n
activities in a number of vulnerable sectors (e.g., automotive, construction, chemicals and metals) and retail clients with a
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limited buffer to absorb the higher cost of living and/or to make higher repayments ensuing from higher interest rates, or (\u00b0)
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directly or indirectly exposed to ongoing military conflicts, such as the one in Ukraine. This analysis shows that for 12 billion euros
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in \u2018Stage 1\u2019 positions, which are not (yet) included in the standard staging assessment, credit risk has increased considerably.
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At year-end 2022, this was 14 billion euros.
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Note 4.2: Financial assets and liabilities, breakdown by portfolio and quality
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Note 4.2.1: Impaired financial assets
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
\n
customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
\n
to:
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\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
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\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
\n
due primarily to:
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\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
\n
indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
\n
billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
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Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
\n
with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
\n
loans and advances at amortised cost in \u2018Stage 1\u2019.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
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\u2018Stage 1\u2019:
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\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
\n
offset by a decline in companies), and related primarily to net investments.
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\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
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\u25e6 Derecognised financial assets.
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\u25e6 Partly offset by other changes (see Note 3.9).
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At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
\n
respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
\n
amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
\n
(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
\n
in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
\n
accounting policies at KBC Bank Bulgaria for determining impairment.
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For information on other changes, see Note 3.9.
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\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
\n
audited this section).
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\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
\n
modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
\n
modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
\n
2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
\n
(see Note 3.9).
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\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
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to enforcement activities; the corresponding figure in 2022 was 80 million euros.
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Note 4.2.2: Impairment details for loans and advances at amortised cost
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Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
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1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
\n
2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
\n
3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
\n
before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
\n
\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
\n
on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
\n
securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
\n
\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
\n
(see Note 3.9).
\n
\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
\n
changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
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\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
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\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n

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Note 4.4: Fair value of financial assets and liabilities \u2013 general
\n
\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
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\n
* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
\n
\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
\n
\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
\n
\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
\n
\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
\n
\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
\n
prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
\n
obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
\n
rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
\n
analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
\n
assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
\n
involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
\n
considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
\n
significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
\n
significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
\n
\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
\n
financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
\n
indicated in the table, a small portion may actually be classified in another level.
\n
\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
\n
period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
\n
\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
\n
euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
\n
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
\n
- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new transactions.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
\n
- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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Note 4.8: Derivatives
\n
\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately
\n
25% are hedging derivatives.
\n
\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited
\n
open positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are
\n
economically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional
\n
amounts but also to result-neutral revaluations on a net basis.
\n
\u2022 A limited number of trading derivatives are ALM derivatives included in the banking book, which are used to hedge economic
\n
risk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only
\n
a limited number of the ALM derivatives for foreign currencies are included in hedge accounting.
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Note 4.8.1: Trading derivatives
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(in millions of EUR)31-12-202331-12-2022
Carrying valueNotional amounts*Carrying valueNotional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total4 6185 501598 880591 9236 2798 038567 205568 302
Interest rate contracts1 8212 252403 723395 1702 6423 678379 270377 754
of which interest rate swaps 1 6842 169394 018389 1842 4293 542368 144371 294
and futures
of which options 137 839 7055 986 214 13611 1266 460
Foreign exchange contracts2 3182 481180 438182 7193 1663 620174 787177 841
of which currency and interest 2 2462 409176 708176 8293 0813 509171 878172 361
rate swaps, forward foreign
exchange transactions and
futures
of which options 72 723 7305 890 85 1122 9095 480
Equity contracts 471 76114 38113 698 452 72012 81212 371
of which equity swaps 385 39311 31411 031 414 41010 55310 394
of which options 85 3683 0672 667 37 3112 2591 977
Credit contracts 0 0 0 0 0 0 0 0
of which credit default swaps 0 0 0 0 0 0 0 0
Commodity and other contracts 8 7 338 336 20 19 337 335
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* In this table, both legs of the derivatives are reported in the notional amounts.
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Note 4.8.2: Hedging derivatives
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31-12-2023
(in millions of EUR)Hedging instrumentHedged itemImpact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategyPurchasedSoldAssetsLiabilitieschanges)adjustments
Fair value micro hedge
Interest rate swaps31 86431 86497112267Debt securities held at AC6 547-300377
Currency and 00000Loans and advances at AC 601753
interest rate swaps
Debt securities held at FVOCI2 999-25124
Debt securities issued at AC21 285-560-774
Deposits at AC000
Total31 86431 86497112267Total-269-2-
Portfolio hedge of interest rate risk
Interest rate swaps143 932143 93293123-995Debt securities held at AC937-7115
Currency and 1 6180700-27Loans and advances at AC125 541-2 4731 841
interest rate options
Debt securities held at FVOCI8539
Debt securities issued at AC000
Deposits at AC15 938-507-936
Total145 550143 932163123-1 022Total1 0297-
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps19 60319 60315127401
Currency and 1 1811 205122-14
interest rate swaps
Total20 78420 80817149387Total-395-9-611
Hedge of net investments in foreign operations
Total32 5792 5701946077Total-77092
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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31-12-2022
(in millions of EUR) Hedging instrument Hedged item Impact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notionalamounts 1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy PurchasedSold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 22 753 22 753 185 102 -619 Debt securities held at AC 4 007 -684 -323
Currency and 00000Loans and advances at AC 683 70 -310
interest rate swaps
Debt securities held at FVOCI 1 342 -152 -176
Debt securities issued at AC 14 624 -1 334 1 432
Deposits at AC000
Total2275322753185102-619Total6245-
Portfolio hedge of interest rate risk
Interest rate swaps 123 930 123 930 209 261 3 172 Debt securities held at AC 359 -122 -123
Currency and 1 762 0 101 0 82 Loans and advances at AC 104 980 -4 207 -3 769
interest rate options
Debt securities held at FVOCI 23 -6 -6
Debt securities issued at AC 0 0 0
Deposits at AC 14 574 -1 432 644
Total 125 692 123 930 310 261 3 254 Total -3 254 0 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 20 073 20 073 47 115 177
Currency and 1 204 1 257 0 39 -13
interest rate swaps
Total 21 277 21 330 47 154 164 Total -167 -3 -1 046
Hedge of net investments in foreign operations
Total31 755 1 807 0 505 18 Total -18 0 20
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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\u2022 The Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a
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negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
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derivatives.
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\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
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and risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these
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techniques will be used to limit any resulting accounting mismatch.
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\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
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applied came to -322 million euros. The accumulated amount of fair value hedge adjustments remaining on the balance sheet
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for any hedged items that have ceased to be adjusted for hedging gains and losses amounted to -82 million euros. These
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adjustments are amortised to profit or loss.
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\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and
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accumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to
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accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
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balance sheet.
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\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk became less
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negative in 2023 due to the general decline in interest rates. The \u2018Profit/loss on positions in portfolios hedged against interest
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rate risk\u2019 balance sheet item on the liabilities side of the balance sheet also became less negative for the same reason.
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\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
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Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR)InflowOutflow
Not more than three months34-79
More than three but not more than six months52-103
More than six months but not more than one year115-213
More than one but not more than two years202-401
More than two but not more than five years335-625
More than five years537-671
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Note 5.2: Tax assets and tax liabilities
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
CURRENT TAXES
Current tax assets176174
Current tax liabilities99150
DEFERRED TAXES351689
Deferred tax assets by type of temporary difference1 1341 568
Employee benefits8578
Losses carried forward103186
Tangible and intangible fixed assets8077
Provisions for risks and charges1949
Impairment for losses on loans and advances207219
Financial instruments at fair value through profit or loss and fair value hedges92142
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations445705
Insurance contract liabilities3621
Other, incl. reinsurance contracts6890
Deferred tax liabilities by type of temporary difference784879
Employee benefits9599
Losses carried forward00
Tangible and intangible fixed assets4340
Provisions for risks and charges99
Impairment for losses on loans and advances33
Financial instruments at fair value through profit or loss and fair value hedges76129
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations4150
Insurance contract liabilities467516
Other, incl. reinsurance contracts5032
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets7241 001
Deferred tax liabilities373312
Unused tax losses and unused tax credits117151
\n\n\n\n\n\n\n\n\n\n
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\u2022 Deferred tax assets are recognised to the extent that it is probable that, on the basis of realistic financial projections, taxable
\n
profit will be available against which the deductible temporary differences can be utilised in the foreseeable future (limited to
\n
a period of eight to ten years).
\n
\u2022 Unused tax losses and unused tax credits concern tax losses of group companies which are not capitalised due to insufficient
\n
proof of future taxable profit. Most tax losses and tax credits can be carried forward for 20 years or more.
\n
\u2022 The net change in deferred taxes (-338 million euros in 2023) breaks down as follows:
\n
\u25e6 The change in deferred tax assets of -433 million euros was accounted for chiefly by:
\n
- A net decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments
\n
measured at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-260 million
\n
euros), most of which was recorded directly in OCI.
\n
- A decrease in deferred tax assets via the income statement (-180 million euros), mainly due to the usage and write-
\n
offs of losses carried forward and provisions for liabilities and charges, reinforced by a decrease via the income
\n
statement in impairment for losses on loans and advances and financial instruments at fair value through profit or loss
\n
and fair value hedges.
\n
\u25e6 The change in deferred tax liabilities of -96 million euros was accounted for chiefly by:
\n
- A decrease in deferred tax liabilities for insurance contract liabilities (-49 million euros), with an amount of -120 million
\n
euros being recorded directly in OCI, which was partly offset, including via the income statement.
\n
- A decrease in deferred tax liabilities for financial instruments at fair value through profit or loss and fair value hedges
\n
(-53 million euros).
\n
\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank, KBC Insurance and \u010cSOB in
\n
the Czech Republic
\n
.
\n
\u2022 For more information on the contingent assets relating to the liquidation of KBC Bank Ireland, see Note 3.11.
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Note 5.5: Goodwill and other intangible assets
\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
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Discount rates throughout the specific period
Goodwill outstanding31-12-202331-12-2022of cashflow projections
(in millions of EUR)31-12-202331-12-2022
K&H Bank18117315.2% \u2013 13.7%17.3% \u2013 13.3%
\u010cSOB (Czech Republic)25225913.0% \u2013 12.8%13.9% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna 6617613.0% \u2013 12.8%13.2% \u2013 12.8%
United Bulgarian Bank54654413.3% \u2013 12.5%12.5% \u2013 12.2%
DZI Insurance757511.2% \u2013 10.4%10.5% \u2013 8.1%
KBC Commercial Finance212112.0%9.9%
Pension Insurance Company UBB56568.3% \u2013 8.4%9.3% \u2013 9.1%
Rest4242\u2013\u2013
Total1 2401 346\u2013\u2013
\n\n\n\n\n\n\n\n
\n
\u2022 The period to which the cashflow budgets and projections relate is 10 years in most cases. This longer period is used to take
\n
account of current strong growth in the Central and Eastern European countries, where the growth rate is expected to
\n
develop towards a more moderate level in the longer term.
\n
\u2022 The growth rate used to extrapolate the cashflow projections after that period is equal to the expected long-term growth
\n
rate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2023 (also between
\n
3.2% and 4.7% in 2022).
\n
\u2022 No sensitivity analysis was carried out for entities where the recoverable amount exceeded the carrying value to such a large
\n
extent that no reasonably possible change in the key assumptions would result in the recoverable amount being less than or
\n
equal to the carrying value. The table gives an indication for the other entities of the impact of reasonable changes in the key
\n
assumptions on goodwill impairment.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sensitivity to reasonable changes1.0% increase1.0% increase5% decrease
(in millions of EUR)* in discount ratein targeted solvency ratioin annual net profit
United Bulgarian Bank-164-109-98
\u010cSOB Stavebn\u00ed sporitelna-9-9-12
* The impact of the changes is calculated ceteris paribus.
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Note 5.6: Insurance \u2013 balance sheet
\n\n

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Note 5.6.1: Breakdown of (re)insurance contract assets and liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 00\u2014\u201400\u2013\u2013
Insurance contract liabilities 13 8625512 87892813 4445212 600792
LRC (liability for remaining coverage)13 674212 76291013 268212 491775
Unit-linked7980\u20147986750\u2013675
Non-unit-linked12 651212 650\u201412 383212 3810
Hybrid22501121122100110100
Accepted reinsurance00000000
LIC (liability for incurred claims)18853116181765010917
Unit-linked130\u201413120\u201312
Non-unit-linked1535399\u20141425092\u2013
Hybrid210174220175
Accepted reinsurance00000000
Assets for acquisition cost00000000
Non-life
Reinsurance assets6464\u2014\u20145555\u2013\u2013
Insurance contract liabilities2 9222 716206\u20142 7142 462252\u2013
LRC (liability for remaining coverage)701512190\u2014676439238\u2013
Personal insurance20516190\u201425316238\u2013
Motor Third-Party Liability (MTPL)160160\u2014\u2014145145\u2013\u2013
Liabilities other than MTPL2525\u2014\u20142424\u2013\u2013
Casco9696\u2014\u20148181\u2013\u2013
Property other than casco216216\u2014\u2014173173\u2013\u2013
Accepted reinsurance000\u2014-1-10\u2013
LIC (liability for incurred claims)2 2202 20416\u20142 0382 02414\u2013
Personal insurance61059416\u201454453014\u2013
Motor Third-Party Liability (MTPL)863863\u2014\u2014771771\u2013\u2013
Liabilities other than MTPL357357\u2014\u2014358358\u2013\u2013
Casco5353\u2014\u20144242\u2013\u2013
Property other than casco 319319\u2014\u2014306306\u2013\u2013
Accepted reinsurance18180\u201417170\u2013
Assets for acquisition cost000\u2014000\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Insurance contract liabilities relate to insurance contracts and investment contracts with a discretionary participation feature
\n
(DPF). Liabilities under investment contracts without DPF are measured at fair value. They concern unit-linked contracts, which
\n
are recognised under financial liabilities (see Note 4.1).
\n\n
\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
\n
are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
\n
that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
\n
assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
\n
mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
\n
overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
\n
incurred as a consequence of performing insurance activities for in-force contracts.
\n
- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
\n
for the entire group.
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\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
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and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
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court awards, le
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g
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islation and discountin
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g
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.
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\u2022 For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
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services, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on the
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individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate level of
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service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided
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for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
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\u2022 Coverage units have a positive value and are floored to zero. In case of zero coverage units in a given period, no CSM is
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allocated to P&L as no services have been provided in the period. This is possible, for instance, where contracts provide for
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\u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but there is a mandatory waiting period for
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the client to be able to benefit from insurance coverage.
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\u2022 Defining IFRS 17 portfolios is a local decision, made by each insurance entity of KBC Group. It is country-specific, driven by the
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local product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown
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by product.
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\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance
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risk, from the unit-linked to the non-unit-linked component and vice versa.
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\u2022 Non-life LRC BBA (238 million euros in 2022, 190 million euros in 2023) represents the LRC health insurance (as part of personal
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insurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for
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personal insurance (530 million euros in 2022, 594 million euros in 2023) represents the incurred claims under personal insurance
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with regard to \u2018workmen\u2019s compensation\u2019 insurance, which are typically settled over a long period.
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\u2022 Most reinsurance programmes protect against the impact of exceptionally large loss events or accumulation of losses.
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Therefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the
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movements in reinsurance contract assets are limited.
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\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these
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bottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one
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with volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other liabilities for which
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bottom-up curves are used).
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Yield curve used to discount cashflows not varying based on underlying items; bottom-up method
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CurrencyIlliquidity premiumPortfolio duration
1 year5 years10 years20 years
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment2.92%2.29%2.74%2.13%
CZKwith volatility adjustment4.83%3.19%3.70%3.98%
without volatility adjustment4.67%3.03%3.54%3.82%
HUFwith volatility adjustment5.55%5.25%6.29%5.49%
without volatility adjustment5.44%5.14%6.18%5.38%
BGNwith volatility adjustment3.16%2.50%3.00%2.43%
without volatility adjustment3.16%2.50%3.00%2.43%
2022
EURwith volatility adjustment4.77%3.26%3.36%1.87%
without volatility adjustment4.56%3.05%3.15%1.69%
CZKwith volatility adjustment7.92%4.46%4.51%6.04%
without volatility adjustment7.61%4.16%4.21%5.70%
HUFwith volatility adjustment13.96%7.21%8.52%9.40%
without volatility adjustment13.77%7.04%8.34%9.22%
BGNwith volatility adjustment5.27%3.57%3.67%1.97%
without volatility adjustment5.27%3.57%3.67%1.97%
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Note 5.6.2: Movements in Life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n

\n\n\n

\n\n\n
\u2022 When transitioning from IFRS 4 to IFRS 17, KBC applied the Full Retrospective Approach (FRA) for recent years. Applying the FRA
\n
for non-recent years is impracticable due to either a lack of historical data (data and hypotheses) or high costs associated
\n
with making information from the past available for FRA transition calculations. Where the FRA is impracticable, the Fair Value
\n
Approach (FVA) was predominantly used to determine the CSM on the transition date. The Modified Retrospective Approach
\n
(MRA) is rarely applied as this transition approach is overly complex and the costs do not outweigh the benefits. KBC calculates
\n
a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently adjusts a few assumptions or parameters.
\n
The adjustments relate to the inclusion in the IFRS 13 fair value of total expenses, i.e. including non-directly attributable
\n
expenses, and to the inclusion of a risk premium that covers not only non-financial risk, but also system and integration
\n
expenses and capital funding costs. All past years are combined into a single cohort for the FVA transition calculations. The
\n
FVA CSM ensues from cost and risk margin differences under IFRS 17 and IFRS 13 measurement approaches. The OCI amount
\n
on the transition date under the FVA is determined in accordance with the transition exemptions provided in IFRS 17.
\n
\u2022 Movement in insurance liabilities in 2023:
\n
- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised as
\n
KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income and
\n
expense between P&L and OCI.
\n
- The movement in the investment component of 1 284 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 Movement in insurance liabilities 2022:
\n
- Due to the increase in market interest rates during 2022, a gain in OCI of 2 614 million euros before tax is recognised as KBC
\n
made the accounting policy choice for all portfolios within the group to disaggregate IFIE between P&L and OCI. The Life
\n
insurance service result was positively impacted by a net reversal of loss component for an amount of 67 million euros.
\n
- The movement in the investment component of 1 606 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 On transitioning to IFRS 17, KBC applied mainly the fair value approach. Therefore, the amortised acquisition costs are low as
\n
they are not estimated under the fair value approach (i.e. the prospective approach).
\n
\u2022 The Life insurance contracts are typically long-term contracts and are therefore measured according to the BBA or VFA. The
\n
latter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold
\n
contracts mandatorily contain insurance risk cover.
\n
\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, which are repayable under all
\n
circumstances and as such include an investment component. For defining the investment component, an investigation based
\n
on the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life
\n
insurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered
\n
an investment component. Any associated surrender fees resulting from surrender are considered insurance components.
\n

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Note 5.6.3: Movements in Non-life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\u2022 In Non-life, KBC applies mostly the PAA, as the coverage period is 1 year or less.
\n
\u2022 The cost of outstanding claims is based on the past claims development experience to project future claims development.
\n
These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling
\n
costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
\n
are mainly analysed per accident year. Large claims are separately addressed.
\n
\u2022 Estimates of salvage recoveries and subrogation reimbursement are considered in the measurement of the ultimate claim
\n
costs.
\n
\u2022 No asset for insurance acquisition cashflows is currently recognised.
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Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Present value Risk
of future adjustment Total insurance
cashflows (incl. (incl. LIC)contract
(in millions of EUR)LIC)Contractual service marginliabilities
Insurance
contracts that Insurance
existed at the contracts that
transition date, existed at the
modified transition date, Other
retrospective fair value insurance
approach approach contracts
2023
Opening balance11 378112451 37748013 393
Insurance service result-39047-18198-139
Changes that relate to future service-3995641202245
New business-16117\u2013\u20131506
Changes in estimates reflected in the CSM -23839412074-1
Changes in estimates that result in onerous contract 00\u2013\u2013\u20130
losses and reversals
Changes that relate to current service38-8-5-113-26-113
CSM recognised in P&L0\u2013-5-113-26-143
Changes in the risk adjustment (expected)0-8\u2013\u2013\u2013-8
Experience adjustments38\u2013\u2013\u2013\u201338
Changes to liabilities for incurred claims related to past -29-2\u2013\u2013\u2013-30
service
Insurance finance income and expense809-7197818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income41840016205679
Total cashflows-252\u2013\u2013\u2013\u2013-252
Premiums received1 371\u2013\u2013\u2013\u20131 371
Claims paid-1 404\u2013\u2013\u2013\u2013-1 404
Costs other than claims paid-92\u2013\u2013\u2013\u2013-92
Acquisition costs paid-126\u2013\u2013\u2013\u2013-126
Other changes-7-12-6-1-14
Closing balance11 538152471 38768313 807
2022
Opening balance15 4261105598121516 787
Insurance service result-8314-7382263-189
Changes that relate to future service-84213-2476288-67
New business-12614\u2013\u201313523
Changes in estimates reflected in the CSM-6260-24761520
Changes in estimates that result in onerous contract -900\u2013\u2013\u2013-90
losses and reversals
Changes that relate to current service33-8-5-94-24-98
CSM recognised in P&L\u2013\u2013-5-94-24-123
Changes in the risk adjustment (expected)\u2013-8\u2013\u2013\u2013-8
Experience adjustments33\u2013\u2013\u2013\u201333
Changes to liabilities for incurred claims related to past -23-2\u2013\u2013\u2013-25
service
Insurance finance income and expense-2 519-2161-2 513
In P&L83216192
In OCI-2 602-4\u2013\u2013\u2013-2 606
Total changes in comprehensive income-3 3501-7389264-2 702
Total cashflows-700\u2013\u2013\u2013\u2013-700
Premiums received1 231\u2013\u2013\u2013\u20131 231
Claims paid-1 742\u2013\u2013\u2013\u2013-1 742
Costs other than claims paid-84\u2013\u2013\u2013\u2013-84
Acquisition costs paid-105\u2013\u2013\u2013\u2013-105
Other changes21-3718
Closing balance11 378112451 37748013 393
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
\n
\u25e6 Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by the
\n
insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period.
\n
\u25e6 Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected to be
\n
provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current period.
\n
\u2022 Main movements in 2023: there were no material exceptional movements.
\n
\u2022 Main movements in 2022: the net movement in the loss component amounted to 67 million euros and was mainly explained by
\n
(i) new business in the year 2022 for which a loss component of -24 million euros was recognised and (ii) a reversal of loss
\n
component of 90 million euros due to increasing interest rates, resulting in a higher margin expected to be earned on future
\n
premiums. The increasing interest rates were also the main reason for the increase of 626 million euros in the CSM, as more
\n
margin was expected to be earned on future premiums.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value Risk
of future adjustment
cashflows (incl. (incl. LIC)Total insurance
(in millions of EUR)LIC)Contractual service margincontract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2023
Opening balance17759367252
Insurance service result1116-417-7
Changes that relate to future service919-38100
New business-181\u2013170
Changes in estimates reflected in the CSM2717-38-70
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service2-3-3-4-7
CSM recognised in P&L\u2013\u2013-3-4-6
Changes in the risk adjustment (expected)\u2013-3\u2013\u2013-3
Experience adjustments2\u2013\u2013\u20132
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-29-1901-48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income-17-4-417-54
Total cashflows8\u2013\u2013\u20138
Premiums received43\u2013\u2013\u201343
Claims paid-24\u2013\u2013\u2013-24
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-7\u2013\u2013\u2013-7
Other changes00000
Closing balance8715274206
2022
Opening balance1361179636386
Insurance service result-36-3-331-11
Changes that relate to future service-3612340
New business-181\u2013170
Changes in estimates reflected in the CSM-1902170
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service0-4-5-3-11
CSM recognised in P&L\u2013\u2013-5-3-8
Changes in the risk adjustment (expected)\u2013-4\u2013\u2013-4
Experience adjustments0\u2013\u2013\u20130
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-93-3900-132
In P&L-1000-2
In OCI-92-39\u2013\u2013-131
Total changes in comprehensive income-129-42-330-144
Total cashflows9\u2013\u2013\u20139
Premiums received39\u2013\u2013\u201339
Claims paid-20\u2013\u2013\u2013-20
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-6\u2013\u2013\u2013-6
Other changes00000
Closing balance17759367252
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\u2022 In Non-life, the BBA is applied to \u2018individual health insurance\u2019.
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\u2022 The decline recognised in insurance finance income and expense through OCI of 48 million euros in 2023 is accounted for by
\n
the increase in the discount curve in the long term (more than 20 years). The decline of 131 million euros in 2022 is attributable
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to the sharp increase in the discount curve during the first half of the year. A typical feature of the hospitalisation portfolio is
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that interest rate movements have a greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums
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are levelled (constant \u2018cash in\u2019 during the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019
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more towards the end of the contract).
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Note 5.6.6: New business (BBA/VFA)
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(Re)insurance (Re)insurance
(in millions of EUR)contracts issuedcontracts acquiredTotal
Not onerousOnerousNot onerousOnerous
2023
Estimates of present value of cash outflows1 194212001 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows-1 378-20700-1 585
Risk adjustment for non-financial risk1620018
Contractual service margin166-00166
Increase in insurance contract liabilities: loss component\u20137\u201307
2022
Estimates of present value of cash outflows781440001 221
Expected claims657375001 032
Expected other insurance service expenses41430084
Insurance acquisition cashflows832200105
Estimates of present value of cash inflows-946-41900-1 365
Risk adjustment for non-financial risk1230015
Contractual service margin152\u20130\u2013152
Increase in insurance contract liabilities: loss component\u201324\u2013024
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\u2022 In 2022, the low interest-rate environment at the beginning of the year mainly explained the sale of onerous business. Increasing
\n
interest rates improved the overall profitability of new business (insurance and the financial margin) during the year.
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Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (BBA/VFA)
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CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR)1st year2nd year3rd year4th year5th year6-10th year+10th year
2023
Life149142135129122529973
Non-life666652451
2022
Life123118113109105471928
Non-life887773062
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\u2022 The table shows the future CSM recognition for the next 25 years.
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Note 5.6.8: Fair value of assets backing insurance and investment contracts
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
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Note 5.6.9: Changes in accumulated OCI for FVOCI assets related to insurance contracts for which the fair value transition
\n
approach is used
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(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while maintaining
\n
the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between covering
\n
financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently the years
\n
thereafter until the portfolio subject to the transition approach reaches maturity.
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However, following the first-time adoption of
\n
IFRS 17 a large part of the bond portfolio of KBC Insurance was transferred to FVOCI (see Note 1.6 for more information), resulting
\n
in a very limited imbalance in 2022 and 2023.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
\n\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
\n\n\n\n\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n

\n\n\n

\n\n

\n
Note 5.7: Provisions for risks and charges
\n\n
Note 5.7.1: Overview
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total provisions for risks and charges183418
Provisions for off-balance-sheet commitments and financial guarantees91114
Provisions for other risks and charges92305
Provisions for restructuring3792
Provisions for taxes and pending legal disputes37192
Other1820
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Note 5.7.2: Details of off-balance-sheet commitments and financial guarantees
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Subject to
Subject to 12-Subject to lifetime ECL \u2013
(in millions of EUR)month ECLlifetime ECLnon-performingTotal
31-12-2023
Provisions on 1 January193560114
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-2 3 1 2
Stage 2 (lifetime ECL) 1-13 9-3
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 1-2-2
New financial assets 10 4 2 16
Changes in risk parameters during the reporting period-3-6-12-21
Changes in the model or methodology 0 0 0 0
Derecognised financial assets-3-3-3-9
Other 0 0 2 2
Movements without an impact on results
Derecognised financial assets 0 0 0 0
Changes in the scope of consolidation 0-1 0-1
Other 0 1-7-7
Provisions on 31 December 22 20 49 91
31-12-2022
Provisions on 1 January192191130
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-610610
Stage 2 (lifetime ECL)0-572
Stage 3 \u2018non-performing\u2019 (lifetime ECL)06-24
New financial assets84012
Changes in risk parameters during the reporting period-11-45-45
Changes in the model or methodology0000
Derecognised financial assets-1-1-1-3
Other0-50-5
Movements without an impact on results
Derecognised financial assets0000
Changes in the scope of consolidation1236
Other0112
Provisions on 31 December193560114
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Also see Note 6.1.
\n

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\u2022 Information relating to the main legal disputes pending: claims filed against KBC group companies are \u2013 in keeping with IFRS
\n
rules \u2013 treated on the basis of an assessment of whether they will lead to an outflow of resources (i.e. \u2018probable outflow\u2019,
\n
\u2018possible outflow\u2019 or \u2018remotely probable outflow\u2019). Provisions are set aside for \u2018probable outflow\u2019 cases (see \u2018Notes on the
\n
accounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial
\n
statements if such cases might have a material impact on the balance sheet (i.e. when the claim could lead to a possible
\n
outflow of more than 50 million euros). All other claims (\u2018remotely probable outflow\u2019), of whatever magnitude, that represent a
\n
minor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is
\n
limited in order not to prejudice the position of the group in ongoing litigation.
\n\n

\n\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
\n

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by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
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Note 5.9: Retirement benefit obligations
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(in millions of EUR)31-12-202331-12-2022
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period2 5803 335
Current service cost95 129
Interest cost104 26
Actuarial gain or loss resulting from changes in demographic assumptions-3-10
Actuarial gain or loss resulting from changes in financial assumptions152-814
Experience adjustments-56 58
Past-service cost00
Benefits paid-149 -129
Other0-14
Defined benefit obligations at the end of the period2 7242 580
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period2 7463 244
Actual return on plan assets222-499
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 115 25
Employer contributions93 94
Plan participant contributions20 19
Benefits paid-149-129
Other516
Fair value of plan assets at the end of the period2 9362 746
of which financial instruments issued by the group00
of which property occupied by KBC22
Funded status
Plan assets in excess of defined benefit obligations212 166
Reimbursement rights00
Asset ceiling limit-70-12
Unfunded accrued/prepaid pension cost142 153
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period153-128
Amounts recognised in the income statement-65-112
Amounts recognised in other comprehensive income-43 299
Employer contributions93 94
Other4-1
Unfunded accrued/prepaid pension cost at the end of the period142 153
Amounts recognised in the income statement-65-112
Current service cost-95-129
Interest cost10-1
Plan participant contributions20 19
Other000
Changes to the amounts recognised in other comprehensive income-43 299
Actuarial gain or loss resulting from changes in demographic assumptions3
Actuarial gain or loss resulting from changes in financial assumptions-152 814
Actuarial result on plan assets107-524
Experience adjustments56-58
Adjustments to asset ceiling limits125
Other-58 31
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans-18-21
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\u2022 Retirement benefits that are actively accrued for the Belgium-based staff of KBC Bank, KBC Insurance and most of their
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Belgian subsidiaries are accrued exclusively through the KBC pension fund. Up until year-end 2018, employer-funded
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retirement benefits had accrued primarily through a defined benefit plan, where the benefit is calculated based on the final
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salary of employees before they retire, the number of years they had been in the plan and a formula that applies a progressive
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rate scale. A defined contribution plan was introduced on 1 January 2014 for all new employees and any employees who had
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chosen to switch to it. In this plan, a contribution is deposited based on the current monthly salary and the amounts deposited
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are paid out together with the (guaranteed) return on retirement. Both types of pension plan are managed by the KBC pension
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fund, which uses the services of KBC Asset Management for the investment strategy. In addition, there are a number of smaller,
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closed group insurance schemes from the past that will continue to be funded and are managed by the KBC pension fund.
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On 1 January 2019, a new defined contribution plan was introduced to replace the one introduced in 2014. All employees were
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again given the one-time option of switching from the defined benefit plan to the new defined contribution plan. At year-end
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2023, 52% of employees were active participants in the defined benefit plan and 48% in the defined contribution plan (the
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corresponding figures at year-end 2022 were 55% and 45%).
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\u2022 The expected age of retirement of each employee and the expected wage inflation based on an inflation curve derived from
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the market value of inflation-linked bonds are taken into account in the calculation of the gross defined benefit obligations.
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Additional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund
Composition (31-12-2023)
Equity instruments31%
Bonds55%
Real estate13%
Cash1%
of which illiquid assets17%
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Composition (31-12-2022)
Equity instruments37%
Bonds46%
Real estate14%
Cash3%
of which illiquid assets18%
Contributions expected in 2024 (in millions of EUR)42
Regulatory frameworkPension plans are registered in collective labour agreements and incorporated into a set of regulations.
Annual reporting of funding levels to supervisory authorities (FSMA/NBB). Any underfunding must be
reported immediately to the supervisory authorities.
Risks for KBCInvestment risk and inflation risk.
ALM policyThe hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps.
The return portfolio aims to generate an extra return.
Plan amendmentsA new version of the employer-funded defined contribution plan was introduced on 1 January 2019. All
employees who had been signed up to the defined benefit plan were given the one-time option of
switching to this new plan.
Curtailments and settlementsNot applicable.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.20%
\u2022 Expected rate of salary increase2.75%
\u2022 Expected inflation rate2.42%
\u2022 Expected rate of increase in pensions\u2013
\u2022 Weighted average duration of the obligations10 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate11.83%
\u2022 an increase of 1% in the expected inflation rate9.17%
\u2022 an increase that is 1% higher than the expected real 12.18%
increase in salary
\u2022 an increase of one year in life expectancy\u2013
The impact of the following assumptions has not been Decreasing mortality rates. Pension benefits are paid out
calculated:in capital, so longevity risk is immaterial.
Staff turnover rates: the impact of the changes remains limited.
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Additional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund
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Contributions expected in 2024 (in millions of EUR)45
Regulatory frameworkPursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of
1.75% on employee and employer contributions.
Risks for KBCInvestment risk.
ValuationRetirement benefit obligations are measured on the basis of the accrued benefits on the reporting date,
making a projection of these benefits (at the rate of interest guaranteed by law) until the expected age
of retirement, and discounting the resulting benefits.
KBC offers two types of defined contribution plan: one that is financed through employee contributions
and one through employer contributions. The valuation of retirement benefit obligations for the
employer-funded defined contribution plan takes account of future contributions. However, it is not
taken into account for the valuation of the employee-funded defined contribution plan, because the
employer\u2019s obligation for that plan only relates to the guaranteed minimum interest rate.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.31%
\u2022 Weighted average duration of the obligations16 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate19.0%
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Note 6.1: Off-balance-sheet commitments and financial guarantees given and received
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Nominal amountProvisionNet exposureNominal ProvisionNet exposure
amount
Undrawn portion of credit lines granted
Stage 141 551 2041 53139 1341739 117
Stage 26 683 146 6708 077268 051
Stage 3 79 5 73511338
Total48 313 3948 27447 2625647 206
of which irrevocable credit lines27 856 2327 83326 6182726 591
Financial guarantees given
Stage 17 860 27 8597 60027 598
Stage 22 952 62 9473 13983 131
Stage 3 133 44 901194476
Total10 946 5110 89510 8585410 805
Other commitments given
Total1 421 11 4201 44041 436
Off-balance-sheet commitments and financial guarantees
Total60 680 9160 58959 56111459 447
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
\n
euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
\n
billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
\n
estate of the covered bond programme (16.6 billion euros at year-end 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner;
\n
see table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such
\n
as default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will
\n
organise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is
\n
primarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided
\n
in Note 4.3.
\n
\u2022 Collateral acquired through foreclosure came to 3 million euros in 2023 (4 million euros in 2022).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral received (which may be sold or repledgedFair value of collateral sold or
in the absence of default by the owner) (in millions of EUR)Fair value of collateral receivedrepledged
31-12-202331-12-202231-12-202331-12-2022
Financial assets42 21530 1265 2677 792
Equity instruments211622
Debt securities41 95929 8765 2657 790
Loans and advances23523400
Cash0000
Other0000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In the years 2016-2022, KBC contributed to the Single Resolution Fund (SRF) by means of irrevocable payment commitments
\n
(IPCs) in the amount of 90 million euros, which are fully covered by cash collateral. In line with industry practice, the following
\n
accounting treatment is applied to IPCs: (\u00b0) the amount of cash collateral is recognised as a financial asset and
\n
(\u00b0) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral
\n
as a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that
\n
interest is received on the amount outstanding. In a recent decision, the General Court of the EU ruled that in a scenario in
\n
which a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal
\n
in this case at the European Court of Justice before considering the potential implications on the accounting treatment of
\n
IPCs. The 90 million euros is deducted in the calculation of the common equity capital.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag732": { "value": "\n

\n
Note 3.4: Net fee and commission income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total2 3492 218
Fee and commission income2 9912 800
Fee and commission expense-642-581
Breakdown by type
Asset management services1 2471 199
Fee and commission income1 3051 259
Fee and commission expense-59-60
Banking services1 057 983
Fee and commission income1 6321 495
Fee and commission expense-575-512
Other45 36
Fee and commission income53 46
Fee and commission expense-8-10
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 \u2018Asset management services\u2019 contains management fees, entry fees and distribution fees for investment funds and unit-linked
\n
life insurance under IFRS 9. \u2018Banking services\u2019 contains credit- and guarantee-related fees, payment transaction fees, network
\n
income, securities-related fees, distribution fees paid for banking products and fees for other banking services. Distribution
\n
fees paid for insurance products (Life and Non-life under IFRS 17) are recognised in the income statement under \u2018Insurance
\n
service expenses before reinsurance\u2019 (see Note 3.6). \u2018Other\u2019 comprises distribution fees of third-party insurers (not under IFRS
\n
17) and platformication income.
\n\n

\n\n
\u2022 The lion\u2019s share of the fees and commissions related to lending is recognised under \u2018Net interest income\u2019 (effective interest rate
\n
calculations).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 The sale of the Belgian State Note through KBC in 2023 resulted in one-off net fee and commission income of 11 million euros.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag733": { "value": "\n

\n\n

\n\n
Note 3.5: Other net income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total65616
of which gains or losses on
Sale of financial assets measured at amortised cost-22-32
Sale of FVOCI debt instruments-7-69
Repurchase of financial liabilities measured at amortised cost00
Other, including:685117
Income from operational leasing activities10194
Income from VAB Group3950
Gain on sale of real estate subsidiary (KBC Vastgoed Nederland)-68
Arbitration proceedings against ICEC-Holding--149
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios
405		\u2013
Gain on sale of a participation in Belgium18\u2013
Recovery of Belgian bank and insur ance tax from 2016 (incl. moratorium interest)48\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Arbitration proceedings against ICEC-Holding (significant adjusting post-balance-sheet event affecting the 2022 financial
\n
statements): on 17 February 2023, \u010cSOB in the Czech Republic received an arbitral award in the arbitration proceedings against
\n
ICEC-Holding. \u010cSOB was being sued in the arbitration proceedings as the legal successor of Investi\u010dn\u00ed a po\u0161tovn\u00ed banka (IPB),
\n
whose business activities were acquired by \u010cSOB in 2000. The proceedings were initiated by ICEC-Holding in 2007. The
\n
plaintiff, ICEC-Holding, a.s., claims that IPB breached its contractual duties in 1999, entitling ICEC-Holding to damages and a
\n
contractual penalty. The claim itself is not in any way related to \u010cSOB\u2019s business activities and is to be considered part of the
\n
IPB legacy. In the delivered arbitral award, the Court of Arbitration ordered \u010cSOB to pay ICEC-Holding an amount of CZK 3.7
\n
billion, along with the costs of the proceedings in the amount of CZK 5.0 million, payable within fifteen days of the delivery of
\n
the award. The plaintiff failed in the remainder of its claim and the arbitration panel ordered it to pay \u010cSOB the costs of the
\n
proceedings in the amount of CZK 17.4 million. \u010cSOB will consider possible further legal steps leading to the revision of this
\n
award. The payment of damages and contractual penalties had an adverse financial impact on \u010cSOB and KBC Group. In
\n
accordance with IFRS, \u010cSOB was required to provision the full amount of CZK 3.7 billion in its 2022 income statement, impacting
\n
KBC Group\u2019s 2022 income statement to the extent of -149 million euros before tax (-121 million euros after tax).
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios, see Note 6.6.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag734": { "value": "\n

\n\n
Note 3.5: Other net income
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total65616
of which gains or losses on
Sale of financial assets measured at amortised cost-22-32
Sale of FVOCI debt instruments-7-69
Repurchase of financial liabilities measured at amortised cost00
Other, including:685117
Income from operational leasing activities10194
Income from VAB Group3950
Gain on sale of real estate subsidiary (KBC Vastgoed Nederland)-68
Arbitration proceedings against ICEC-Holding--149
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios
405		\u2013
Gain on sale of a participation in Belgium18\u2013
Recovery of Belgian bank and insur ance tax from 2016 (incl. moratorium interest)48\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Arbitration proceedings against ICEC-Holding (significant adjusting post-balance-sheet event affecting the 2022 financial
\n
statements): on 17 February 2023, \u010cSOB in the Czech Republic received an arbitral award in the arbitration proceedings against
\n
ICEC-Holding. \u010cSOB was being sued in the arbitration proceedings as the legal successor of Investi\u010dn\u00ed a po\u0161tovn\u00ed banka (IPB),
\n
whose business activities were acquired by \u010cSOB in 2000. The proceedings were initiated by ICEC-Holding in 2007. The
\n
plaintiff, ICEC-Holding, a.s., claims that IPB breached its contractual duties in 1999, entitling ICEC-Holding to damages and a
\n
contractual penalty. The claim itself is not in any way related to \u010cSOB\u2019s business activities and is to be considered part of the
\n
IPB legacy. In the delivered arbitral award, the Court of Arbitration ordered \u010cSOB to pay ICEC-Holding an amount of CZK 3.7
\n
billion, along with the costs of the proceedings in the amount of CZK 5.0 million, payable within fifteen days of the delivery of
\n
the award. The plaintiff failed in the remainder of its claim and the arbitration panel ordered it to pay \u010cSOB the costs of the
\n
proceedings in the amount of CZK 17.4 million. \u010cSOB will consider possible further legal steps leading to the revision of this
\n
award. The payment of damages and contractual penalties had an adverse financial impact on \u010cSOB and KBC Group. In
\n
accordance with IFRS, \u010cSOB was required to provision the full amount of CZK 3.7 billion in its 2022 income statement, impacting
\n
KBC Group\u2019s 2022 income statement to the extent of -149 million euros before tax (-121 million euros after tax).
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios, see Note 6.6.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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Note 3.5: Other net income
\n
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(in millions of EUR)20232022
Total65616
of which gains or losses on
Sale of financial assets measured at amortised cost-22-32
Sale of FVOCI debt instruments-7-69
Repurchase of financial liabilities measured at amortised cost00
Other, including:685117
Income from operational leasing activities10194
Income from VAB Group3950
Gain on sale of real estate subsidiary (KBC Vastgoed Nederland)-68
Arbitration proceedings against ICEC-Holding--149
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios
405		\u2013
Gain on sale of a participation in Belgium18\u2013
Recovery of Belgian bank and insur ance tax from 2016 (incl. moratorium interest)48\u2013
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\u2022 Arbitration proceedings against ICEC-Holding (significant adjusting post-balance-sheet event affecting the 2022 financial
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statements): on 17 February 2023, \u010cSOB in the Czech Republic received an arbitral award in the arbitration proceedings against
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ICEC-Holding. \u010cSOB was being sued in the arbitration proceedings as the legal successor of Investi\u010dn\u00ed a po\u0161tovn\u00ed banka (IPB),
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whose business activities were acquired by \u010cSOB in 2000. The proceedings were initiated by ICEC-Holding in 2007. The
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plaintiff, ICEC-Holding, a.s., claims that IPB breached its contractual duties in 1999, entitling ICEC-Holding to damages and a
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contractual penalty. The claim itself is not in any way related to \u010cSOB\u2019s business activities and is to be considered part of the
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IPB legacy. In the delivered arbitral award, the Court of Arbitration ordered \u010cSOB to pay ICEC-Holding an amount of CZK 3.7
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billion, along with the costs of the proceedings in the amount of CZK 5.0 million, payable within fifteen days of the delivery of
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the award. The plaintiff failed in the remainder of its claim and the arbitration panel ordered it to pay \u010cSOB the costs of the
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proceedings in the amount of CZK 17.4 million. \u010cSOB will consider possible further legal steps leading to the revision of this
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award. The payment of damages and contractual penalties had an adverse financial impact on \u010cSOB and KBC Group. In
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accordance with IFRS, \u010cSOB was required to provision the full amount of CZK 3.7 billion in its 2022 income statement, impacting
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KBC Group\u2019s 2022 income statement to the extent of -149 million euros before tax (-121 million euros after tax).
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\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios, see Note 6.6.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
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the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
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associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.3: Maximum credit exposure and offsetting
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
\n
\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
\n
and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
\n
euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
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Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
\n
amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
\n
\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
\n
financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
\n
financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
\n
were traded on (central) clearing houses.
\n\n
\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
\n
received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
\n
the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt.
\n

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Note 4.4: Fair value of financial assets and liabilities \u2013 general
\n
\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
\n
different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
\n
banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
\n\n
which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
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\n
* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
\n
\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
\n
\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
\n
Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
\n
(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
\n
liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
\n
Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
\n
generated by valuation models are challenged by a team set up specifically for this purpose.
\n
\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
\n
discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
\n
by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
\n
\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
\n
euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
\n
reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
\n
(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
\n
\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
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Europe, measured under IFRS 17.
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\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
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- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
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- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
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fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
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Note 3.3).
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\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
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the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
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\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
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income from equity (i.e. mainly interest income from bonds) and income tax.
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\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
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component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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Note 3.6.4: Life insurance sales
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(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
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\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
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under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
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commission income\u2019.
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\u2022 Hybrid products: see Note 5.6.1.
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Note 3.6.5: Non-life insurance profitability by product (P&L)
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Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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Note 3.6.1: Insurance profitability \u2013 P&L
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\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
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of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
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insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
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for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
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\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
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\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
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related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
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insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
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statement and related notes.
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
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\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
\n
- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
\n
fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
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\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Investment result (OCI) on financial assets at FVOCI 595 1 49 0 644
Change in Insurance finance income and expense \u2013 OCI, before -538-1-23\u2014-561
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -537 0-23\u2014-560
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under -1-1\u2014\u2014-1
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI 56 0 25 0 81
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7\u2014 7
Deferred taxes\u2014\u2014\u201413 13
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 3313101
2022
Investment result (OCI) on financial assets at FVOCI-2 716-2-236-26-2 979
Change in insurance finance income and expense \u2013 OCI, before 2 6151424\u20133 039
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, 2 6130424\u20133 037
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 11\u2013\u20131
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI-1020188-2660
Change in reinsurance finance income and expense \u2013 OCI0\u2013-25\u2013-25
Deferred taxes\u2013\u2013\u2013-106-106
Net insurance and investment result after reinsurance, after tax \u2013 OCI-1020164-132-71
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the \u2018Effect
\n
of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019. This is the result of a
\n
decision by KBC to categorise a large part of the bond portfolio backing Life insurance contracts and part of the bond portfolio
\n
backing Non-life insurance contracts as FVOCI assets, resulting in a natural hedge between investment results on financial
\n
assets at FVOCI and IFIE through OCI.
\n
\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
\n
\u2022 In addition to the investment result of the financial assets recognised in profit or loss (Note 3.6.1) and in OCI (Note 3.6.2), results
\n
realised on FVOCI equity instruments are recognised directly in equity (see \u2018Transfer from revaluation reserves to retained
\n
earnings upon realisation\u2019 in \u2018Consolidated statement of changes in equity\u2019). The corresponding figures for 2023 and 2022 were
\n
24 million euros and 133 million euros, respectively, at insurance level of the 21 million euros and 152 million euros at group level.
\n

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\n\n
Note 3.6.5: Non-life insurance profitability by product (P&L)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR)revenuesexpensesin P&Lreinsuranceheldreinsurance
2023
Personal insurance 274-211-4 59\u2014\u2014
Motor Third-Party Liability (MTPL) 562-542-13 7\u2014\u2014
Liabilities other than MTPL 144-88-4 53\u2014\u2014
Casco 409-371-2 35\u2014\u2014
Property incl. other than casco 883-658-8 217\u2014\u2014
Total primary business2 272-1 870-31 371-33 338
Accepted reinsurance 18-2 017-54 -38
Total2 290-1 872-30 388-87 301
2022
Personal insurance238-152187\u2013\u2013
Motor Third-Party Liability (MTPL)526-444-379\u2013\u2013
Liabilities other than MTPL129-117-111\u2013\u2013
Casco358-313044\u2013\u2013
Property incl. other than casco791-698-193\u2013\u2013
Total primary business2 041-1 725-4313-39274
Accepted reinsurance18-10-072027
Total2 059-1 735-4320-19301
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\n
Note 5.6.1: Breakdown of (re)insurance contract assets and liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 00\u2014\u201400\u2013\u2013
Insurance contract liabilities 13 8625512 87892813 4445212 600792
LRC (liability for remaining coverage)13 674212 76291013 268212 491775
Unit-linked7980\u20147986750\u2013675
Non-unit-linked12 651212 650\u201412 383212 3810
Hybrid22501121122100110100
Accepted reinsurance00000000
LIC (liability for incurred claims)18853116181765010917
Unit-linked130\u201413120\u201312
Non-unit-linked1535399\u20141425092\u2013
Hybrid210174220175
Accepted reinsurance00000000
Assets for acquisition cost00000000
Non-life
Reinsurance assets6464\u2014\u20145555\u2013\u2013
Insurance contract liabilities2 9222 716206\u20142 7142 462252\u2013
LRC (liability for remaining coverage)701512190\u2014676439238\u2013
Personal insurance20516190\u201425316238\u2013
Motor Third-Party Liability (MTPL)160160\u2014\u2014145145\u2013\u2013
Liabilities other than MTPL2525\u2014\u20142424\u2013\u2013
Casco9696\u2014\u20148181\u2013\u2013
Property other than casco216216\u2014\u2014173173\u2013\u2013
Accepted reinsurance000\u2014-1-10\u2013
LIC (liability for incurred claims)2 2202 20416\u20142 0382 02414\u2013
Personal insurance61059416\u201454453014\u2013
Motor Third-Party Liability (MTPL)863863\u2014\u2014771771\u2013\u2013
Liabilities other than MTPL357357\u2014\u2014358358\u2013\u2013
Casco5353\u2014\u20144242\u2013\u2013
Property other than casco 319319\u2014\u2014306306\u2013\u2013
Accepted reinsurance18180\u201417170\u2013
Assets for acquisition cost000\u2014000\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Insurance contract liabilities relate to insurance contracts and investment contracts with a discretionary participation feature
\n
(DPF). Liabilities under investment contracts without DPF are measured at fair value. They concern unit-linked contracts, which
\n
are recognised under financial liabilities (see Note 4.1).
\n\n
\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
\n
are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
\n
that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
\n
assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
\n
mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
\n
overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
\n
incurred as a consequence of performing insurance activities for in-force contracts.
\n
- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
\n
for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
\n
and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
\n
court awards, le
\n
g
\n
islation and discountin
\n
g
\n
.
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\u2022 For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on the
\n
individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate level of
\n
service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided
\n
for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
\u2022 Coverage units have a positive value and are floored to zero. In case of zero coverage units in a given period, no CSM is
\n
allocated to P&L as no services have been provided in the period. This is possible, for instance, where contracts provide for
\n
\u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but there is a mandatory waiting period for
\n
the client to be able to benefit from insurance coverage.
\n
\u2022 Defining IFRS 17 portfolios is a local decision, made by each insurance entity of KBC Group. It is country-specific, driven by the
\n
local product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown
\n
by product.
\n
\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance
\n
risk, from the unit-linked to the non-unit-linked component and vice versa.
\n
\u2022 Non-life LRC BBA (238 million euros in 2022, 190 million euros in 2023) represents the LRC health insurance (as part of personal
\n
insurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for
\n
personal insurance (530 million euros in 2022, 594 million euros in 2023) represents the incurred claims under personal insurance
\n
with regard to \u2018workmen\u2019s compensation\u2019 insurance, which are typically settled over a long period.
\n
\u2022 Most reinsurance programmes protect against the impact of exceptionally large loss events or accumulation of losses.
\n
Therefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the
\n
movements in reinsurance contract assets are limited.
\n
\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these
\n
bottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one
\n
with volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other liabilities for which
\n
bottom-up curves are used).
\n
Yield curve used to discount cashflows not varying based on underlying items; bottom-up method
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CurrencyIlliquidity premiumPortfolio duration
1 year5 years10 years20 years
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment2.92%2.29%2.74%2.13%
CZKwith volatility adjustment4.83%3.19%3.70%3.98%
without volatility adjustment4.67%3.03%3.54%3.82%
HUFwith volatility adjustment5.55%5.25%6.29%5.49%
without volatility adjustment5.44%5.14%6.18%5.38%
BGNwith volatility adjustment3.16%2.50%3.00%2.43%
without volatility adjustment3.16%2.50%3.00%2.43%
2022
EURwith volatility adjustment4.77%3.26%3.36%1.87%
without volatility adjustment4.56%3.05%3.15%1.69%
CZKwith volatility adjustment7.92%4.46%4.51%6.04%
without volatility adjustment7.61%4.16%4.21%5.70%
HUFwith volatility adjustment13.96%7.21%8.52%9.40%
without volatility adjustment13.77%7.04%8.34%9.22%
BGNwith volatility adjustment5.27%3.57%3.67%1.97%
without volatility adjustment5.27%3.57%3.67%1.97%
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Note 5.6.6: New business (BBA/VFA)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(Re)insurance (Re)insurance
(in millions of EUR)contracts issuedcontracts acquiredTotal
Not onerousOnerousNot onerousOnerous
2023
Estimates of present value of cash outflows1 194212001 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows-1 378-20700-1 585
Risk adjustment for non-financial risk1620018
Contractual service margin166-00166
Increase in insurance contract liabilities: loss component\u20137\u201307
2022
Estimates of present value of cash outflows781440001 221
Expected claims657375001 032
Expected other insurance service expenses41430084
Insurance acquisition cashflows832200105
Estimates of present value of cash inflows-946-41900-1 365
Risk adjustment for non-financial risk1230015
Contractual service margin152\u20130\u2013152
Increase in insurance contract liabilities: loss component\u201324\u2013024
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\n
\n
\u2022 In 2022, the low interest-rate environment at the beginning of the year mainly explained the sale of onerous business. Increasing
\n
interest rates improved the overall profitability of new business (insurance and the financial margin) during the year.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag737": { "value": "\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities
\n
of the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that
\n
insurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches
\n
for sales of insurance, etc.) in order to give a more accurate view of the profitability of the insurance business.
\n
\u2022 Of the items in Note 3.6.1, only \u2018Insurance revenues\u2019, \u2018Insurance service expenses\u2019, \u2018Insurance finance income and expense\u2019 and
\n
\u2018Net result from reinsurance contracts held\u2019 are presented on separate lines in the income statement (with a minor adjustment
\n
related to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-
\n
insurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income
\n
statement and related notes.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Technical insurance result 149 12 418\u2014 567
Insurance revenues before reinsurance 400 252 290\u20142 690
Insurance service expenses-251-12-1 872\u2014-2 123
Of which Non-life claim-related expenses\u2014\u2014-1 159\u2014-1 159
Investment result and insurance finance income and expense 151 0 6319 233
Investment result 434 96 93 19546
Net interest income 304 0 87 1 392
Dividend income 22 0 4 14 40
Net result from financial instruments at fair value through profit or loss 100 96 0 6 106
Other net income 10 0 2-3 10
Impairment-1 0 0 0-2
Insurance finance income and expense, before reinsurance-283-96-30\u2014-313
Interest accretion-186\u2014-31\u2014-217
Effect of changes in financial assumptions and foreign exchange
differences-1 0 1\u2014-1
Changes in fair value of underlying liabilities of contracts
measured under VFA-96-96\u2014\u2014-96
Net insurance and investment result before reinsurance 300 12 481 19 800
Net result from reinsurance contracts held -3\u2014-87\u2014-90
Premiums paid to the reinsurer-30\u2014-95\u2014-125
Fee and commission income 7\u2014 10\u2014 17
Amounts recoverable from the reinsurer 21\u2014 0\u2014 21
Total reinsurance finance income and expense 0\u2014-2\u2014-2
Net insurance and investment result after reinsurance 297 12 394 19 710
Non-directly attributable income or expenses 10-1-50 9-31
Net fee and commission income 67 0-2 24 90
Other net income-1\u2014\u2014 69 68
Operating expenses (incl. bank and insurance tax)-48-1-48-83-179
Impairment \u2013 other-9 0-1 0-10
Share in results of associated companies and joint ventures\u2014\u2014\u2014 0 0
Income tax expense\u2014\u2014\u2014-152-152
Result after tax 307 11 344-124 527
attributable to minority interests\u2014\u2014\u2014\u2014 0
attributable to equity holders of the parent\u2014\u2014\u2014\u2014 527
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Life: of which
Life direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2022
Technical insurance result1989324\u2013522
Insurance revenues before reinsurance373232 059\u20132 431
Insurance service expenses-174-14-1 735\u2013-1 909
Of which Non-life claim-related expenses\u2013\u2013-1 079\u2013-1 079
Investment result and insurance finance income and expense17909543317
Investment result272-659943413
Net interest income305011027442
Dividend income20041539
Net result from financial instruments at fair value through profit or loss-65-655-2-63
Other net income12 10-20-8
Impairment00022
Insurance finance income and expense, before reinsurance-92 66-4\u2013-96
Interest accretion-157\u2013-4\u2013-161
Effect of changes in financial assumptions and foreign exchange -1 0 0\u2013-1
differences
Changes in fair value of underlying liabilities of contracts measured 66 66\u2013\u2013 66
under VFA
Net insurance and investment result before reinsurance377 10 419 43 839
Net result from reinsurance contracts held -1\u2013-19\u2013-20
Premiums paid to the reinsurer-28\u2013-81\u2013-109
Fee and commission income12\u20139\u201321
Amounts recoverable from the reinsurer15\u201354\u201369
Total reinsurance finance income and expense 0\u2013-1\u2013-1
Net insurance and investment result after reinsurance 37610 40043 819
Non-directly attributable income or expenses20-1-3712-5
Net fee and commission income62 0-21980
Other net income0\u2014\u20146464
Operating expenses (incl. bank and insurance tax)-42-1-35-71-148
Impairment \u2013 other00000
Share in results of associated companies and joint ventures\u2014\u2014\u201400
Income tax expense\u2014\u2014\u2014-179-179
Result after tax 3969 363-125635
attributable to minority interests\u2014\u2014\u2014\u20140
attributable to equity holders of the parent\u2014\u2014\u2014\u2014635
\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 The column \u2018of which Life direct participating (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern
\n
Europe, measured under IFRS 17.
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\u2022 \u2018Insurance finance income and expense, before reinsurance\u2019 includes:
\n
- Interest accretion on the IFRS 17 insurance liabilities, which is offset by the investment result on the corresponding assets
\n
backing these liabilities.
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- Changes in the fair value of underlying liabilities of contracts measured under the VFA, which represents the change in the
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fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact in the change
\n
in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through P&L\u2019 (see also
\n
Note 3.3).
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\u2022 Non-technical: includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included in
\n
the note for the \u2018insurance business\u2019 given that they are KBC Insurance subsidiaries (but as they cannot be recognised under
\n
\u2018Life\u2019 or \u2018Non-life\u2019, they are included under \u2018Non-technical account\u2019). The \u2018Non-technical account\u2019 also includes the investment
\n
income from equity (i.e. mainly interest income from bonds) and income tax.
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\u2022 In 2022, the Non-life insurance service result was negatively impacted by storms, mainly in Belgium, having an impact of -89
\n
million euros before reinsurance or -35 million euros after reinsurance. The corresponding figures for 2023 were -29 million euros
\n
and -34 million euros, respectively. In 2022, the Life insurance service result was positively impacted by a reversal of a loss
\n
component for an amount of 67 million euros on balance (before tax) mainly on modern savings products in Belgium, driven by
\n
increased interest rates.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag752": { "value": "\n
Note 3.6.3: Insurance revenues (Life and Non-life) by component
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 406 370 3637934335
Amounts related to changes in liabilities for remaining coverage 390 355 3537233735
Expected claims and other insurance service expenses 226 200 2522820423
Change in risk adjustment for risk expired (non-financial risk) 15 11 314104
CSM recognisedfor services provided 150 143 61311238
Recovery of insurance acquisition cashflows 16 15 1660
Insurance revenues for contracts measured using the PAA2 284 302 2552 052292 023
Total insurance revenues2 690 4002 2902 4313732 059
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAnalysisOfInsuranceRevenueExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag788": { "value": "\n
Note 3.6.4: Life insurance sales
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total2 3282 071
IFRS 17 \u2013 non-unit-linked975978
IFRS 17 \u2013 unit-linked17199
IFRS 17 \u2013 hybrid131115
Non-IFRS 171 051880
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Non-IFRS 17 sales figures mainly refer to investment contracts without discretionary participation features (DPF), measured
\n
under IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and
\n
commission income\u2019.
\n
\u2022 Hybrid products: see Note 5.6.1.
\n

\n\n\n\n

\n\n

\n
Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
\n
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
\n
and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
\n
recorded under \u2018Designated at fair value\u2019 (see accounting policies).
\n
\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
\n
(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
\n
\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
\n
transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
\n
risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
\n
financial liability is recognised equalling the cash received.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
\n
we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfNetAssetValueAttributableToUnitholdersExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag738": { "value": "\n

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\n\n
Note 3.7: Operating expenses
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-5 125-4 805
Staff expenses-2 677-2 561
General administrative expenses
ICT-634-562
Facility expenses-265-224
Marketing and communications-108-109
Professional service fees-144-157
Bank and insurance tax-687-646
Other-224-172
Depreciation and amortisation of fixed assets-386-374
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 The table above contains the sum of \u2018Total operating expenses excluding bank and insurance tax\u2019 and \u2018Bank and insurance
\n
tax\u2019 from the income statement.
\n
\u2022 The total expenses went up by 7% in 2023 compared to 2022.
\n
- This amount includes 687 million euros in bank and insurance tax, a further 6% increase year-on-year, due in part to a higher
\n
amount in additional tax in Hungary.
\n
- Excluding bank and insurance tax, these expenses amounted to 4 438 million euros and increased by 7%, mainly attributable
\n
to inflationary pressure on wages, higher ICT and facility expenses, as well as the negative impact of the consolidation of
\n
Raiffeisenbank Bulgaria, only partly offset by, among other things, the positive impact of the sale of the Irish portfolios.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of the
\n
Executive Committee and the Board of Directors is provided under \u2018Remuneration report\u2019 in the \u2018Corporate governance
\n
statement\u2019 section; details of the statutory auditor\u2019s remuneration (PWC) are provided in Note 6.4.
\n
\u2022 Information on the capital increase reserved for KBC group employees can be found in the \u2018Company annual accounts and
\n
additional information\u2019 section. In 2023, this did not result in the recognition of a limited employee benefit, as the issue price did
\n
not include a discount compared to the market price in 2023. Information regarding the price of the KBC share can be found in
\n
the \u2018Report of the Board of Directors\u2019 section.
\n
\u2022 In 2023, the Belgian government decided to further increase the national bank tax by means of a higher bank tax for deposits
\n
on the balance sheet exceeding 50 billion euros and by abolishing the deductibility of the bank tax in full, the negative impact
\n
of which is estimated at 40 million euros from 2024 (of which 30 million euros in bank and insurance tax). Moreover, the
\n
contribution to the deposit guarantee scheme was increased, with a negative impact of 8 million euros in 2023, and an
\n
estimated negative impact of 24 million euros for 2024.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag739": { "value": "\n

\n\n
Note 3.7: Operating expenses
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-5 125-4 805
Staff expenses-2 677-2 561
General administrative expenses
ICT-634-562
Facility expenses-265-224
Marketing and communications-108-109
Professional service fees-144-157
Bank and insurance tax-687-646
Other-224-172
Depreciation and amortisation of fixed assets-386-374
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The table above contains the sum of \u2018Total operating expenses excluding bank and insurance tax\u2019 and \u2018Bank and insurance
\n
tax\u2019 from the income statement.
\n
\u2022 The total expenses went up by 7% in 2023 compared to 2022.
\n
- This amount includes 687 million euros in bank and insurance tax, a further 6% increase year-on-year, due in part to a higher
\n
amount in additional tax in Hungary.
\n
- Excluding bank and insurance tax, these expenses amounted to 4 438 million euros and increased by 7%, mainly attributable
\n
to inflationary pressure on wages, higher ICT and facility expenses, as well as the negative impact of the consolidation of
\n
Raiffeisenbank Bulgaria, only partly offset by, among other things, the positive impact of the sale of the Irish portfolios.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of the
\n
Executive Committee and the Board of Directors is provided under \u2018Remuneration report\u2019 in the \u2018Corporate governance
\n
statement\u2019 section; details of the statutory auditor\u2019s remuneration (PWC) are provided in Note 6.4.
\n
\u2022 Information on the capital increase reserved for KBC group employees can be found in the \u2018Company annual accounts and
\n
additional information\u2019 section. In 2023, this did not result in the recognition of a limited employee benefit, as the issue price did
\n
not include a discount compared to the market price in 2023. Information regarding the price of the KBC share can be found in
\n
the \u2018Report of the Board of Directors\u2019 section.
\n
\u2022 In 2023, the Belgian government decided to further increase the national bank tax by means of a higher bank tax for deposits
\n
on the balance sheet exceeding 50 billion euros and by abolishing the deductibility of the bank tax in full, the negative impact
\n
of which is estimated at 40 million euros from 2024 (of which 30 million euros in bank and insurance tax). Moreover, the
\n
contribution to the deposit guarantee scheme was increased, with a negative impact of 8 million euros in 2023, and an
\n
estimated negative impact of 24 million euros for 2024.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag740": { "value": "\n
Note 3.7: Operating expenses
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-5 125-4 805
Staff expenses-2 677-2 561
General administrative expenses
ICT-634-562
Facility expenses-265-224
Marketing and communications-108-109
Professional service fees-144-157
Bank and insurance tax-687-646
Other-224-172
Depreciation and amortisation of fixed assets-386-374
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 The table above contains the sum of \u2018Total operating expenses excluding bank and insurance tax\u2019 and \u2018Bank and insurance
\n
tax\u2019 from the income statement.
\n
\u2022 The total expenses went up by 7% in 2023 compared to 2022.
\n
- This amount includes 687 million euros in bank and insurance tax, a further 6% increase year-on-year, due in part to a higher
\n
amount in additional tax in Hungary.
\n
- Excluding bank and insurance tax, these expenses amounted to 4 438 million euros and increased by 7%, mainly attributable
\n
to inflationary pressure on wages, higher ICT and facility expenses, as well as the negative impact of the consolidation of
\n
Raiffeisenbank Bulgaria, only partly offset by, among other things, the positive impact of the sale of the Irish portfolios.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of the
\n
Executive Committee and the Board of Directors is provided under \u2018Remuneration report\u2019 in the \u2018Corporate governance
\n
statement\u2019 section; details of the statutory auditor\u2019s remuneration (PWC) are provided in Note 6.4.
\n
\u2022 Information on the capital increase reserved for KBC group employees can be found in the \u2018Company annual accounts and
\n
additional information\u2019 section. In 2023, this did not result in the recognition of a limited employee benefit, as the issue price did
\n
not include a discount compared to the market price in 2023. Information regarding the price of the KBC share can be found in
\n
the \u2018Report of the Board of Directors\u2019 section.
\n
\u2022 In 2023, the Belgian government decided to further increase the national bank tax by means of a higher bank tax for deposits
\n
on the balance sheet exceeding 50 billion euros and by abolishing the deductibility of the bank tax in full, the negative impact
\n
of which is estimated at 40 million euros from 2024 (of which 30 million euros in bank and insurance tax). Moreover, the
\n
contribution to the deposit guarantee scheme was increased, with a negative impact of 8 million euros in 2023, and an
\n
estimated negative impact of 24 million euros for 2024.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n
Note 5.4: Property and equipment and investment property
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Property and equipment3 2162 989
Investment property485571
Rental income5350
Direct operating expenses from investments generating rental income1515
Direct operating expenses from investments not generating rental income11
\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Land and ITOtherTotal property
MOVEMENTS TABLEbuildingsequipmentequipmentand equipmentInvestment property
2023
Opening balance1 3731301 4862 989571
Acquisitions1065383098834
Disposals-240-242-266-82
Depreciation-119-62-25-206-31
Other movements-301-260-289-7
Closing balance1 3061221 7893 216485
accumulated depreciation and impairment1 5854799152 979308
Fair value733
2022
Opening balance1 4791171 4543 050518
Acquisitions376847057585
Disposals-30-1-204-235-13
Depreciation-120-60-25-205-31
Other movements76-209-19612
Closing balance1 3731301 4862 989571
accumulated depreciation and impairment1 5704468762 892376
Fair value\u2013\u2013\u2013\u2013827
\n\n\n
\n\n
\u2022 Annual rates of depreciation: mainly 3% for buildings (including investment property), 33% for IT equipment, between 5% and
\n
33% for other equipment. No depreciation is charged for land.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There was a small amount (around 0.4 billion euros) for commitments for the acquisition of property and equipment. There are
\n
no material restrictions on title, or on property and equipment pledged as security for liabilities.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
building and construction, state of repair, use, etc.).
\n
\u2022 Certain other investment property is valued annually by in-house specialists based on the current annual rental per building
\n
and expected rental movements and on an individual capitalisation rate per building.
\n
\u2022 The impact of the heavy flooding and other extreme weather conditions in 2023 and 2022 on property and equipment and
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
regarding climate-related and other ESG risks, see the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The impact of our own activities as a bank-insurer on the environment is very limited, especially when compared to industrial
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
See \u2018Focus the on the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed
\n
explanation (the statutory auditor has not audited this section). More details can also be found in our Climate Report and our
\n
Sustainability Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n

\n
Note 5.5: Goodwill and other intangible assets
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Discount rates throughout the specific period
Goodwill outstanding31-12-202331-12-2022of cashflow projections
(in millions of EUR)31-12-202331-12-2022
K&H Bank18117315.2% \u2013 13.7%17.3% \u2013 13.3%
\u010cSOB (Czech Republic)25225913.0% \u2013 12.8%13.9% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna 6617613.0% \u2013 12.8%13.2% \u2013 12.8%
United Bulgarian Bank54654413.3% \u2013 12.5%12.5% \u2013 12.2%
DZI Insurance757511.2% \u2013 10.4%10.5% \u2013 8.1%
KBC Commercial Finance212112.0%9.9%
Pension Insurance Company UBB56568.3% \u2013 8.4%9.3% \u2013 9.1%
Rest4242\u2013\u2013
Total1 2401 346\u2013\u2013
\n\n\n\n\n\n\n\n
\n
\u2022 The period to which the cashflow budgets and projections relate is 10 years in most cases. This longer period is used to take
\n
account of current strong growth in the Central and Eastern European countries, where the growth rate is expected to
\n
develop towards a more moderate level in the longer term.
\n
\u2022 The growth rate used to extrapolate the cashflow projections after that period is equal to the expected long-term growth
\n
rate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2023 (also between
\n
3.2% and 4.7% in 2022).
\n
\u2022 No sensitivity analysis was carried out for entities where the recoverable amount exceeded the carrying value to such a large
\n
extent that no reasonably possible change in the key assumptions would result in the recoverable amount being less than or
\n
equal to the carrying value. The table gives an indication for the other entities of the impact of reasonable changes in the key
\n
assumptions on goodwill impairment.
\n
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Sensitivity to reasonable changes1.0% increase1.0% increase5% decrease
(in millions of EUR)* in discount ratein targeted solvency ratioin annual net profit
United Bulgarian Bank-164-109-98
\u010cSOB Stavebn\u00ed sporitelna-9-9-12
* The impact of the changes is calculated ceteris paribus.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag741": { "value": "\n
Note 3.8: Personnel
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(number)20232022
Total average number of persons employed (in full-time equivalents)38 60937 946
By legal entity
KBC Bank28 70828 741
KBC Insurance4 0674 024
KBC Group NV (holding company) and KBC Global Services NV (cost-sharing structure) 5 8345 181
By employee classification
Blue-collar staff389389
White-collar staff37 96037 306
Senior management260 251
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\n
\u2022 The figures in the table are annual averages, which \u2013 in terms of scope \u2013 may differ from year-end figures that are provided
\n
elsewhere.
\n
\u2022 The 2022 figures contain the acquired Raiffeisenbank Bulgaria for six months and still contain KBC Bank Ireland, as the sale of
\n
the activities had not yet been finalised at year-end 2022. In 2023, Raiffeisenbank Bulgaria (now merged with UBB) was fully
\n
added and KBC Bank Ireland was strongly reduced (finalisation of the sale of the activities in February 2023).
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Transactions with key management (members of the Board of Directors and Executive Committee of
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KBC Group NV) (in millions of EUR)*20232022
Total*1513
Breakdown by type of remuneration
Short-term employee benefits1211
Post-employment benefits22
Defined benefit plans00
Defined contribution plans22
Other long-term employee benefits00
Termination benefits00
Share-based payments00
Stock options (units)
At the beginning of the period00
Granted00
Exercised00
Composition-related changes00
At the end of the period00
Advances and loans granted to key management and partners11
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* Remuneration to key management or partners of the consolidating company on the basis of their activity in that company, its subsidiaries and associated companies, including the
\n
amount of retirement pensions granted to former key management staff on that basis.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag743": { "value": "\n

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Note 3.9: Impairment (income statement)
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(in millions of EUR*)20232022
Total-215-282
Impairment on financial assets at AC and at FVOCI16-154
(impairment on loans)
By IFRS category
Financial assets at amortised cost17-155
Financial assets at fair value through OCI-11
By product
Loans and advances-5-177
Debt securities7-3
Off-balance-sheet commitments and financial guarantees1525
By type
Stage 1 (12-month ECL)-415
Stage 2 (lifetime ECL)161-107
Stage 3 (lifetime ECL)-92-60
Purchased or originated credit impaired assets-118
By business unit/country
Belgium-82-35
Czech Republic70-46
International Markets19-78
Slovakia8-19
Hungary11-29
Bulgaria0-30
Group Centre85
Impairment on goodwill-109-5
Impairment on other-122-123
Intangible fixed assets (other than goodwill)-77-34
Property and equipment (including investment property)-15-18
Associated companies and joint ventures00
Other-30-71
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* Positive figures indicate a reversal and hence a positive impact on results
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\u2022 Impairment on loans:
\n
- In 2023, this item included a partial reversal of 155 million euros related to the reserve for geopolitical and emerging risks (see
\n
below) and a net increase of 139 million euros for loans in the loan portfolio.
\n
- In 2022, this item included a full reversal of the remaining 255 million euros in coronavirus-related ECL, net provisioning of 413
\n
million euros for geopolitical and emerging risks, net provisioning of 17 million euros related to the sale transactions in Ireland
\n
(see Note 6.6) and a net reversal of 21 million euros for loans in the loan portfolio.
\n
- The impact of the extreme weather conditions, including flooding and storms, in 2023 and 2022 on (impairment on) loans
\n
was insignificant.
\n
\u2022 Impairment on goodwill:
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- In 2023, this item included 109 million euros related to \u010cSOB Stavebn\u00ed spo\u0159itelna (see below)
\n
\u2022 Impairment on other:
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- In 2023, this item included impairment of fixed assets (partly relating to the sale in Ireland) and software, and modification
\n
losses related to the extension/expansion of the interest cap regulation in Hungary.
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- In 2022, this item included an impairment of tangible and intangible assets relating to the sale transactions in Ireland,
\n
impairment of real estate and modification losses related to the extension/expansion of the interest cap regulation in
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Hungary.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n
Among other things, this section also provides more information on impaired loans (Stage 3).
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\u2022 For information on total impairment recognised in the balance sheet, see Note 4.2.
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\u2022 More background information and methodology for KBC\u2019s ECL model is provided in the accounting policies under \u2018Financial
\n
assets \u2013 impairment\u2019 in Note 1.2.
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\u2022 KBC uses specific models for PD, EAD and LGD in order to calculate ECL. It is essential to take account of historical observations
\n
and forward-looking projections in this respect.
\n
- PD represents the probability of a counterparty defaulting in the next 12 months or during the entire term of the facility
\n
(depending on which IFRS 9 \u2018Stage\u2019 the facility is in). The PD is determined by the counterparty\u2019s internal (and, if applicable,
\n
external) credit rating. Variables used in PD models include financial ratios and behavioural parameters (arrears).
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- EAD represents the estimated outstanding debt at the time of default and depends on the existing outstanding debt and
\n
any changes permitted under the contract and normal repayments. Variables used in these models include product types
\n
and repayment schedules.
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- LGD is the estimated size of the loss relative to the outstanding debt at the time of default. LGD is presented as a
\n
percentage of the outstanding debt and is determined by historical amounts recovered on similar claims. Variables used in
\n
these models include collateral types and financial ratios.
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\u2022 On 31 December 2023, there were around 80 different IFRS 9 models. In addition to several group-wide models, we have
\n
separate PD, EAD and LGD models for each of our core countries. In accordance with the Basel grouping approach, we use
\n
the type of counterparty (private individuals, SMEs, companies, governments, etc.) to determine the scope of an IFRS 9 model.
\n
Each model allows for differentiation in terms of facility type (term loans, revolving facilities, etc.) and collateral type (mortgages,
\n
pledges on business assets, guarantees, etc.). Examples of IFRS 9 models include \u2018Banks\u2019, \u2018Belgian private persons \u2013 home
\n
loans\u2019, \u2018Czech corporates\u2019, \u2018Bulgarian corporates and SMEs\u2019 and \u2018Central governments\u2019. Detailed documentation is available
\n
for each PD, EAD and LGD model. The main models are subject to review by external auditors. The Basel models, which the
\n
IFRS 9 models are based on, are subject to external control performed by the supervisory authorities.
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\u2022 We create the models for the various portfolios using typical PD, EAD and LGD inputs, as well as macro- and microeconomic
\n
variables to the extent that there is a statistical relationship. The macroeconomic variables are GDP growth, the unemployment
\n
rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation. Microeconomic variables
\n
include, for example, confidence indicators, the harmonised index of consumer prices (HICP), the producer price index (PPI), and
\n
so on. As a result of regular back-testing, models may change and economic variables may be reassessed. The following table
\n
gives the base-case scenario for the three key indicators (GDP growth, unemployment rate and house price index) for each of
\n
our core countries for the coming years. After that, we take into account a gradual linear transition towards a stable situation.
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Macroeconomic base-case scenarios \u2013 key indicators
(used for situation at year-end 2023) *202320242025
Real GDP growth
Belgium1.4%0.8%1.1%
Czech Republic-0.5%1.4%3.1%
Hungary-0.5%2.8%3.3%
Slovakia1.2%2.2%3.3%
Bulgaria1.9%2.3%3.0%
Unemployment rate
Belgium5.8%5.7%5.6%
Czech Republic2.8%3.3%3.2%
Hungary4.1%3.8%3.6%
Slovakia6.1%6.3%6.0%
Bulgaria4.5%4.2%4.0%
House price index
Belgium1.0%1.5%2.5%
Czech Republic-2.0%1.7%3.5%
Hungary0.0%3.0%4.0%
Slovakia-3.5%0.0%3.5%
Bulgaria8.4%0.7%3.0%
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* This deviates from the (more recent) estimates provided in the \u2018Report of the Board of Directors\u2019, under the \u2018Market conditions in our core markets in 2023\u2019 and \u2018Our business units\u2019 sections.
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\u2022 We use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
\n
weightings at year-end 2023 were 60% for the \u2018base\u2019 scenario, 10% for the \u2018up\u2019 scenario and 30% for the \u2018down\u2019 scenario. The
\n
forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on the collectively
\n
assessed ECL (i.e. without the ECL for individually assessed loans of 1.6 billion euros at year-end 2023 and year-end 2022) shows
\n
that the \u2018base\u2019 scenario generates an ECL of 0.9 billion euros (1.0 billion euros in 2022), which is 0.1 billion euros lower than for
\n
the \u2018down\u2019 scenario (0.1 billion euros in 2022) and 0.0 billion euros higher than for the \u2018up\u2019 scenario (0.0 billion euros in 2022). The
\n
assessed scenario-weighted collective ECL (that was recognised) amounted to 0.9 billion euros (1.0 billion euros in 2022). These
\n
amounts include the ECL related to geopolitical and emerging risks.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
100% 100% 100%
Collectively assessed ECL by country (2023, in billions of EUR)base-case optimistic pessimistic
scenarioscenarioscenario
Total0.90.91.0
Belgium0.30.30.3
Czech Republic0.30.30.3
Slovakia0.10.10.1
Hungary0.10.10.1
Bulgaria0.10.10.2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 As set out in the \u2018How do we manage our risks?\u2019 section, KBC considers ESG risks in its credit risk management processes. The
\n
vulnerability of individual corporate clients to specific ESG risks may become apparent during the term of the loan in client-
\n
specific credit risk figures, such as credit risk ratings and collateral valuations affecting the ECL calculation. Especially in terms
\n
of climate risk, which may have considerable consequences for certain sectors in the longer term, the impact on our loan
\n
portfolio is not expected to occur within the time horizon considered for the ECL measurement.
\n
\u2022 Impairment on goodwill: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the reduction
\n
of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future projected earnings.
\n
This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros (based on the exchange
\n
rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of \u010cSOB Stavebn\u00ed (the former
\n
\u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time, which resulted in a one-off gain
\n
of 82 million euros. On 11 May 2023, the Czech government coalition presented its fiscal stabilisation package, which included
\n
a proposal for the reduction of the building saving state subsidy. The Czech government coalition\u2019s compromise was reflected
\n
in the government proposal, which was approved by the Czech Parliament on 8 November 2023.
\n
\u2022 Reserve for geopolitical and emerging risks: the outstanding balance of the ECL for geopolitical and emerging risks came to
\n
256 million euros at year-end 2023; the corresponding figure at year-end 2022 was 429 million euros. This decline is largely
\n
attributable to the improved micro- and macroeconomic outlook and the finalisation of the sale of KBC Bank Ireland\u2019s loan
\n
portfolio. This ECL is determined based on individual counterparties and certain sub-segments in our portfolio which are
\n
deemed to have incurred an increase in credit risk because they are either (\u00b0) exposed to the current emerging risks (high
\n
inflation and interest rates, high(er) energy prices, supply chain disruption) which affect our corporate and SME clients with
\n
activities in a number of vulnerable sectors (e.g., automotive, construction, chemicals and metals) and retail clients with a
\n
limited buffer to absorb the higher cost of living and/or to make higher repayments ensuing from higher interest rates, or (\u00b0)
\n
directly or indirectly exposed to ongoing military conflicts, such as the one in Ukraine. This analysis shows that for 12 billion euros
\n
in \u2018Stage 1\u2019 positions, which are not (yet) included in the standard staging assessment, credit risk has increased considerably.
\n
At year-end 2022, this was 14 billion euros.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n
Note 5.4: Property and equipment and investment property
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Property and equipment3 2162 989
Investment property485571
Rental income5350
Direct operating expenses from investments generating rental income1515
Direct operating expenses from investments not generating rental income11
\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Land and ITOtherTotal property
MOVEMENTS TABLEbuildingsequipmentequipmentand equipmentInvestment property
2023
Opening balance1 3731301 4862 989571
Acquisitions1065383098834
Disposals-240-242-266-82
Depreciation-119-62-25-206-31
Other movements-301-260-289-7
Closing balance1 3061221 7893 216485
accumulated depreciation and impairment1 5854799152 979308
Fair value733
2022
Opening balance1 4791171 4543 050518
Acquisitions376847057585
Disposals-30-1-204-235-13
Depreciation-120-60-25-205-31
Other movements76-209-19612
Closing balance1 3731301 4862 989571
accumulated depreciation and impairment1 5704468762 892376
Fair value\u2013\u2013\u2013\u2013827
\n\n\n
\n\n
\u2022 Annual rates of depreciation: mainly 3% for buildings (including investment property), 33% for IT equipment, between 5% and
\n
33% for other equipment. No depreciation is charged for land.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There was a small amount (around 0.4 billion euros) for commitments for the acquisition of property and equipment. There are
\n
no material restrictions on title, or on property and equipment pledged as security for liabilities.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
building and construction, state of repair, use, etc.).
\n
\u2022 Certain other investment property is valued annually by in-house specialists based on the current annual rental per building
\n
and expected rental movements and on an individual capitalisation rate per building.
\n
\u2022 The impact of the heavy flooding and other extreme weather conditions in 2023 and 2022 on property and equipment and
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
regarding climate-related and other ESG risks, see the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The impact of our own activities as a bank-insurer on the environment is very limited, especially when compared to industrial
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
See \u2018Focus the on the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed
\n
explanation (the statutory auditor has not audited this section). More details can also be found in our Climate Report and our
\n
Sustainability Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n
Note 5.5: Goodwill and other intangible assets
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag744": { "value": "\n

\n
Note 3.9: Impairment (income statement)
\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR*)20232022
Total-215-282
Impairment on financial assets at AC and at FVOCI16-154
(impairment on loans)
By IFRS category
Financial assets at amortised cost17-155
Financial assets at fair value through OCI-11
By product
Loans and advances-5-177
Debt securities7-3
Off-balance-sheet commitments and financial guarantees1525
By type
Stage 1 (12-month ECL)-415
Stage 2 (lifetime ECL)161-107
Stage 3 (lifetime ECL)-92-60
Purchased or originated credit impaired assets-118
By business unit/country
Belgium-82-35
Czech Republic70-46
International Markets19-78
Slovakia8-19
Hungary11-29
Bulgaria0-30
Group Centre85
Impairment on goodwill-109-5
Impairment on other-122-123
Intangible fixed assets (other than goodwill)-77-34
Property and equipment (including investment property)-15-18
Associated companies and joint ventures00
Other-30-71
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* Positive figures indicate a reversal and hence a positive impact on results
\n

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\u2022 Impairment on loans:
\n
- In 2023, this item included a partial reversal of 155 million euros related to the reserve for geopolitical and emerging risks (see
\n
below) and a net increase of 139 million euros for loans in the loan portfolio.
\n
- In 2022, this item included a full reversal of the remaining 255 million euros in coronavirus-related ECL, net provisioning of 413
\n
million euros for geopolitical and emerging risks, net provisioning of 17 million euros related to the sale transactions in Ireland
\n
(see Note 6.6) and a net reversal of 21 million euros for loans in the loan portfolio.
\n
- The impact of the extreme weather conditions, including flooding and storms, in 2023 and 2022 on (impairment on) loans
\n
was insignificant.
\n
\u2022 Impairment on goodwill:
\n
- In 2023, this item included 109 million euros related to \u010cSOB Stavebn\u00ed spo\u0159itelna (see below)
\n
\u2022 Impairment on other:
\n
- In 2023, this item included impairment of fixed assets (partly relating to the sale in Ireland) and software, and modification
\n
losses related to the extension/expansion of the interest cap regulation in Hungary.
\n
- In 2022, this item included an impairment of tangible and intangible assets relating to the sale transactions in Ireland,
\n
impairment of real estate and modification losses related to the extension/expansion of the interest cap regulation in
\n
Hungary.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n
Among other things, this section also provides more information on impaired loans (Stage 3).
\n
\u2022 For information on total impairment recognised in the balance sheet, see Note 4.2.
\n
\u2022 More background information and methodology for KBC\u2019s ECL model is provided in the accounting policies under \u2018Financial
\n
assets \u2013 impairment\u2019 in Note 1.2.
\n

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\n
\u2022 KBC uses specific models for PD, EAD and LGD in order to calculate ECL. It is essential to take account of historical observations
\n
and forward-looking projections in this respect.
\n
- PD represents the probability of a counterparty defaulting in the next 12 months or during the entire term of the facility
\n
(depending on which IFRS 9 \u2018Stage\u2019 the facility is in). The PD is determined by the counterparty\u2019s internal (and, if applicable,
\n
external) credit rating. Variables used in PD models include financial ratios and behavioural parameters (arrears).
\n
- EAD represents the estimated outstanding debt at the time of default and depends on the existing outstanding debt and
\n
any changes permitted under the contract and normal repayments. Variables used in these models include product types
\n
and repayment schedules.
\n
- LGD is the estimated size of the loss relative to the outstanding debt at the time of default. LGD is presented as a
\n
percentage of the outstanding debt and is determined by historical amounts recovered on similar claims. Variables used in
\n
these models include collateral types and financial ratios.
\n
\u2022 On 31 December 2023, there were around 80 different IFRS 9 models. In addition to several group-wide models, we have
\n
separate PD, EAD and LGD models for each of our core countries. In accordance with the Basel grouping approach, we use
\n
the type of counterparty (private individuals, SMEs, companies, governments, etc.) to determine the scope of an IFRS 9 model.
\n
Each model allows for differentiation in terms of facility type (term loans, revolving facilities, etc.) and collateral type (mortgages,
\n
pledges on business assets, guarantees, etc.). Examples of IFRS 9 models include \u2018Banks\u2019, \u2018Belgian private persons \u2013 home
\n
loans\u2019, \u2018Czech corporates\u2019, \u2018Bulgarian corporates and SMEs\u2019 and \u2018Central governments\u2019. Detailed documentation is available
\n
for each PD, EAD and LGD model. The main models are subject to review by external auditors. The Basel models, which the
\n
IFRS 9 models are based on, are subject to external control performed by the supervisory authorities.
\n\n

\n\n
\u2022 We create the models for the various portfolios using typical PD, EAD and LGD inputs, as well as macro- and microeconomic
\n
variables to the extent that there is a statistical relationship. The macroeconomic variables are GDP growth, the unemployment
\n
rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation. Microeconomic variables
\n
include, for example, confidence indicators, the harmonised index of consumer prices (HICP), the producer price index (PPI), and
\n
so on. As a result of regular back-testing, models may change and economic variables may be reassessed. The following table
\n
gives the base-case scenario for the three key indicators (GDP growth, unemployment rate and house price index) for each of
\n
our core countries for the coming years. After that, we take into account a gradual linear transition towards a stable situation.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Macroeconomic base-case scenarios \u2013 key indicators
(used for situation at year-end 2023) *202320242025
Real GDP growth
Belgium1.4%0.8%1.1%
Czech Republic-0.5%1.4%3.1%
Hungary-0.5%2.8%3.3%
Slovakia1.2%2.2%3.3%
Bulgaria1.9%2.3%3.0%
Unemployment rate
Belgium5.8%5.7%5.6%
Czech Republic2.8%3.3%3.2%
Hungary4.1%3.8%3.6%
Slovakia6.1%6.3%6.0%
Bulgaria4.5%4.2%4.0%
House price index
Belgium1.0%1.5%2.5%
Czech Republic-2.0%1.7%3.5%
Hungary0.0%3.0%4.0%
Slovakia-3.5%0.0%3.5%
Bulgaria8.4%0.7%3.0%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* This deviates from the (more recent) estimates provided in the \u2018Report of the Board of Directors\u2019, under the \u2018Market conditions in our core markets in 2023\u2019 and \u2018Our business units\u2019 sections.
\n

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\n\n

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\u2022 We use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
\n
weightings at year-end 2023 were 60% for the \u2018base\u2019 scenario, 10% for the \u2018up\u2019 scenario and 30% for the \u2018down\u2019 scenario. The
\n
forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on the collectively
\n
assessed ECL (i.e. without the ECL for individually assessed loans of 1.6 billion euros at year-end 2023 and year-end 2022) shows
\n
that the \u2018base\u2019 scenario generates an ECL of 0.9 billion euros (1.0 billion euros in 2022), which is 0.1 billion euros lower than for
\n
the \u2018down\u2019 scenario (0.1 billion euros in 2022) and 0.0 billion euros higher than for the \u2018up\u2019 scenario (0.0 billion euros in 2022). The
\n
assessed scenario-weighted collective ECL (that was recognised) amounted to 0.9 billion euros (1.0 billion euros in 2022). These
\n
amounts include the ECL related to geopolitical and emerging risks.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
100% 100% 100%
Collectively assessed ECL by country (2023, in billions of EUR)base-case optimistic pessimistic
scenarioscenarioscenario
Total0.90.91.0
Belgium0.30.30.3
Czech Republic0.30.30.3
Slovakia0.10.10.1
Hungary0.10.10.1
Bulgaria0.10.10.2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 As set out in the \u2018How do we manage our risks?\u2019 section, KBC considers ESG risks in its credit risk management processes. The
\n
vulnerability of individual corporate clients to specific ESG risks may become apparent during the term of the loan in client-
\n
specific credit risk figures, such as credit risk ratings and collateral valuations affecting the ECL calculation. Especially in terms
\n
of climate risk, which may have considerable consequences for certain sectors in the longer term, the impact on our loan
\n
portfolio is not expected to occur within the time horizon considered for the ECL measurement.
\n
\u2022 Impairment on goodwill: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the reduction
\n
of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future projected earnings.
\n
This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros (based on the exchange
\n
rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of \u010cSOB Stavebn\u00ed (the former
\n
\u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time, which resulted in a one-off gain
\n
of 82 million euros. On 11 May 2023, the Czech government coalition presented its fiscal stabilisation package, which included
\n
a proposal for the reduction of the building saving state subsidy. The Czech government coalition\u2019s compromise was reflected
\n
in the government proposal, which was approved by the Czech Parliament on 8 November 2023.
\n
\u2022 Reserve for geopolitical and emerging risks: the outstanding balance of the ECL for geopolitical and emerging risks came to
\n
256 million euros at year-end 2023; the corresponding figure at year-end 2022 was 429 million euros. This decline is largely
\n
attributable to the improved micro- and macroeconomic outlook and the finalisation of the sale of KBC Bank Ireland\u2019s loan
\n
portfolio. This ECL is determined based on individual counterparties and certain sub-segments in our portfolio which are
\n
deemed to have incurred an increase in credit risk because they are either (\u00b0) exposed to the current emerging risks (high
\n
inflation and interest rates, high(er) energy prices, supply chain disruption) which affect our corporate and SME clients with
\n
activities in a number of vulnerable sectors (e.g., automotive, construction, chemicals and metals) and retail clients with a
\n
limited buffer to absorb the higher cost of living and/or to make higher repayments ensuing from higher interest rates, or (\u00b0)
\n
directly or indirectly exposed to ongoing military conflicts, such as the one in Ukraine. This analysis shows that for 12 billion euros
\n
in \u2018Stage 1\u2019 positions, which are not (yet) included in the standard staging assessment, credit risk has increased considerably.
\n
At year-end 2022, this was 14 billion euros.
\n

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Note 4.2.1: Impaired financial assets
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
\n
customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
\n

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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
\n
to:
\n
\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
\n
\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
\n
\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
\n
due primarily to:
\n
\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
\n
indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
\n
billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
\n
Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
\n
with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
\n
loans and advances at amortised cost in \u2018Stage 1\u2019.
\n
\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
\n
\u2018Stage 1\u2019:
\n
\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
\n
offset by a decline in companies), and related primarily to net investments.
\n
\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
\n
\u25e6 Derecognised financial assets.
\n
\u25e6 Partly offset by other changes (see Note 3.9).
\n
At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
\n
respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
\n
amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
\n
(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
\n
in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
\n
accounting policies at KBC Bank Bulgaria for determining impairment.
\n
For information on other changes, see Note 3.9.
\n
\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
\n
audited this section).
\n
\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
\n
modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
\n
modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
\n
2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
\n
(see Note 3.9).
\n
\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure in 2022 was 80 million euros.
\n

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\n\n

\n\n

\n\n
Note 4.2.2: Impairment details for loans and advances at amortised cost
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
\n\n\n\n\n\n\n\n
\n
1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
\n
2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
\n
3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
\n
before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
\n
\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
\n
on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
\n
securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
\n
\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
\n
(see Note 3.9).
\n
\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
\n
changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
\n
\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
\n
\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag745": { "value": "\n

\n\n

\n\n

\n\n
Note 3.10: Share in results of associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-4-10
Of which
IGLUU s.r.o.-1-1
Bancontact Payconiq Company NV11
Isabel NV32
Payconiq International S.A.-3-6
Batopin NV-3-3
Immoscoop 2.0 BV--2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Impairment on (goodwill on) associated companies and joint ventures is included in \u2018Impairment\u2019 (see Note 3.9). The share in
\n
results of associated companies and joint ventures does not therefore take this impairment into account.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Note 5.3: Investments in associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total3032
Overview of investments, including goodwill
IGLUU s.r.o.22
Immoscoop 2.0 BV01
Isabel NV1512
Bancontact Payconiq Company NV77
Payconiq International SA-7
Batopin NV31
Other23
Goodwill on associated companies and joint ventures
Gross amount00
Accumulated impairment00
Breakdown by type
Unlisted3032
Listed 00
Fair value of investments in listed associated companies and joint ventures00
\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Associated companies are companies on whose management KBC exerts significant influence, without having direct or
\n
indirect full or joint control. In general, KBC has a 20% to 50% shareholding in such companies. Joint ventures are companies
\n
over which KBC exercises joint control.
\n
\u2022 Goodwill paid on associated companies and joint ventures is included in the nominal value of \u2018Investments in associated
\n
companies and joint ventures\u2019 shown on the balance sheet. An impairment test is performed and, if required, the necessary
\n
impairment losses on goodwill recognised (see table).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag746": { "value": "\n

\n\n

\n\n
Note 3.10: Share in results of associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-4-10
Of which
IGLUU s.r.o.-1-1
Bancontact Payconiq Company NV11
Isabel NV32
Payconiq International S.A.-3-6
Batopin NV-3-3
Immoscoop 2.0 BV--2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Impairment on (goodwill on) associated companies and joint ventures is included in \u2018Impairment\u2019 (see Note 3.9). The share in
\n
results of associated companies and joint ventures does not therefore take this impairment into account.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
Note 5.3: Investments in associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total3032
Overview of investments, including goodwill
IGLUU s.r.o.22
Immoscoop 2.0 BV01
Isabel NV1512
Bancontact Payconiq Company NV77
Payconiq International SA-7
Batopin NV31
Other23
Goodwill on associated companies and joint ventures
Gross amount00
Accumulated impairment00
Breakdown by type
Unlisted3032
Listed 00
Fair value of investments in listed associated companies and joint ventures00
\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Associated companies are companies on whose management KBC exerts significant influence, without having direct or
\n
indirect full or joint control. In general, KBC has a 20% to 50% shareholding in such companies. Joint ventures are companies
\n
over which KBC exercises joint control.
\n
\u2022 Goodwill paid on associated companies and joint ventures is included in the nominal value of \u2018Investments in associated
\n
companies and joint ventures\u2019 shown on the balance sheet. An impairment test is performed and, if required, the necessary
\n
impairment losses on goodwill recognised (see table).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Note 6.5: Subsidiaries, joint ventures and associated companies
\n
KBC Group: main companies included in the scope of
\n
consolidation at year-end 2023
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Share of
capital held
Companyat group Business
CompanyRegistered officenumberlevel (in %)unit *Activity
KBC Bank (group)
KBC Bank NVBrussels \u2013 BE0462.920.226100.00BEL/GRPcredit institution
CBC BANQUE SANamur \u2013 BE0403.211.380100.00BELcredit institution
\u010ceskoslovensk\u00e1 Obchodn\u00e1 Banka a.s.Bratislava \u2013 SK--100.00IMAcredit institution
\u010ceskoslovensk\u00e1 Obchodn\u00ed Banka a.s.Prague \u2013 CZ--100.00CZRcredit institution
KBC Asset Management NVBrussels \u2013 BE0469.444.267100.00BELasset management
KBC Autolease NVLeuven \u2013 BE0422.562.385100.00BELleasing
KBC Commercial Finance NVBrussels \u2013 BE0403.278.488100.00BELfactoring
KBC IFIMA SALuxembourg \u2013 LU--100.00GRPFinance
KBC Securities NVBrussels \u2013 BE0437.060.521100.00BELstockbroker
K&H Bank Zrt.Budapest \u2013 HU--100.00IMAcredit institution
Loan Invest NVBrussels \u2013 BE0889.054.884100.00BELsecuritisation
United Bulgarian Bank ADSofia \u2013 BG--99.96IMAcredit institution
KBC Insurance (group)
KBC Insurance NVLeuven \u2013 BE0403.552.563100.00BEL/GRPinsurance company
ADD NVHeverlee \u2013 BE0406.080.305100.00BELinsurance broker
KBC Group Re SALuxembourg \u2013 LU--100.00GRPreinsurance company
\u010cSOB Poji\u0161t\u2019ovna a.s.Pardubice \u2013 CZ--100.00CZRinsurance company
\u010cSOB Poist\u2019ov\u0148a a.s.Bratislava \u2013 SK--100.00IMAinsurance company
DZI (group)Sofia \u2013 BG--100.00IMAinsurance company
Groep VAB NVZwijndrecht \u2013 BE0456.920.676100.00BELdriving school/roadside
assistance
K&H Biztos\u00edt\u00f3 Zrt.Budapest \u2013 HU--100.00IMAinsurance company
KBC group
DISCAI NVBrussels \u2013 BE0773.435.537100.00GRPsoftware company
KBC Group NVBrussels \u2013 BE0403.227.515100.00GRPbank-insurance holding
company
KBC Bank (group)various locations--100.00variouscredit institution
KBC Global Services NVBrussels \u2013 BE0772.332.707100.00GRPcost-sharing structure
KBC Insurance (group)various locations--100.00variousinsurance company
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* BEL: Belgium Business Unit; CZR: Czech Republic Business Unit: IMA: International Markets Business Unit; GRP = Group Centre.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n
\u2022 The KBC group\u2019s legal structure has one single entity \u2013 KBC Group NV \u2013 in control of two underlying companies, viz. KBC Bank
\n
NV and KBC Insurance NV, as well as companies such as DISCAI NV and KBC Global Services NV. KBC Bank and KBC Insurance
\n
have several subsidiaries and sub-subsidiaries. A complete list of group companies (included in or excluded from the scope
\n
of consolidation) is provided at www.kbc.com > About us > Our structure.
\n\n
\u2022 All (material) entities (including structured entities (SPVs)) over which the consolidating entity exercises, directly or indirectly,
\n
exclusive control are consolidated according the method of full consolidation. To assess whether or not structured entities
\n
have to be consolidated, KBC uses the principles set out in IFRS 10, as well as thresholds for inclusion in consolidation.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Disclosures of interests in other entities (IFRS 12)
\n
- Significant judgements and assumptions
\n
\u25e6 In general, funds managed by KBC are not included in the scope of consolidation, as they do not meet the three criteria
\n
of control (power, exposure to a variable return and ability to use such power to affect those returns).
\n
\u25e6 Joint entities in which KBC does not hold 50% of the share capital are classified as joint ventures, since it has joint
\n
control over these entities based on shareholder agreements. Based on the Articles of Association and/or shareholder
\n
agreements, voting rights in (and therefore the control of) the joint venture are spread evenly across the different
\n
shareholders and decisions may only be taken by unanimity.
\n
- Interests in subsidiaries
\n
\u25e6 For the vast majority of the entities, the voting rights are materially equal to the ownership rights.
\n
\u25e6 Pursuant to the joint capital decision, specific pillar-II levels have been set to ensure that certain minimum capital ratios
\n
are respected, which impose certain restrictions on the repatriation of capital and distribution of dividends.
\n
\u25e6 With regard to Loan Invest NV, KBC is exposed to loan losses on the mortgage portfolio and, therefore, recognises
\n
impairment losses on them where necessary.
\n
- Interests in unconsolidated structured entities
\n
\u25e6 KBC Bank NV is arranger and dealer of a number of 40-billion-euro medium term notes programmes issued by 19
\n
unconsolidated structured entities established for that purpose. These entities were established between 2006 and
\n
2016 under the Irish Companies Act 2014 as an Irish public limited company or an Irish private limited company. Their
\n
primary business is to raise money by issuing notes in order to buy financial assets (such as securities, bonds and
\n
deposits) and to enter into related derivative and other contracts. They provide investment opportunities for clients by
\n
providing economies of scale, a diversification of credit risk and a high level of granularity. Each structured entity has
\n
a prospectus that was approved by the Central Bank of Ireland (available at www.kbc.be/prospectus/spv). However,
\n
the structured entities are not consolidated because they fail to meet the three criteria for consolidation (power,
\n
exposure to a variable return and ability to use such power to affect those returns). At year-end 2023, the assets under
\n
management at these entities amounted to 5.4 billion euros.
\n
\u25e6 Sponsored unconsolidated structured entities are defined as structured entities where KBC or one of its subsidiaries
\n
acts as arranger of the issuance programme, but where the decision-making power of the entities does not reside with
\n
KBC or one of its subsidiaries. As a result, these entities are not consolidated.
\n
\u25e6 In 2023, KBC had received income from unconsolidated structured entities in the form of management fees (17 million
\n
euros) and accounting fees (1 million euros).
\n
\u25e6 At year-end 2023, KBC held 1.8 billion euros\u2019 worth of notes issued by the unconsolidated structured entities. Its liabilities
\n
towards the unconsolidated structured entities amounted to 0.9 billion euros and comprised mainly time deposits (0.9
\n
billion euros).
\n
\u25e6 Any potential decrease in the value of the notes is passed on to the end-client, which means it will have no impact on
\n
KBC.
\n
\u2022 At year-end 2023, no group companies were active in the extractive industry. As a result, no consolidated report on payments
\n
to governments has been prepared (see Art.3:8 \u00a7 1 of the Companies and Associations Code).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag747": { "value": "\n

\n\n
Note 3.10: Share in results of associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-4-10
Of which
IGLUU s.r.o.-1-1
Bancontact Payconiq Company NV11
Isabel NV32
Payconiq International S.A.-3-6
Batopin NV-3-3
Immoscoop 2.0 BV--2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Impairment on (goodwill on) associated companies and joint ventures is included in \u2018Impairment\u2019 (see Note 3.9). The share in
\n
results of associated companies and joint ventures does not therefore take this impairment into account.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Note 5.3: Investments in associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total3032
Overview of investments, including goodwill
IGLUU s.r.o.22
Immoscoop 2.0 BV01
Isabel NV1512
Bancontact Payconiq Company NV77
Payconiq International SA-7
Batopin NV31
Other23
Goodwill on associated companies and joint ventures
Gross amount00
Accumulated impairment00
Breakdown by type
Unlisted3032
Listed 00
Fair value of investments in listed associated companies and joint ventures00
\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Associated companies are companies on whose management KBC exerts significant influence, without having direct or
\n
indirect full or joint control. In general, KBC has a 20% to 50% shareholding in such companies. Joint ventures are companies
\n
over which KBC exercises joint control.
\n
\u2022 Goodwill paid on associated companies and joint ventures is included in the nominal value of \u2018Investments in associated
\n
companies and joint ventures\u2019 shown on the balance sheet. An impairment test is performed and, if required, the necessary
\n
impairment losses on goodwill recognised (see table).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag748": { "value": "\n
Note 3.10: Share in results of associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Total-4-10
Of which
IGLUU s.r.o.-1-1
Bancontact Payconiq Company NV11
Isabel NV32
Payconiq International S.A.-3-6
Batopin NV-3-3
Immoscoop 2.0 BV--2
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Impairment on (goodwill on) associated companies and joint ventures is included in \u2018Impairment\u2019 (see Note 3.9). The share in
\n
results of associated companies and joint ventures does not therefore take this impairment into account.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
Note 5.3: Investments in associated companies and joint ventures
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total3032
Overview of investments, including goodwill
IGLUU s.r.o.22
Immoscoop 2.0 BV01
Isabel NV1512
Bancontact Payconiq Company NV77
Payconiq International SA-7
Batopin NV31
Other23
Goodwill on associated companies and joint ventures
Gross amount00
Accumulated impairment00
Breakdown by type
Unlisted3032
Listed 00
Fair value of investments in listed associated companies and joint ventures00
\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Associated companies are companies on whose management KBC exerts significant influence, without having direct or
\n
indirect full or joint control. In general, KBC has a 20% to 50% shareholding in such companies. Joint ventures are companies
\n
over which KBC exercises joint control.
\n
\u2022 Goodwill paid on associated companies and joint ventures is included in the nominal value of \u2018Investments in associated
\n
companies and joint ventures\u2019 shown on the balance sheet. An impairment test is performed and, if required, the necessary
\n
impairment losses on goodwill recognised (see table).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag749": { "value": "\n
Note 3.11: Income tax expense
\n
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(in millions of EUR)20232022
Total-778-670
By type
Current taxes on income-532-525
Deferred taxes on income-246-144
Tax components
Result before tax4 1793 488
Income tax at the Belgian statutory rate25.00%25.00%
Income tax calculated-1 045-872
Plus/minus tax effects attributable to
differences in tax rates, Belgium \u2013 abroad234130
tax-free income11786
adjustments related to prior years41
adjustments to deferred taxes due to change in tax rate4-1
unused tax losses and unused tax credits to reduce current tax expense92
unused tax losses and unused tax credits to reduce deferred tax expense2528
reversal of previously recognised deferred tax assets due to tax losses00
other (including non-deductible expenses)-126-44
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\u2022 For information on tax assets and tax liabilities, see Note 5.2.
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\u2022 Taxes in 2022 were bolstered by a one-off recognition of 51 million euros in deferred tax assets, partly due to the increase in
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business tax in the UK from 19% to 25% and the recognition of a deferred tax asset in Ireland (see also Note 6.6). Taxes in 2023
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were bolstered by an updated estimate of future taxable profits of the London branch (15 million euros).
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\u2022 In 2023, income tax expense was negatively impacted by 36 million euros as the deductibility of the Belgian bank and insurance
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tax was reduced by 80%. The remainder of the tax deductibility (20%) will also be abolished as of 2024.
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\u2022 The government of the Czech Republic introduced a windfall tax, which will also apply to major banks and will be in force for
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the period 2023-2025. Any excess profits will be taxed at 79% (19% standard business tax, 60% windfall tax). As \u010cSOB in the
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Czech Republic did not make any excess profit in 2023, no Czech windfall tax is due.
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\u2022 On 14 December 2023, Belgium, where ultimate parent company KBC Group NV has its registered office, laid down the Pillar
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Two global minimum tax in statute and declared that it would take effect on 1 January 2024. Under these rules, KBC will be
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required to pay top-up tax (in Belgium or abroad) on the profits of its subsidiaries and permanent establishments, which are
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taxed at an effective tax rate of less than 15%. Based on the 2023 results, the additional top-up tax would be roughly 1% of the
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group\u2019s result before tax. The group has applied the temporary exception issued by the IASB in May 2023 relating to the
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accounting requirements for deferred taxes in IAS 12. The group will continue to monitor the effect of the Pillar Two legislation
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on its future financial performance.
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\u2022 Liquidation of KBC Bank Ireland: following approval from the Irish Ministry of Finance in September 2023, the remaining positions
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of KBC Bank Ireland were transferred to KBC Bank\u2019s Dublin branch, which means the main hurdles to commencing the legal
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process of liquidating KBC Bank Ireland have been overcome. The aim is to complete the process in 2024. Its formal conclusion
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may result in a tax-deductible loss for KBC Bank NV. No deferred tax assets have been recognised for this yet, as we currently
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regard it as a contingent asset that is subject to official authorisation from the Irish tax authorities to liquidate KBC Bank Ireland.
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This could lead to a tax benefit in the income statement of roughly 0.3 billion euros in 2024.
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\u2022 The table on the next page shows the country-by-country reporting.
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Revenues Tangible
from intra-assets
group other than
Revenues transactions cash and Govern-
Average from third-with other Income tax Income taxes cash ment
number ofparty tax Result accrued \u2013paid on a Retained equiva-grants
(in millions of EUR)FTEssales 1jurisdictions 2before taxcurrent yearcash basisearningslents 3received
2023
KBC core countries
Belgium14 1846 101 7531 889-338-30312 2542 385 0
Czech Republic10 1892 215-732 890-65-522 044 522 0
Slovakia 3 011 408-162 134-25 1-104 178 0
Hungary3 810 994-79 336-54-39 929 164 0
Bulgaria6 519 715-1 321-34-33 146 201 0
Other countries
China 34 1 0 0 0 0 0 2 0
Germany 22 2 0 2-3-3 0 0 0
France 53 6-7 1 0 0 1 0 0
United Kingdom 38 29 24 18 13 13 547 0 0
Hong Kong 33 1 0 1 0 0 0 2 0
Ireland 560 619 180 515-14-13-1 598 0 0
Italy 7 0 0 0 0 0 0 1 0
Luxembourg 38 117 25 58-6-2 86 156 0
The Netherlands 27 6 0 9-3-2 2 38 0
Romania 0 4 0 4 0 0 24 32 0
Singapore 40 2 0 1 0 2 0 1 0
USA 45 3 0 1-2-2 0 18 0
Total38 60911 224 04 179-532-43314 3323 702 0
2022
KBC core countries
Belgium13 9595 8176011 986-261-22911 6072 260 0
Czech Republic10 1662 028-554785-157-1281 617 548 0
Slovakia 3 241410 4 119-25-18-203 185 0
Hungary3 685848-34 221-40 5 662 153 0
Bulgaria5 482504-10 166-18-17-107 209 0
Other countries
China 35 1 0 0-1 0 0-3 0
Germany 22 1 0 0-1-1 0 0 0
France 56 5-2 9-2-2 1 0 0
United Kingdom 39 17 8 16 17 17 528-1 0
Hong Kong 36 1 0 1 0 0 0 0 0
Ireland1 069 341 107 130-9-9-1 665 18 0
Italy 7 0 0 0 0 0 0 0 0
Luxembourg 39 47-120 48-27 7 162 137 0
The Netherlands 25 4 0 1 0 0 5 40 0
Romania 0 3 0 3 0 0 20 33 0
Singapore 43 2 0 1 0 0 0 0 0
USA 43 4 0 2 0 0 0-20 0
Total37 94610 03503 488-525-37612 6263 5600
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Countries with zero FTEs and whose figures are below 0.5 million euros (i.e. rounded to zero in the table) have been excluded.
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1 Corresponds to \u2018Total income\u2019 in the income statement.
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2 If this column contains a positive figure for a particular jurisdiction, it means that all group entities in that jurisdiction combined had more intra-group income than intra-group expenses
\n
compared with other tax jurisdictions. If the figure is negative, it means that all group entities in this jurisdiction combined had less intra-group income than intra-group expenses arising
\n
compared with other tax jurisdictions.
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3 Corresponds to \u2018Property and equipment and investment property\u2019 in the balance sheet.
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Note 5.2: Tax assets and tax liabilities
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(in millions of EUR)31-12-202331-12-2022
CURRENT TAXES
Current tax assets176174
Current tax liabilities99150
DEFERRED TAXES351689
Deferred tax assets by type of temporary difference1 1341 568
Employee benefits8578
Losses carried forward103186
Tangible and intangible fixed assets8077
Provisions for risks and charges1949
Impairment for losses on loans and advances207219
Financial instruments at fair value through profit or loss and fair value hedges92142
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations445705
Insurance contract liabilities3621
Other, incl. reinsurance contracts6890
Deferred tax liabilities by type of temporary difference784879
Employee benefits9599
Losses carried forward00
Tangible and intangible fixed assets4340
Provisions for risks and charges99
Impairment for losses on loans and advances33
Financial instruments at fair value through profit or loss and fair value hedges76129
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations4150
Insurance contract liabilities467516
Other, incl. reinsurance contracts5032
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets7241 001
Deferred tax liabilities373312
Unused tax losses and unused tax credits117151
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag750": { "value": "\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Revenues Tangible
from intra-assets
group other than
Revenues transactions cash and Govern-
Average from third-with other Income tax Income taxes cash ment
number ofparty tax Result accrued \u2013paid on a Retained equiva-grants
(in millions of EUR)FTEssales 1jurisdictions 2before taxcurrent yearcash basisearningslents 3received
2023
KBC core countries
Belgium14 1846 101 7531 889-338-30312 2542 385 0
Czech Republic10 1892 215-732 890-65-522 044 522 0
Slovakia 3 011 408-162 134-25 1-104 178 0
Hungary3 810 994-79 336-54-39 929 164 0
Bulgaria6 519 715-1 321-34-33 146 201 0
Other countries
China 34 1 0 0 0 0 0 2 0
Germany 22 2 0 2-3-3 0 0 0
France 53 6-7 1 0 0 1 0 0
United Kingdom 38 29 24 18 13 13 547 0 0
Hong Kong 33 1 0 1 0 0 0 2 0
Ireland 560 619 180 515-14-13-1 598 0 0
Italy 7 0 0 0 0 0 0 1 0
Luxembourg 38 117 25 58-6-2 86 156 0
The Netherlands 27 6 0 9-3-2 2 38 0
Romania 0 4 0 4 0 0 24 32 0
Singapore 40 2 0 1 0 2 0 1 0
USA 45 3 0 1-2-2 0 18 0
Total38 60911 224 04 179-532-43314 3323 702 0
2022
KBC core countries
Belgium13 9595 8176011 986-261-22911 6072 260 0
Czech Republic10 1662 028-554785-157-1281 617 548 0
Slovakia 3 241410 4 119-25-18-203 185 0
Hungary3 685848-34 221-40 5 662 153 0
Bulgaria5 482504-10 166-18-17-107 209 0
Other countries
China 35 1 0 0-1 0 0-3 0
Germany 22 1 0 0-1-1 0 0 0
France 56 5-2 9-2-2 1 0 0
United Kingdom 39 17 8 16 17 17 528-1 0
Hong Kong 36 1 0 1 0 0 0 0 0
Ireland1 069 341 107 130-9-9-1 665 18 0
Italy 7 0 0 0 0 0 0 0 0
Luxembourg 39 47-120 48-27 7 162 137 0
The Netherlands 25 4 0 1 0 0 5 40 0
Romania 0 3 0 3 0 0 20 33 0
Singapore 43 2 0 1 0 0 0 0 0
USA 43 4 0 2 0 0 0-20 0
Total37 94610 03503 488-525-37612 6263 5600
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Note 3.12: Earnings per share
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
Result after tax, attributable to equity holders of the parent3 4022 818
Coupon on AT1 instruments-64-50
Net result used to determine basic earnings per share3 3382 768
Weighted average number of ordinary shares outstanding (millions of units)415417
Basic earnings per share (EUR)8.046.64
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\u2022 Diluted earnings per share are currently almost the same as basic earnings per share.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
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the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
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associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.3: Maximum credit exposure and offsetting
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
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\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
\n
and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
\n
euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
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Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
\n
amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
\n
\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
\n
financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
\n
financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
\n
were traded on (central) clearing houses.
\n\n
\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
\n
received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
\n
the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt.
\n

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which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
\n
we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
\n
prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
\n
impact of different interest rate scenarios on its net interest income.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
\n
the statutory auditor.
\n
\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
\n
sheet, whereas the table below focuses on some parts of the balance sheet.
\n
\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
\n
which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
\n
total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
\n
consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
\n
need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
\n
appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
\n
assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
\n
consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
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Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
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(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
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liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
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Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
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generated by valuation models are challenged by a team set up specifically for this purpose.
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\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
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discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
\n
margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
\n
value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
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by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
\n
equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
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euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
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reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
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(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
\n
year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
\n
the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
\n
is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
\n
prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
\n
are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
\n
prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
\n
2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
\n
rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
\n
value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
\n
financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
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the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
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associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.2: Financial assets and liabilities, breakdown by portfolio and quality
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Note 4.2.1: Impaired financial assets
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
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customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
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to:
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\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
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\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
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due primarily to:
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\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
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indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
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billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
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Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
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with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
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loans and advances at amortised cost in \u2018Stage 1\u2019.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
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\u2018Stage 1\u2019:
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\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
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offset by a decline in companies), and related primarily to net investments.
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\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
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\u25e6 Derecognised financial assets.
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\u25e6 Partly offset by other changes (see Note 3.9).
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At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
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respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
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amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
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(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
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in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
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accounting policies at KBC Bank Bulgaria for determining impairment.
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For information on other changes, see Note 3.9.
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\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
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audited this section).
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\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
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modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
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modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
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2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
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(see Note 3.9).
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\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
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to enforcement activities; the corresponding figure in 2022 was 80 million euros.
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Note 4.2.2: Impairment details for loans and advances at amortised cost
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Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
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1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
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2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
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3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
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before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
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\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
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on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
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securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
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\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
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(see Note 3.9).
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\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
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changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
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\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
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\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
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composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
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Note 4.3: Maximum credit exposure and offsetting
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Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
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\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
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credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
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commitments.
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\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
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and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
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euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
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composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
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\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
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relevant loans.
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Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
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* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
\n
amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
\n
\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
\n
financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
\n
financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
\n
were traded on (central) clearing houses.
\n\n
\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
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counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
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received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
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the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
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counterparties defaults, becomes insolvent or goes bankrupt.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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\u2022 In line with European Banking Authority guidelines, we conduct an outlier stress test on a quarterly basis by applying six
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different scenarios to the banking books (material currencies). The worst-case scenario is set off against tier-1 capital. For the
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banking book at KBC group level, this risk came to -3.91% of tier-1 capital at year-end 2023, well below the -15% tier-1 threshold
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which is monitored by the ECB. See also the \u2018How do we manage our risks?\u2019 section.
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\u2022 The table shows the changes in economic value of equity under six different interest rate scenarios. To test these six scenarios,
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we combine the shift in the yield curves with changes in maturities depending on clients\u2019 behaviour (e.g., interest-rate-driven
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prepayment behaviour) and use a run-off balance sheet where maturing items are not replaced. The bank also analyses the
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impact of different interest rate scenarios on its net interest income.
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Changes in the economic value
Supervisory shock scenarios (in millions of EUR, material currencies)*of equity, 4Q2023
1 Parallel up-606
2 Parallel down126
3 Steepener-131
4 Flattener-23
5 Short rates up-142
6 Short rates down72
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* Supervision of the underlying internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of
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the statutory auditor.
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\u2022 Note that the above stress test covers the banking book (full economic view), with compensating effects across the balance
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sheet, whereas the table below focuses on some parts of the balance sheet.
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\u2022 Taking into account i) KBC\u2019s large stock of high-quality liquid assets (approximately 101.5 billion euros on average in 2023),
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which consist of cash and bonds which can be repoed in the private market and at the central banks, ii) the fact that 56% of
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total customer deposits at KBC are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits
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consist of more stable retail and SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not
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need to be realised for liquidity purposes and are therefore irrelevant from a capital perspective.
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\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has
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appointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial
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assets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which
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consists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group
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Parameter Review Policy. The GVC meets at least twice a quarter to approve significant changes in valuation methods
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(including, but not limited to, models, market data and inputs) or deviations from group policies for financial assets and
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liabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle
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Office. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values
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generated by valuation models are challenged by a team set up specifically for this purpose.
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\u2022 The fair value of mortgage and term loans not measured at fair value in the balance sheet (see table) is calculated by
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discounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of
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margins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair
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value of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated
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by discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be
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equal to their carrying value.
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\u2022 As a result of the first-time adoption of IFRS 9 on 1 January 2018, debt instruments with a total carrying value of 15 060 million
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euros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this
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reclassification, changes in fair value (before tax) totalling 35 million euros were not recorded in the revaluation reserve in 2023
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(-566 million euros in 2022). The fair value of this reclassified portfolio (after redemptions) amounted to 2 808 million euros at
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year-end 2023 (4 668 million euros at year-end 2022). See also Note 5.6.9 regarding the first-time adoption of IFRS 17.
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost was caused by
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the substantial interest rate hikes in 2022, partly offset by the fall in interest rates in 2023. As a hold-to-collect business model
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is applied on the assets side, interim changes in fair value are less relevant.
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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet costcost
Carrying
(in millions of EUR)value Fair valueCarrying value Fair value
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)28 13528 100\u2013\u2013
Loans and advances to customers (incl. reverse repos)182 921175 381\u2013\u2013
Debt securities51 37248 976\u2013\u2013
Other1 1961 196\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-2 402\u2013\u2013\u2013
Total261 223253 653\u2013\u2013
Level 1\u201345 992\u2013\u2013
Level 2\u201331 953\u2013\u2013
Level 3\u2013175 708\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201318 27218 142
Deposits from customers and debt securities (incl. repos)\u2013\u2013260 028259 713
Liabilities under investment contracts\u2013\u20132929
Other\u2013\u20132 5462 533
Total\u2013\u2013280 874280 417
Level 1\u2013\u2013\u2013 119
Level 2\u2013\u2013\u201399 879
Level 3\u2013\u2013\u2013180 418
31-12-2022
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos)24 25824 211\u2013\u2013
Loans and advances to customers (incl. reverse repos)177 596163 972\u2013\u2013
Debt securities48 35643 611\u2013\u2013
Other1 5611 561\u2013\u2013
Adjustment for fair value hedges for a portfolio of interest rate risk-4 335---
Total247 435233 355\u2013\u2013
Level 1\u201340 671\u2013\u2013
Level 2\u201331 336\u2013\u2013
Level 3\u2013161 349\u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013\u201335 67135 207
Deposits from customers and debt securities (incl. repos)\u2013\u2013251 735250 485
Liabilities under investment contracts\u2013\u20133030
Other\u2013\u20132 4482 448
Total\u2013\u2013289 885288 170
Level 1\u2013\u2013\u201347
Level 2\u2013\u2013\u2013111 124
Level 3\u2013\u2013\u2013176 999
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag756": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag757": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
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the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
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associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
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recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
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recorded under \u2018Designated at fair value\u2019 (see accounting policies).
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\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
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target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
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the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
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instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
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In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
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(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
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loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
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any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
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www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
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environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
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objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
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provide to projects with a positive social impact.
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\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
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\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
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deposits.
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
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went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
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\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
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the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
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transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
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risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
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financial liability is recognised equalling the cash received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
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\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
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certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
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the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
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we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
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commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
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agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
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Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Mandato-
red at rily
fair measured
value at fair
through value
Meas-other through Desig-
ured at compre-profit or nated at
amor-hensive loss Held for fair Hedging
tised income (MFVPL) trading value1 deriva-
(in millions of EUR) cost (AC) (FVOCI) excl. HFT (HFT) (FVO) tivesTotal
FINANCIAL ASSETS, 31-12-2023
Loans and advances to credit institutions and investment firms (excl. reverse 2 779 0 0 1 0 0 2 779
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 222
more than three months
Loans and advances to customers (excluding reverse repos) 182 777 0 836 0 0 0 183 613
Trade receivables 2 680 0 0 0 0 0 2 680
Consumer credit 6 604 0 608 0 0 0 7 211
Mortgage loans 75 254 0 228 0 0 0 75 482
Term loans 85 694 0 0 0 0 0 85 694
Finance lease 7 197 0 0 0 0 0 7 197
Current account advances 4 626 0 0 0 0 0 4 626
Other 723 0 0 0 0 0 723
Reverse repos2 25 501 0 0 0 0 0 25 501
with credit institutions and investment firms 25 356 0 0 0 0 0 25 356
with customers 144 0 0 0 0 0 144
Equity instruments 0 1 695 14 570 0 0 2 279
Investment contracts (insurance)3 0 0 14 348 0 0 0 14 348
Debt securities issued by 51 372 16 892 14 3 138 0 0 71 417
Public bodies 43 337 13 206 0 2 966 0 0 59 509
Credit institutions and investment firms 5 658 1 826 0 12 0 0 7 496
Corporates 2 377 1 861 14 160 0 0 4 412
Derivatives 0 0 0 4 618 0 295 4 914
Other4 1 196 0 0 0 0 0 1 196
Total 263 625 18 587 15 212 8 327 0 295 306 047
FINANCIAL ASSETS, 31-12-2022
Loans and advances to credit institutions and investment firms (excl. reverse 4 240 0 13 1 0 0 4 254
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 1 237
more than three months
Loans and advances to customers (excl. reverse repos) 177 427 0 625 0 0 0 178 053
Trade receivables 2 818 0 0 0 0 0 2 818
Consumer credit 6 222 0 430 0 0 0 6 652
Mortgage loans 73 465 0 196 0 0 0 73 660
Term loans 82 894 0 0 0 0 0 82 894
Finance lease 6 368 0 0 0 0 0 6 368
Current account advances 4 886 0 0 0 0 0 4 886
Other 774 0 0 0 0 0 774
Reverse repos2 20 186 0 0 33 0 0 20 219
with credit institutions and investment firms 20 018 0 0 33 0 0 20 050
with customers 168 0 0 0 0 0 168
Equity instruments 0 1 552 13 430 0 0 1 994
Investment contracts (insurance)3 0 0 12 772 0 0 0 12 772
Debt securities issued by 48 356 15 065 17 1 728 0 0 65 166
Public bodies 40 750 11 225 0 1 667 0 0 53 642
Credit institutions and investment firms 5 022 1 743 0 9 0 0 6 774
Corporates 2 583 2 097 17 53 0 0 4 750
Derivatives 0 0 0 6 279 0 542 6 821
Other4 1 561 0 0 0 0 0 1 561
Total 251 770 16 617 13 440 8 471 0 542 290 840
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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
1 The carrying value comes close to the maximum credit exposure.
\n
2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
\n
3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
\n
included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
\n
4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
\n
5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
\n
and partly obtained through reverse repo transactions.
\n
6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n

\n\n
\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are usually
\n
recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they are
\n
recorded under \u2018Designated at fair value\u2019 (see accounting policies).
\n
\u2022 \u2018Loans and advances to customers at amortised cost\u2019 also includes loans whose interest payments are linked to an ESG
\n
target of the client. The contractual cashflows of these loans are deemed to be solely payments of principal and interest on
\n
the principal amount (SPPI), since the variability in interest payments resulting from the ESG component reflects the
\n
instrument\u2019s credit risk. This item also includes loans provided to clients for the funding of investments linked to ESG-targets.
\n
In 2023, \u2018Non-convertible bonds\u2019 also includes two green bonds (for 500 and 750 million euros each) and two social bonds
\n
(for 750 and 750 million euros each), which have been recognised at amortised cost. The purpose of these bonds is to fund
\n
loans to our clients intended for green or social projects; however, the cashflows of these bonds themselves are not linked to
\n
any ESG targets. More information on our Green Bond Framework and our Social Bond Framework is available at
\n
www.kbc.com. We also refer to our Sustainability Report (also available at www.kbc.com), in the \u2018Our commitment to the
\n
environment\u2019 section, which lists the characteristics of the loan and bond portfolios that contribute to environmental
\n
objectives. The \u2018Our commitment concerning our social impact\u2019 section takes a closer look at the funding and advice we
\n
provide to projects with a positive social impact.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The drop in demand deposits and savings accounts partly results from the outflow to the State Note in Belgium and to time
\n
deposits.
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include funding obtained from the ECB\u2019s TLTRO programme (which
\n
went down from 15.4 billion euros at year-end 2022 to 2.6 billion euros at year-end 2023).
\n
\u2022 Transferred financial assets that continue to be recognised in their entirety: KBC regularly lends and/or sells securities with
\n
the commitment to buy them back at a later date (repo transactions). Securities lent or sold with such a commitment are
\n
transferred to the counterparty, and, in exchange, KBC receives cash or other financial assets. However, KBC retains the main
\n
risks and income relating to these securities, and, therefore, continues to recognise them on its balance sheet. In addition, a
\n
financial liability is recognised equalling the cash received.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-202331-12-2022
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out19 06517 425
Held for trading 622960
Fair value through OCI1 172860
Amortised cost17 27115 605
Associated financial liability3 21410 534
Held for trading 126689
Fair value through OCI183609
Amortised cost2 9059 236
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 KBC has more transferred financial assets on its balance sheet than repo transactions, due to the fact that the cash legs of
\n
certain repo transactions are offset against reverse repo transactions if they are carried out with the same counterparty, in
\n
the same currency and with the same maturity date. Moreover, there is a legally enforceable right, and an intention, to settle
\n
the transactions on a net basis or to realise the financial asset and settle the financial liability simultaneously.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. We report on estimated greenhouse gas emissions
\n
associated with lending and other activities and have defined objectives for reducing the greenhouse gas intensity of loans
\n
we have provided to, among others, electricity producers and the real estate sector, mortgage loans and loans provided for
\n
commercial residential real estate, as well as loans provided to the automotive industry and car leasing (see Note 6.2), the
\n
agricultural sector, and cement and steel producers. See \u2018Focus on the climate and the environment\u2019 in the \u2018Report of the
\n
Board of Directors\u2019 section for a more detailed explanation (the statutory auditor has not audited this section).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n\n

\n\n
Note 5.6: Insurance \u2013 balance sheet
\n\n

\n
Note 5.6.1: Breakdown of (re)insurance contract assets and liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)20232022
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 00\u2014\u201400\u2013\u2013
Insurance contract liabilities 13 8625512 87892813 4445212 600792
LRC (liability for remaining coverage)13 674212 76291013 268212 491775
Unit-linked7980\u20147986750\u2013675
Non-unit-linked12 651212 650\u201412 383212 3810
Hybrid22501121122100110100
Accepted reinsurance00000000
LIC (liability for incurred claims)18853116181765010917
Unit-linked130\u201413120\u201312
Non-unit-linked1535399\u20141425092\u2013
Hybrid210174220175
Accepted reinsurance00000000
Assets for acquisition cost00000000
Non-life
Reinsurance assets6464\u2014\u20145555\u2013\u2013
Insurance contract liabilities2 9222 716206\u20142 7142 462252\u2013
LRC (liability for remaining coverage)701512190\u2014676439238\u2013
Personal insurance20516190\u201425316238\u2013
Motor Third-Party Liability (MTPL)160160\u2014\u2014145145\u2013\u2013
Liabilities other than MTPL2525\u2014\u20142424\u2013\u2013
Casco9696\u2014\u20148181\u2013\u2013
Property other than casco216216\u2014\u2014173173\u2013\u2013
Accepted reinsurance000\u2014-1-10\u2013
LIC (liability for incurred claims)2 2202 20416\u20142 0382 02414\u2013
Personal insurance61059416\u201454453014\u2013
Motor Third-Party Liability (MTPL)863863\u2014\u2014771771\u2013\u2013
Liabilities other than MTPL357357\u2014\u2014358358\u2013\u2013
Casco5353\u2014\u20144242\u2013\u2013
Property other than casco 319319\u2014\u2014306306\u2013\u2013
Accepted reinsurance18180\u201417170\u2013
Assets for acquisition cost000\u2014000\u2013
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Insurance contract liabilities relate to insurance contracts and investment contracts with a discretionary participation feature
\n
(DPF). Liabilities under investment contracts without DPF are measured at fair value. They concern unit-linked contracts, which
\n
are recognised under financial liabilities (see Note 4.1).
\n\n
\u2022 LRC (except PAA) is calculated using various assumptions. Judgement is required when making these assumptions and they
\n
are based on various internal and external sources of information. These liabilities are generally calculated using assumptions
\n
that were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The key
\n
assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on standard
\n
mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions reflect the projected costs of maintaining and servicing in-force policies and associated
\n
overhead expenses which are considered directly attributable. Expenses are considered directly attributable if they are
\n
incurred as a consequence of performing insurance activities for in-force contracts.
\n
- Assumptions may vary depending on the type of insurance, the generation of contracts (mainly the time when the contract
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these assumptions
\n
for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling costs,
\n
and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors such as
\n
court awards, le
\n
g
\n
islation and discountin
\n
g
\n
.
\n

\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n

\n\n\n

\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
\u2022 For contracts providing multiple services, i.e. insurance coverage, investment return services and investment management
\n
services, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on the
\n
individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate level of
\n
service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits provided
\n
for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting period.
\n
\u2022 Coverage units have a positive value and are floored to zero. In case of zero coverage units in a given period, no CSM is
\n
allocated to P&L as no services have been provided in the period. This is possible, for instance, where contracts provide for
\n
\u2018waiting periods\u2019. In such cases, the contract has been signed by the policyholder but there is a mandatory waiting period for
\n
the client to be able to benefit from insurance coverage.
\n
\u2022 Defining IFRS 17 portfolios is a local decision, made by each insurance entity of KBC Group. It is country-specific, driven by the
\n
local product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown
\n
by product.
\n
\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance
\n
risk, from the unit-linked to the non-unit-linked component and vice versa.
\n
\u2022 Non-life LRC BBA (238 million euros in 2022, 190 million euros in 2023) represents the LRC health insurance (as part of personal
\n
insurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for
\n
personal insurance (530 million euros in 2022, 594 million euros in 2023) represents the incurred claims under personal insurance
\n
with regard to \u2018workmen\u2019s compensation\u2019 insurance, which are typically settled over a long period.
\n
\u2022 Most reinsurance programmes protect against the impact of exceptionally large loss events or accumulation of losses.
\n
Therefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the
\n
movements in reinsurance contract assets are limited.
\n
\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these
\n
bottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one
\n
with volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other liabilities for which
\n
bottom-up curves are used).
\n
Yield curve used to discount cashflows not varying based on underlying items; bottom-up method
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CurrencyIlliquidity premiumPortfolio duration
1 year5 years10 years20 years
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment2.92%2.29%2.74%2.13%
CZKwith volatility adjustment4.83%3.19%3.70%3.98%
without volatility adjustment4.67%3.03%3.54%3.82%
HUFwith volatility adjustment5.55%5.25%6.29%5.49%
without volatility adjustment5.44%5.14%6.18%5.38%
BGNwith volatility adjustment3.16%2.50%3.00%2.43%
without volatility adjustment3.16%2.50%3.00%2.43%
2022
EURwith volatility adjustment4.77%3.26%3.36%1.87%
without volatility adjustment4.56%3.05%3.15%1.69%
CZKwith volatility adjustment7.92%4.46%4.51%6.04%
without volatility adjustment7.61%4.16%4.21%5.70%
HUFwith volatility adjustment13.96%7.21%8.52%9.40%
without volatility adjustment13.77%7.04%8.34%9.22%
BGNwith volatility adjustment5.27%3.57%3.67%1.97%
without volatility adjustment5.27%3.57%3.67%1.97%
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Note 5.6.2: Movements in Life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\u2022 When transitioning from IFRS 4 to IFRS 17, KBC applied the Full Retrospective Approach (FRA) for recent years. Applying the FRA
\n
for non-recent years is impracticable due to either a lack of historical data (data and hypotheses) or high costs associated
\n
with making information from the past available for FRA transition calculations. Where the FRA is impracticable, the Fair Value
\n
Approach (FVA) was predominantly used to determine the CSM on the transition date. The Modified Retrospective Approach
\n
(MRA) is rarely applied as this transition approach is overly complex and the costs do not outweigh the benefits. KBC calculates
\n
a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently adjusts a few assumptions or parameters.
\n
The adjustments relate to the inclusion in the IFRS 13 fair value of total expenses, i.e. including non-directly attributable
\n
expenses, and to the inclusion of a risk premium that covers not only non-financial risk, but also system and integration
\n
expenses and capital funding costs. All past years are combined into a single cohort for the FVA transition calculations. The
\n
FVA CSM ensues from cost and risk margin differences under IFRS 17 and IFRS 13 measurement approaches. The OCI amount
\n
on the transition date under the FVA is determined in accordance with the transition exemptions provided in IFRS 17.
\n
\u2022 Movement in insurance liabilities in 2023:
\n
- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised as
\n
KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income and
\n
expense between P&L and OCI.
\n
- The movement in the investment component of 1 284 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 Movement in insurance liabilities 2022:
\n
- Due to the increase in market interest rates during 2022, a gain in OCI of 2 614 million euros before tax is recognised as KBC
\n
made the accounting policy choice for all portfolios within the group to disaggregate IFIE between P&L and OCI. The Life
\n
insurance service result was positively impacted by a net reversal of loss component for an amount of 67 million euros.
\n
- The movement in the investment component of 1 606 million euros from LRC to LIC indicates the amounts of contracts coming
\n
at maturity or lapsed.
\n
\u2022 On transitioning to IFRS 17, KBC applied mainly the fair value approach. Therefore, the amortised acquisition costs are low as
\n
they are not estimated under the fair value approach (i.e. the prospective approach).
\n
\u2022 The Life insurance contracts are typically long-term contracts and are therefore measured according to the BBA or VFA. The
\n
latter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold
\n
contracts mandatorily contain insurance risk cover.
\n
\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, which are repayable under all
\n
circumstances and as such include an investment component. For defining the investment component, an investigation based
\n
on the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life
\n
insurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered
\n
an investment component. Any associated surrender fees resulting from surrender are considered insurance components.
\n

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Note 5.6.3: Movements in Non-life insurance contract liabilities
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
\n\n\n\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\u2022 In Non-life, KBC applies mostly the PAA, as the coverage period is 1 year or less.
\n
\u2022 The cost of outstanding claims is based on the past claims development experience to project future claims development.
\n
These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling
\n
costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
\n
are mainly analysed per accident year. Large claims are separately addressed.
\n
\u2022 Estimates of salvage recoveries and subrogation reimbursement are considered in the measurement of the ultimate claim
\n
costs.
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\u2022 No asset for insurance acquisition cashflows is currently recognised.
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Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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Present value Risk
of future adjustment Total insurance
cashflows (incl. (incl. LIC)contract
(in millions of EUR)LIC)Contractual service marginliabilities
Insurance
contracts that Insurance
existed at the contracts that
transition date, existed at the
modified transition date, Other
retrospective fair value insurance
approach approach contracts
2023
Opening balance11 378112451 37748013 393
Insurance service result-39047-18198-139
Changes that relate to future service-3995641202245
New business-16117\u2013\u20131506
Changes in estimates reflected in the CSM -23839412074-1
Changes in estimates that result in onerous contract 00\u2013\u2013\u20130
losses and reversals
Changes that relate to current service38-8-5-113-26-113
CSM recognised in P&L0\u2013-5-113-26-143
Changes in the risk adjustment (expected)0-8\u2013\u2013\u2013-8
Experience adjustments38\u2013\u2013\u2013\u201338
Changes to liabilities for incurred claims related to past -29-2\u2013\u2013\u2013-30
service
Insurance finance income and expense809-7197818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income41840016205679
Total cashflows-252\u2013\u2013\u2013\u2013-252
Premiums received1 371\u2013\u2013\u2013\u20131 371
Claims paid-1 404\u2013\u2013\u2013\u2013-1 404
Costs other than claims paid-92\u2013\u2013\u2013\u2013-92
Acquisition costs paid-126\u2013\u2013\u2013\u2013-126
Other changes-7-12-6-1-14
Closing balance11 538152471 38768313 807
2022
Opening balance15 4261105598121516 787
Insurance service result-8314-7382263-189
Changes that relate to future service-84213-2476288-67
New business-12614\u2013\u201313523
Changes in estimates reflected in the CSM-6260-24761520
Changes in estimates that result in onerous contract -900\u2013\u2013\u2013-90
losses and reversals
Changes that relate to current service33-8-5-94-24-98
CSM recognised in P&L\u2013\u2013-5-94-24-123
Changes in the risk adjustment (expected)\u2013-8\u2013\u2013\u2013-8
Experience adjustments33\u2013\u2013\u2013\u201333
Changes to liabilities for incurred claims related to past -23-2\u2013\u2013\u2013-25
service
Insurance finance income and expense-2 519-2161-2 513
In P&L83216192
In OCI-2 602-4\u2013\u2013\u2013-2 606
Total changes in comprehensive income-3 3501-7389264-2 702
Total cashflows-700\u2013\u2013\u2013\u2013-700
Premiums received1 231\u2013\u2013\u2013\u20131 231
Claims paid-1 742\u2013\u2013\u2013\u2013-1 742
Costs other than claims paid-84\u2013\u2013\u2013\u2013-84
Acquisition costs paid-105\u2013\u2013\u2013\u2013-105
Other changes21-3718
Closing balance11 378112451 37748013 393
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
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\u25e6 Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by the
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insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity of the
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benefits provided to the policyholder under a contract and its expected coverage period.
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\u25e6 Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected to be
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provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current period.
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\u2022 Main movements in 2023: there were no material exceptional movements.
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\u2022 Main movements in 2022: the net movement in the loss component amounted to 67 million euros and was mainly explained by
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(i) new business in the year 2022 for which a loss component of -24 million euros was recognised and (ii) a reversal of loss
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component of 90 million euros due to increasing interest rates, resulting in a higher margin expected to be earned on future
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premiums. The increasing interest rates were also the main reason for the increase of 626 million euros in the CSM, as more
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margin was expected to be earned on future premiums.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value Risk
of future adjustment
cashflows (incl. (incl. LIC)Total insurance
(in millions of EUR)LIC)Contractual service margincontract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2023
Opening balance17759367252
Insurance service result1116-417-7
Changes that relate to future service919-38100
New business-181\u2013170
Changes in estimates reflected in the CSM2717-38-70
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service2-3-3-4-7
CSM recognised in P&L\u2013\u2013-3-4-6
Changes in the risk adjustment (expected)\u2013-3\u2013\u2013-3
Experience adjustments2\u2013\u2013\u20132
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-29-1901-48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income-17-4-417-54
Total cashflows8\u2013\u2013\u20138
Premiums received43\u2013\u2013\u201343
Claims paid-24\u2013\u2013\u2013-24
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-7\u2013\u2013\u2013-7
Other changes00000
Closing balance8715274206
2022
Opening balance1361179636386
Insurance service result-36-3-331-11
Changes that relate to future service-3612340
New business-181\u2013170
Changes in estimates reflected in the CSM-1902170
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service0-4-5-3-11
CSM recognised in P&L\u2013\u2013-5-3-8
Changes in the risk adjustment (expected)\u2013-4\u2013\u2013-4
Experience adjustments0\u2013\u2013\u20130
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-93-3900-132
In P&L-1000-2
In OCI-92-39\u2013\u2013-131
Total changes in comprehensive income-129-42-330-144
Total cashflows9\u2013\u2013\u20139
Premiums received39\u2013\u2013\u201339
Claims paid-20\u2013\u2013\u2013-20
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-6\u2013\u2013\u2013-6
Other changes00000
Closing balance17759367252
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\u2022 In Non-life, the BBA is applied to \u2018individual health insurance\u2019.
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\u2022 The decline recognised in insurance finance income and expense through OCI of 48 million euros in 2023 is accounted for by
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the increase in the discount curve in the long term (more than 20 years). The decline of 131 million euros in 2022 is attributable
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to the sharp increase in the discount curve during the first half of the year. A typical feature of the hospitalisation portfolio is
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that interest rate movements have a greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums
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are levelled (constant \u2018cash in\u2019 during the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019
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more towards the end of the contract).
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Note 5.6.6: New business (BBA/VFA)
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(Re)insurance (Re)insurance
(in millions of EUR)contracts issuedcontracts acquiredTotal
Not onerousOnerousNot onerousOnerous
2023
Estimates of present value of cash outflows1 194212001 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows-1 378-20700-1 585
Risk adjustment for non-financial risk1620018
Contractual service margin166-00166
Increase in insurance contract liabilities: loss component\u20137\u201307
2022
Estimates of present value of cash outflows781440001 221
Expected claims657375001 032
Expected other insurance service expenses41430084
Insurance acquisition cashflows832200105
Estimates of present value of cash inflows-946-41900-1 365
Risk adjustment for non-financial risk1230015
Contractual service margin152\u20130\u2013152
Increase in insurance contract liabilities: loss component\u201324\u2013024
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\u2022 In 2022, the low interest-rate environment at the beginning of the year mainly explained the sale of onerous business. Increasing
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interest rates improved the overall profitability of new business (insurance and the financial margin) during the year.
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Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (BBA/VFA)
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CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR)1st year2nd year3rd year4th year5th year6-10th year+10th year
2023
Life149142135129122529973
Non-life666652451
2022
Life123118113109105471928
Non-life887773062
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\u2022 The table shows the future CSM recognition for the next 25 years.
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Note 5.6.8: Fair value of assets backing insurance and investment contracts
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Life: of which Life
direct
participation
(in millions of EUR)Life(VFA)Non-lifeNon-technicalTotal
2023
Total (underlying) assets27 9309284 1521 68633 769
At amortised cost1 94902 9268825 757
At FVOCI11 490151 15859013 238
Debt securities 10 4411593338611 759
Equity instruments1 05002252041 479
At MFVPL (excl. derivatives) 14 3649130814 372
Instruments backing unit-linked contracts14 348912\u2013\u201314 348
Other1610816
At FVO00000
Property and equipment and investment property127068207401
2022
Total (underlying) assets26 2687863 8001 74831 816
At amortised cost1 94702 6259905 562
At FVOCI11 428121 10453113 064
Debt securities 10 5191289029211 700
Equity instruments91002152401 364
At MFVPL (excl. derivatives) 12 78177401812 798
Instruments backing unit-linked contracts12 772774\u2013\u201312 772
Other9001826
At FVO00000
Property and equipment and investment property112071209392
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
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Note 5.6.9: Changes in accumulated OCI for FVOCI assets related to insurance contracts for which the fair value transition
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approach is used
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(in millions of EUR)20232022
OCI that may be recycled to P&L340-1 748
Net change in revaluation reserve (FVOCI debt instruments)340-1 748
Fair value adjustments before tax446-2 367
Deferred tax on fair value changes-108582
Transfer from reserve to net result237
Impairment20
Net gains/losses on disposal048
Deferred taxes-1-11
OCI that will not be recycled to P&L110-199
Net change in revaluation reserve (FVOCI equity instruments)110-199
Fair value adjustments before tax110-199
Deferred tax on fair value changes00
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\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while maintaining
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the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between covering
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financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently the years
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thereafter until the portfolio subject to the transition approach reaches maturity.
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However, following the first-time adoption of
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IFRS 17 a large part of the bond portfolio of KBC Insurance was transferred to FVOCI (see Note 1.6 for more information), resulting
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in a very limited imbalance in 2022 and 2023.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag761": { "value": "\n

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Measured
at
amortised Designated
costHeld for at fair value Hedging
(in millions of EUR)(AC)trading (HFT)(FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos)15 013 0 0 015 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos)258 051 811 359 0259 491
Demand deposits (incl. special deposits and other deposits)107 568 0 0 0107 568
Time deposits37 770 81 194 038 044
Savings accounts70 810 0 0 070 810
Subtotal deposits from customers (excl. repos)216 148 81 194 0216 423
Certificates of deposit16 840 0 6 016 846
Savings certificates 79 0 0 0 79
Non-convertible bonds22 294 01 045 023 339
Non-convertible subordinated liabilities2 690 0 114 02 804
Repos55 235 40 0 05 275
with credit institutions and investment firms3 259 40 0 03 298
with customers1 976 0 0 01 976
Liabilities under investment contracts3 29 013 432 013 461
Derivatives 05 501 0 4015 902
Short positions 01 428 0 01 428
In equity instruments 0 6 0 0 6
In debt securities 01 421 0 01 421
Other62 546 0 0 02 547
Total280 8747 05014 791 401303 116
FINANCIAL LIABILITIES, 31-12-2022
Deposits from credit institutions and investment firms (excl. repos)24 819 0 0 024 819
of which deposits from banks repayable on demand5085
Deposits from customers and debt securities (excl. repos)251 496 441 205 0252 746
Demand deposits (incl. special deposits and other deposits)125 030 0 0 0125 030
Time deposits22 280 44 73 022 397
Savings accounts76 979 0 0 076 979
Subtotal deposits from customers (excl. repos)224 290 44 73 0224 407
Certificates of deposit9 321 0 1 09 322
Savings certificates 104 0 0 0 104
Non-convertible bonds15 621 01 006 016 627
Non-convertible subordinated liabilities2 160 0 126 02 285
Repos511 091 7 0 011 097
with credit institutions and investment firms10 852 7 0 010 859
with customers 239 0 0 0 239
Liabilities under investment contracts3 30 011 996 012 026
Derivatives 08 038 0 5778 615
Short positions 01 007 0 01 007
In equity instruments 0 5 0 0 5
In debt securities 01 002 0 01 002
Other62 448 0 0 02 448
Total289 8859 09613 201 577312 759
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1 The carrying value comes close to the maximum credit exposure.
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2 The amount of the reverse repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out).
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3 The difference between \u2018Investment contracts (insurance)\u2019 and \u2018Liabilities under investment contracts\u2019 is accounted for by the presentation of non-unbundled investment contracts that are
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included under \u2018Investment contracts (insurance)\u2019 on the financial assets side, but are included under \u2018Insurance contract liabilities\u2019 on the liabilities side.
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4 Financial assets not included under \u2018Loans and advances to customers\u2019 as they are not directly related to commercial lending.
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5 The amount of the repos (before offsetting) is virtually identical to the amount of the underlying assets (that have been lent out), with the assets being partly reflected on the balance sheet
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and partly obtained through reverse repo transactions.
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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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1 Includes perpetual subordinated loans with fully discretionary, non-cumulative interest payments. The securities also have a loss absorption mechanism (i.e. a temporary write-down trigger
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should the common equity tier-1 ratio fall below 5.125%). Also see Note 5.10.
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2 Includes subordinated loans with a fixed maturity date where principal and interest payments cannot be cancelled in a going concern.
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Note 4.2.1: Impaired financial assets
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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* The carrying value after impairment in this note corresponds to the sum of the \u2018Loans and advances to credit institutions and investment firms (excl. reverse repos)\u2019, \u2018Loans and advances to
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customers (excl. reverse repos)\u2019 and \u2018Reverse repos\u2019 in Note 4.1 (in the \u2018Measured at amortised cost\u2019 column).
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Carrying value beforeCarrying value after
(in millions of EUR)impairmentImpairmentimpairment
31-12-2023
Financial assets at amortised cost: Loans and advances*213 531-2 474211 057
Stage 1 (12-month ECL)175 853-146175 708
Stage 2 (lifetime ECL)33 571-49033 081
Stage 3 (lifetime ECL)3 694-1 7501 944
Purchased or originated credit impaired assets (POCI) 412-88 324
Financial assets at amortised cost: Debt securities51 384-1251 372
Stage 1 (12-month ECL)51 300-651 294
Stage 2 (lifetime ECL) 80-4 76
Stage 3 (lifetime ECL) 5-2 3
Purchased or originated credit impaired assets (POCI) 0 0 0
Financial assets at fair value through OCI: Debt securities16 897-516 892
Stage 1 (12-month ECL)16 864-416 861
Stage 2 (lifetime ECL) 33-1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2022
Financial assets at amortised cost: Loans and advances*204 472-2 619 201 853
Stage 1 (12-month ECL)163 846-110163 735
Stage 2 (lifetime ECL)36 577-63535 941
Stage 3 (lifetime ECL)3 616-1 7961 820
Purchased or originated credit impaired assets (POCI)434-77357
Financial assets at amortised cost: Debt securities48 374-1848 356
Stage 1 (12-month ECL)48 220-748 213
Stage 2 (lifetime ECL)146-4141
Stage 3 (lifetime ECL)8-71
Purchased or originated credit impaired assets (POCI)000
Financial assets at fair value through OCI: Debt securities15 069-415 065
Stage 1 (12-month ECL)15 019-315 016
Stage 2 (lifetime ECL)50-249
Stage 3 (lifetime ECL)000
Purchased or originated credit impaired assets (POCI)000
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 9.1 billion euros in 2023, due primarily
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to:
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\u25e6 An organic net increase in the loan portfolio (mainly mortgage loans and term loans).
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\u25e6 An increase of the carrying value before impairment of the reverse repos to credit institutions and investment firms.
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\u2022 Carrying value (before impairment) of loans and advances at amortised cost in \u2018Stage 2\u2019: decrease of 3.0 billion euros in 2023,
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due primarily to:
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\u25e6 The update of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have
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indirect exposure to military conflicts, such as the one in Ukraine and/or are vulnerable to emerging risks (together 12.0
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billion euros at year-end 2023, compared to 14.2 billion euros at year-end 2022).
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Please note that the update of the migration of loans from \u2018Stage 1\u2019 to \u2018Stage 2\u2019 based on the collective approach, together
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with the organic growth in lending, resulted in a net increase of 12.0 billion euros of the carrying value before impairment of
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loans and advances at amortised cost in \u2018Stage 1\u2019.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: increase of 1.8 billion euros in 2023, almost entirely in
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\u2018Stage 1\u2019:
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\u25e6 85% of this increase concerns (issues by) public bodies and one fifth concerns credit institutions and investment firms (partly
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offset by a decline in companies), and related primarily to net investments.
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\u2022 Impairment: decrease of 0.2 billion euros in 2023, due to:
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\u25e6 Derecognised financial assets.
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\u25e6 Partly offset by other changes (see Note 3.9).
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At year-end 2022 and 2023, impairment for the former Raiffeisenbank Bulgaria included 106 million euros and 99 million euros,
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respectively, in loans and advances to customers, and 7 million euros and 0 million euros, respectively, in debt securities at
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amortised cost. These impairment valuations partly deviate from the methodology set out in the accounting policies
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(particularly as regards the forward-looking information, IFRS 9 models and criteria used to determine a significant increase
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in credit risk). The further integration of KBC Bank Bulgaria\u2019s loan portfolio in 2024 will also involve the alignment of the
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accounting policies at KBC Bank Bulgaria for determining impairment.
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For information on other changes, see Note 3.9.
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\u2022 See also climate-related and other ESG risks in the \u2018How do we manage our risks?\u2019 section (the statutory auditor has not
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audited this section).
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\u2022 In 2023, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 579 million euros have been subject to
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modifications in the past that did not result in derecognition. The gross carrying value of \u2018Stage 1\u2019 financial assets subject to
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modifications in the past that did not result in derecognition came to 1 001 million euros in 2023. The corresponding figures for
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2022 were 471 million euros and 1 088 million euros, respectively. Modification gains or losses are recognised under impairment
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(see Note 3.9).
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\u2022 In 2023, financial assets at amortised cost with a gross carrying value of 59 million euros were written off, but were still subject
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to enforcement activities; the corresponding figure in 2022 was 80 million euros.
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Note 4.2.2: Impairment details for loans and advances at amortised cost
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Subject to
lifetime ECL
Stage 1Stage 2Stage 3(purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR)12-month ECLlifetime ECLlifetime ECL impaired)Total
2023
Impairment on 1 January1106351 796772 619
Movements with an impact on results1 37-144 141 11 46
Transfer of financial assets
Stage 1 (12-month ECL)-12 86 41 0 115
Stage 2 (lifetime ECL) 14-125 95 0-16
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 17-34-1-18
New financial assets 2 60 22 7 0 89
Changes in risk parameters during the reporting period-10-98 76 15-17
Changes in the model or methodology 0 0 0 0 0
Derecognised financial assets 3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets 3-2-1-207-1-211
Changes in the scope of consolidation00000
Transfers under IFRS 500000
Other0019120
Impairment on 31 December1464901 750882 474
2022
Impairment on 1 January1045071 8481142 573
Movements with an impact on results1-696147-8230
Transfer of financial assets
Stage 1 (12-month ECL)-22158600197
Stage 2 (lifetime ECL)4-8395016
Stage 3 \u2018non-performing\u2019 (lifetime ECL)026-54-3-31
New financial assets 2404310093
Changes in risk parameters during the reporting period-16-2390-548
Changes in the model or methodology-13002
Derecognised financial assets 3-10-26-59-1-97
Other-1-2402
Movements without an impact on results1232-199-29-184
Derecognised financial assets 30-1-296-7-304
Changes in the scope of consolidation1432880133
Transfers under IFRS 500000
Other-219-21-13
Impairment on 31 December1106351 796772 619
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1 Amounts recovered in respect of loans that have already been written off are recycled to the income statement and recorded as \u2018Impairment on financial assets at amortised cost and at
\n
fair value through OCI\u2019. However, they have not been included in this table since they do not have any impact on impairment losses on the balance sheet.
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2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called.
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3 Derecognition without an impact on results occurs when the impairment adjustment has already been made upfront (for example, at the moment of the sale agreement (disposals) or
\n
before the write-off). Derecognition with an impact on results occurs when the impairment adjustment takes place at the same time (for instance, in the case of debt forgiveness).
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\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment
\n
on debt securities at amortised cost (from 18 million euros at year-end 2022 to 12 million euros at year-end 2023) and on debt
\n
securities at fair value through OCI (from 4 million euros at year-end 2022 to 5 million euros at year-end 2023) are very limited.
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\u2022 The change in impairment in 2023 relates mainly to derecognised financial assets and movements with an impact on results
\n
(see Note 3.9).
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\u2022 Just like last year, the vast majority of the trigger for staging is driven by a collective management assessment and relative
\n
changes in PD (see the multi-tier approach outlined in Note 1.2 under \u2018Significant increase in credit risk since initial recognition\u2019).
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\u2022 For information on provisions for commitments and financial guarantees, see Note 5.7.2.
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\u2022 For information regarding the impact of changes in impairment on the income statement, see Note 3.9.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
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Note 4.3: Maximum credit exposure and offsetting
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Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
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\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
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\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
\n
and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
\n
euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
\n
amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
\n
\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
\n
financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
\n
financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
\n
were traded on (central) clearing houses.
\n\n
\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
\n
received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
\n
the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag763": { "value": "\n

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Note 4.3: Maximum credit exposure and offsetting
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Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
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\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
\n
and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
\n
euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
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Net amounts of
Gross Gross amounts financial
amounts of of recognised instruments
recognised financial presented in
Financial instruments subject to offsetting, enforceable master financial instruments set the balance Amounts not set offNet
netting agreements and similar arrangementsinstrumentsoffsheetin the balance sheetamount
Financial Cash Securities
(in millions of EUR)instrumentscollateralcollateral
31-12-2023
FINANCIAL ASSETS
Derivatives24 07619 1634 9143 1621 123 6 623
Derivatives (excluding central clearing houses)4 821 04 8213 1621 123 6 531
Derivatives with central clearing houses*19 25519 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements38 91913 41825 501 120 025 361 19
Reverse repos38 91913 41825 501 120 025 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments0000000
Total62 99632 58130 4153 2821 12325 367 643
FINANCIAL LIABILITIES
Derivatives23 22317 3215 9023 166 809 5761 352
Derivatives (excluding central clearing houses)5 796 05 7963 166 809 5761 245
Derivatives with central clearing houses*17 42717 321 106 0 0 0 106
Repos, securities lending and similar arrangements18 69313 4185 275 120 05 112 43
Repos18 69313 4185 275 120 05 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments0000000
Total41 91630 73911 1773 286 8095 6881 394
31-12-2022
FINANCIAL ASSETS
Derivatives32 38025 5596 8214 4851 302 67 968
Derivatives (excluding central clearing houses)6 601 06 6014 4851 302 67 748
Derivatives with central clearing houses*25 77925 559 220 0 0 0 220
Reverse repos, securities borrowing and similar arrangements25 6945 47520 219 0 020 210 8
Reverse repos25 6945 47520 219 0 020 210 8
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total58 07431 03427 0404 4851 30220 277 976
FINANCIAL LIABILITIES
Derivatives31 46222 8468 6154 4921 095 4472 582
Derivatives (excluding central clearing houses)8 329 08 3294 4921 095 4472 296
Derivatives with central clearing houses*23 13222 846 286 0 0 0 286
Repos, securities lending and similar arrangements16 5735 47511 097 0 011 082 15
Repos16 5735 47511 097 0 011 082 15
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total48 03528 32219 7134 4921 09511 5292 597
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* For central clearing houses, the offsetting procedure refers to the amount of offsetting between derivatives and related cash collateral. Cash collateral with central clearing houses
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amounted to 1 842 million euros at year-end 2023 and 2 712 million euros at year-end 2022.
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\u2022 The criteria for offsetting are met if KBC currently has a legally enforceable right to set off the recognised financial assets and
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financial liabilities and intends either to settle the transactions on a net basis, or to realise the financial asset and settle the
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financial liability simultaneously. Financial assets and financial liabilities that are set off relate to financial instruments that
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were traded on (central) clearing houses.
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\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
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for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
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meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
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counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
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received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
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the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
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counterparties defaults, becomes insolvent or goes bankrupt.
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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
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\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
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offset by instruments that had reached maturity.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
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account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
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by 80 million euros, due primarily to purchases.
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- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
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positions, only partly offset by new purchases and changes in market inputs.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new transactions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
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euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
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and the sale of existing positions.
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\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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following:
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- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
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advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
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and instruments reaching maturity.
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- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
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The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
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in market inputs.
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- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
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positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
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changes in market inputs.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
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million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
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transactions.
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\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
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to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
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third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
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KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
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correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
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used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
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resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
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Note 4.8: Derivatives
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\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately
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25% are hedging derivatives.
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\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited
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open positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are
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economically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional
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amounts but also to result-neutral revaluations on a net basis.
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\u2022 A limited number of trading derivatives are ALM derivatives included in the banking book, which are used to hedge economic
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risk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only
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a limited number of the ALM derivatives for foreign currencies are included in hedge accounting.
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Note 4.8.1: Trading derivatives
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(in millions of EUR)31-12-202331-12-2022
Carrying valueNotional amounts*Carrying valueNotional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total4 6185 501598 880591 9236 2798 038567 205568 302
Interest rate contracts1 8212 252403 723395 1702 6423 678379 270377 754
of which interest rate swaps 1 6842 169394 018389 1842 4293 542368 144371 294
and futures
of which options 137 839 7055 986 214 13611 1266 460
Foreign exchange contracts2 3182 481180 438182 7193 1663 620174 787177 841
of which currency and interest 2 2462 409176 708176 8293 0813 509171 878172 361
rate swaps, forward foreign
exchange transactions and
futures
of which options 72 723 7305 890 85 1122 9095 480
Equity contracts 471 76114 38113 698 452 72012 81212 371
of which equity swaps 385 39311 31411 031 414 41010 55310 394
of which options 85 3683 0672 667 37 3112 2591 977
Credit contracts 0 0 0 0 0 0 0 0
of which credit default swaps 0 0 0 0 0 0 0 0
Commodity and other contracts 8 7 338 336 20 19 337 335
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* In this table, both legs of the derivatives are reported in the notional amounts.
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Note 4.8.2: Hedging derivatives
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31-12-2023
(in millions of EUR)Hedging instrumentHedged itemImpact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategyPurchasedSoldAssetsLiabilitieschanges)adjustments
Fair value micro hedge
Interest rate swaps31 86431 86497112267Debt securities held at AC6 547-300377
Currency and 00000Loans and advances at AC 601753
interest rate swaps
Debt securities held at FVOCI2 999-25124
Debt securities issued at AC21 285-560-774
Deposits at AC000
Total31 86431 86497112267Total-269-2-
Portfolio hedge of interest rate risk
Interest rate swaps143 932143 93293123-995Debt securities held at AC937-7115
Currency and 1 6180700-27Loans and advances at AC125 541-2 4731 841
interest rate options
Debt securities held at FVOCI8539
Debt securities issued at AC000
Deposits at AC15 938-507-936
Total145 550143 932163123-1 022Total1 0297-
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps19 60319 60315127401
Currency and 1 1811 205122-14
interest rate swaps
Total20 78420 80817149387Total-395-9-611
Hedge of net investments in foreign operations
Total32 5792 5701946077Total-77092
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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31-12-2022
(in millions of EUR) Hedging instrument Hedged item Impact on equity
Change in fair
Change in fair value of hedged
value of hedging instruments used
instruments used as basis for
as basis for recognising Ineffective Effective
recognising hedge hedge portion portion
ineffectiveness for ineffectiveness recognised in recognised in
Notionalamounts 1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy PurchasedSold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 22 753 22 753 185 102 -619 Debt securities held at AC 4 007 -684 -323
Currency and 00000Loans and advances at AC 683 70 -310
interest rate swaps
Debt securities held at FVOCI 1 342 -152 -176
Debt securities issued at AC 14 624 -1 334 1 432
Deposits at AC000
Total2275322753185102-619Total6245-
Portfolio hedge of interest rate risk
Interest rate swaps 123 930 123 930 209 261 3 172 Debt securities held at AC 359 -122 -123
Currency and 1 762 0 101 0 82 Loans and advances at AC 104 980 -4 207 -3 769
interest rate options
Debt securities held at FVOCI 23 -6 -6
Debt securities issued at AC 0 0 0
Deposits at AC 14 574 -1 432 644
Total 125 692 123 930 310 261 3 254 Total -3 254 0 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 20 073 20 073 47 115 177
Currency and 1 204 1 257 0 39 -13
interest rate swaps
Total 21 277 21 330 47 154 164 Total -167 -3 -1 046
Hedge of net investments in foreign operations
Total31 755 1 807 0 505 18 Total -18 0 20
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1 In this table, both legs of the derivatives are reported in the notional amounts.
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2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3).
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3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits.
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\u2022 The Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a
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negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
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derivatives.
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\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
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and risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these
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techniques will be used to limit any resulting accounting mismatch.
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\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
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applied came to -322 million euros. The accumulated amount of fair value hedge adjustments remaining on the balance sheet
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for any hedged items that have ceased to be adjusted for hedging gains and losses amounted to -82 million euros. These
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adjustments are amortised to profit or loss.
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\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and
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accumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to
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accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
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balance sheet.
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\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk became less
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negative in 2023 due to the general decline in interest rates. The \u2018Profit/loss on positions in portfolios hedged against interest
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rate risk\u2019 balance sheet item on the liabilities side of the balance sheet also became less negative for the same reason.
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\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
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Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR)InflowOutflow
Not more than three months34-79
More than three but not more than six months52-103
More than six months but not more than one year115-213
More than one but not more than two years202-401
More than two but not more than five years335-625
More than five years537-671
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Note 4.3: Maximum credit exposure and offsetting
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral and other
Maximum credit credit enhancements
(in millions of EUR)exposure (A)received (B)Net (A-B)
31-12-2023
Subject to impairment341 106141 604199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 2611 721540
Debt securities68 2655668 209
Loans and advances (excl. reverse repos)185 556103 55682 000
Reverse repos25 50125 47624
Other financial assets1 19601 196
Off-balance-sheet liabilities60 58912 51548 073
Irrevocable40 1497 17932 970
Revocable20 4405 33715 103
Not subject to impairment8 9022 4006 502
Debt securities3 15203 152
Loans and advances (excl. reverse repos)83679640
of which designated upon initial recognition at fair value through profit or loss (FVO)000
Reverse repos000
Derivatives4 9141 6043 310
Other financial assets000
Off-balance-sheet liabilities000
Total350 009144 004206 004
31-12-2022
Subject to impairment326 282132 743193 539
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI)2 1061 550 556
Debt securities63 421 9863 323
Loans and advances (excl. reverse repos)181 66799 41582 252
Reverse repos20 18620 131 55
Other financial assets1 561 01 561
Off-balance-sheet liabilities59 44713 09946 348
Irrevocable38 8326 74132 091
Revocable20 6166 35814 258
Not subject to impairment9 2392 2087 031
Debt securities1 745 01 745
Loans and advances (excl. reverse repos) 639 593 46
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 33 33 0
Derivatives6 8211 5825 239
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total335 521134 951200 570
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Maximum credit exposure for a financial asset is the net carrying value. Besides the amounts on the balance sheet, maximum
\n
credit exposure also includes the undrawn portion of credit lines, financial guarantees granted and other irrevocable
\n
commitments.
\n
\u2022 The main types of collateral and other credit enhancements received relate to mortgages on real estate (mainly collateral for
\n
mortgage loans), securities lent out (mainly as a collateral for reverse repos), off-balance-sheet financial guarantees received
\n
and collateral of movable property. Mortgage loans with an LTV (loan-to-value) greater than 100% are limited to 0.5 billion
\n
euros or 0.6% of the entire mortgage loan portfolio at year-end 2023.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are listed at the start of the section.
\n\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
\n

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\n\n
Note 5.11: \u2018Non-current assets held for sale and disposal groups\u2019 and \u2018Liabilities associated with disposal groups\u2019
\n
(IFRS 5)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC Bank Ireland: Non-current assets held for sale and disposal groups 31-12-2022
and Liabilities associated with disposal groups (in millions of EUR)
ASSETS
Loans and advances to customers (excl. reverse repos)8 049
Consumer credit18
Mortgage loans7 938
Term loans84
Current account advances10
LIABILITIES
Deposits from customers and debt securities (excl. repos)1 929
Demand deposits303
Time deposits494
Savings accounts1 132
Deposits from credit institutions and investment firms (excl. repos)91
Of which repayable on demand35
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In October 2021, KBC Bank Ireland confirmed that it had entered into a legally binding agreement with Bank of Ireland relating
\n
to the sale of substantially all of KBC Bank Ireland\u2019s performing loan assets and its deposit book to Bank of Ireland Group (see
\n
Note 6.6 for more details). These sales resulted in a shift to the \u2018Non-current assets held for sale and disposal groups\u2019 and
\n
\u2018Liabilities associated with disposal groups\u2019 items The sale was finalised in February 2023.
\n
\u2022 Maximum credit exposure: the maximum credit risk associated with \u2018Non-current assets held for sale and disposal groups\u2019
\n
amounted to 8.0 billion euros at year-end 2022, of which 7.9 billion euros in collateral and other credit enhancements received.
\n

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Note 6.1: Off-balance-sheet commitments and financial guarantees given and received
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Nominal amountProvisionNet exposureNominal ProvisionNet exposure
amount
Undrawn portion of credit lines granted
Stage 141 551 2041 53139 1341739 117
Stage 26 683 146 6708 077268 051
Stage 3 79 5 73511338
Total48 313 3948 27447 2625647 206
of which irrevocable credit lines27 856 2327 83326 6182726 591
Financial guarantees given
Stage 17 860 27 8597 60027 598
Stage 22 952 62 9473 13983 131
Stage 3 133 44 901194476
Total10 946 5110 89510 8585410 805
Other commitments given
Total1 421 11 4201 44041 436
Off-balance-sheet commitments and financial guarantees
Total60 680 9160 58959 56111459 447
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
\n
euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
\n
billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
\n
estate of the covered bond programme (16.6 billion euros at year-end 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner;
\n
see table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such
\n
as default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will
\n
organise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is
\n
primarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided
\n
in Note 4.3.
\n
\u2022 Collateral acquired through foreclosure came to 3 million euros in 2023 (4 million euros in 2022).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral received (which may be sold or repledgedFair value of collateral sold or
in the absence of default by the owner) (in millions of EUR)Fair value of collateral receivedrepledged
31-12-202331-12-202231-12-202331-12-2022
Financial assets42 21530 1265 2677 792
Equity instruments211622
Debt securities41 95929 8765 2657 790
Loans and advances23523400
Cash0000
Other0000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In the years 2016-2022, KBC contributed to the Single Resolution Fund (SRF) by means of irrevocable payment commitments
\n
(IPCs) in the amount of 90 million euros, which are fully covered by cash collateral. In line with industry practice, the following
\n
accounting treatment is applied to IPCs: (\u00b0) the amount of cash collateral is recognised as a financial asset and
\n
(\u00b0) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral
\n
as a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that
\n
interest is received on the amount outstanding. In a recent decision, the General Court of the EU ruled that in a scenario in
\n
which a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal
\n
in this case at the European Court of Justice before considering the potential implications on the accounting treatment of
\n
IPCs. The 90 million euros is deducted in the calculation of the common equity capital.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag765": { "value": "\n
\u2022 Collateral and credit enhancements received: recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
\n

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\u2022 The amounts presented in the \u2018Financial instruments\u2019 column under the \u2018Amounts not set off in the balance sheet\u2019 heading are
\n
for financial instruments entered into under an enforceable master netting agreement or similar arrangement that does not
\n
meet the criteria defined in IAS 32. These amounts refer to situations in which offsetting can only be applied if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt. The same principle applies for financial instruments given or
\n
received as collateral. The value given in the table for non-cash collateral received (in the \u2018Securities collateral\u2019 column under
\n
the \u2018Amounts not set off in the balance sheet\u2019 heading) is the market value. This is the value that is used if one of the
\n
counterparties defaults, becomes insolvent or goes bankrupt.
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag766": { "value": "\n

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Note 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy
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Fair value hierarchy31-12-202331-12-2022
(in millions of EUR)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
FINANCIAL ASSETS AT FAIR VALUE
Mandatorily measured at fair value through profit or loss other than held for trading
Loans and advances to credit institutions and investment firms (incl. 0 0 0 0013013
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 836 83600625625
Equity instruments 0 0 14 14001313
Investment contracts (insurance)14 241 107 014 34812 638134012 772
Debt securities 13 0 1 14120517
of which sovereign bonds 0 0 0 00000
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1034034
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 00000
Equity instruments 567 0 2 57042900430
Debt securities2 420 717 13 1381 48024441 728
of which sovereign bonds2 364 602 02 9661 44422301 667
Derivatives 33 908 7084 61835 5477296 279
At fair value through OCI
Equity instruments1 212 1 4831 6951 14914031 552
Debt securities14 0792 628 18616 89212 2012 64521915 065
of which sovereign bonds11 6791 501 2613 2069 7231 4297311 225
Hedging derivatives
Derivatives0295029505420542
Total
Total financial assets at fair value32 5347 6562 23142 42227 9139 1591 99839 070
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms 0 40 0 400707
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 81 0 81044044
Derivatives 24 4601 0395 50126 9111 1258 038
Short positions1 428 0 01 42888412301 007
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms 0 0 0 00000
(incl. repos)
Deposits from customers and debt securities (incl. repos) 0 2021 1571 3590741 1311 205
Liabilities under investment contracts13 432 0 013 43211 9960011 996
Hedging derivatives
Derivatives 0 306 95 401047998577
Total
Total financial liabilities at fair value14 8625 0902 29022 24212 8817 6382 35522 874
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\u2022 The fair value hierarchy prioritises the valuation techniques and the respective inputs into three levels:
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- The fair value hierarchy gives the highest priority to \u2018level 1 inputs\u2019. This means that, when there is an active market, quoted
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prices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily
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and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that
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are quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an
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arm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction
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prices. No valuation technique (model) is involved.
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- If there are no price quotations available, the reporting entity establishes fair value using a model based on observable
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or unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level
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2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data
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obtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange
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rates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow
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analysis, or reference to the current or recent fair value of a similar instrument.
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- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the
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assumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks
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involved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be
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considered to be unobservable in the market.
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\u2022 When the inputs used to measure the fair value of an asset or a liability can be categorised into different levels of the fair
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value hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is
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significant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require
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significant adjustment based on unobservable inputs, that measurement is a level 3 measurement.
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\u2022 The valuation methodology and the corresponding classification in the fair value hierarchy of the most commonly used
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financial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level
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indicated in the table, a small portion may actually be classified in another level.
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\u2022 KBC follows the principle that transfers into and out of levels of the fair value hierarchy are made at the end of the reporting
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period. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7.
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Instrument typeProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data.
regularly availablebonds, other liquid bonds, liquid asset backed securities (ABS) in active
markets
Plain vanilla/liquid (Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward Discounted cashflow analysis based on
derivativesrate agreements (FRA), inflation swaps, dividend swaps and futures, discount and estimation curves (derived
reverse floaters, bond future options, interest rate future options, overnight from quoted deposit rates,
index swaps (OIS), FX resetsFX swaps and (CC)IRS)
Caps & floors, interest rate options, European stock options, European & Option pricing model based on
American FX options, forward starting options, digital FX options, FX strips observable inputs (e.g., volatilities)
of simple options, European swaptions, European cancellable IRS
Linear financial liabilities Deposits, simple cashflows, repo transactionsDiscounted cashflow analysis based on
(without optional features) \u2013discount and estimation curves (derived
cash instrumentsfrom quoted deposit rates,
Level 2FX swaps and (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securitiesBVAL, prices corroborated by alternative
backed securitiesobservable market data, or using
comparable spread method
Debt instrumentsKBC IFIMA own issues (liabilities)Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paperDiscounted cashflow analysis based on
instruments)discount and estimation curves (derived
from quoted deposit rates,
FX swaps and (CC)IRS)
Exotic derivativesTarget profit forwards, flexible forwards, American & Asian stock options, Option pricing model based unobservable
Bermudan swaptions, digital interest rate options, quanto interest rate inputs (e.g., correlation)
options, digital stock options, composite stock options, barrier stock
options, quanto digital FX options, FX Asian options, FX European barrier
options, FX simple digital barrier options, FX touch rebates, inflation
options, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS
spread swaps, CMS spread options, CMS interest rate caps/floors,
Level 3(callable) range accruals, auto-callable options, lookback options,
commodity swaps and forwards
Illiquid credit-linked Collateralised debt obligations (notes)Valuation model based on correlation of
instrumentsprobability of default of underlying assets
Private equity investmentsPrivate equity and non-quoted participationsBased on the valuation guidelines of the
European Private Equity & Venture Capital
Association
Illiquid bonds/asset backed Illiquid (mortgage) bonds/asset backed securities that are indicatively BVAL, third-party pricing (e.g., lead
securitiespriced by a single pricing provider in an inactive marketmanager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instrumentsKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOBDiscounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loansGovernment-regulated loans with leveraged interest rates and exotic Discounted cashflow analysis and
early repayment options (K&H)valuation of related derivatives based on
unobservable inputs
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Note 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2
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\u2022 In 2023, KBC transferred 176 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 286 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1. The corresponding figures for 2022 were 77 million
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euros and 434 million euros, respectively. Most of these reclassifications were carried out due to a change in the liquidity of
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government bonds and corporate bonds.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n

\n\n

\n\n
Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly
\n
offset by instruments that had reached maturity.
\n
- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 33 million euros, primarily on
\n
account of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose
\n
by 80 million euros, due primarily to purchases.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 22 million euros, due mainly to sales of existing
\n
positions, only partly offset by new purchases and changes in market inputs.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 86 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new transactions.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments rose by 26 million
\n
euros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity
\n
and the sale of existing positions.
\n
\u2022 In 2022, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
\n
following:
\n
- Financial assets measured at fair value through profit or loss (other than held for trading): the fair value of loans and
\n
advances increased by 65 million euros, primarily on account of new transactions, partly offset by changes in market inputs
\n
and instruments reaching maturity.
\n
- Financial assets at FVOCI: the fair value of unlisted shares rose by 66 million euros, primarily on account of new transactions.
\n
The fair value of debt instruments fell by 36 million euros, due mainly to instruments that had reached maturity and changes
\n
in market inputs.
\n
- Financial assets held for trading: the fair value of derivatives decreased by 232 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities held for trading: the fair value of derivatives decreased by 83 million euros, due mainly to sales of existing
\n
positions and changes in market inputs, only partly offset by new purchases and reclassifications into level 3.
\n
- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 300 million euros due to
\n
changes in market inputs.
\n
- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by 120
\n
million euros, primarily on account of transactions reaching maturity and the sale of existing positions, partly offset by new
\n
transactions.
\n
\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure
\n
to unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using
\n
third-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by
\n
KBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-
\n
correlations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs
\n
used to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value
\n
resulting from a change in these inputs to reflect reasonably possible alternative assumptions is insignificant.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag82": { "value": "\n

\n\n

\n\n

\n\n

\n
Note 5.1: Other assets
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total1 6911 406
Prepaid charges and accrued income627561
Other1 064845
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag83": { "value": "\n

\n\n

\n\n

\n
Note 5.1: Other assets
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total1 6911 406
Prepaid charges and accrued income627561
Other1 064845
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag84": { "value": "\n

\n\n

\n
Note 5.1: Other assets
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total1 6911 406
Prepaid charges and accrued income627561
Other1 064845
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag85": { "value": "\n

\n
Note 5.1: Other assets
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total1 6911 406
Prepaid charges and accrued income627561
Other1 064845
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag86": { "value": "\n

\n\n

\n\n

\n\n
Note 5.2: Tax assets and tax liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
CURRENT TAXES
Current tax assets176174
Current tax liabilities99150
DEFERRED TAXES351689
Deferred tax assets by type of temporary difference1 1341 568
Employee benefits8578
Losses carried forward103186
Tangible and intangible fixed assets8077
Provisions for risks and charges1949
Impairment for losses on loans and advances207219
Financial instruments at fair value through profit or loss and fair value hedges92142
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations445705
Insurance contract liabilities3621
Other, incl. reinsurance contracts6890
Deferred tax liabilities by type of temporary difference784879
Employee benefits9599
Losses carried forward00
Tangible and intangible fixed assets4340
Provisions for risks and charges99
Impairment for losses on loans and advances33
Financial instruments at fair value through profit or loss and fair value hedges76129
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations4150
Insurance contract liabilities467516
Other, incl. reinsurance contracts5032
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets7241 001
Deferred tax liabilities373312
Unused tax losses and unused tax credits117151
\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n
\u2022 Deferred tax assets are recognised to the extent that it is probable that, on the basis of realistic financial projections, taxable
\n
profit will be available against which the deductible temporary differences can be utilised in the foreseeable future (limited to
\n
a period of eight to ten years).
\n
\u2022 Unused tax losses and unused tax credits concern tax losses of group companies which are not capitalised due to insufficient
\n
proof of future taxable profit. Most tax losses and tax credits can be carried forward for 20 years or more.
\n
\u2022 The net change in deferred taxes (-338 million euros in 2023) breaks down as follows:
\n
\u25e6 The change in deferred tax assets of -433 million euros was accounted for chiefly by:
\n
- A net decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments
\n
measured at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-260 million
\n
euros), most of which was recorded directly in OCI.
\n
- A decrease in deferred tax assets via the income statement (-180 million euros), mainly due to the usage and write-
\n
offs of losses carried forward and provisions for liabilities and charges, reinforced by a decrease via the income
\n
statement in impairment for losses on loans and advances and financial instruments at fair value through profit or loss
\n
and fair value hedges.
\n
\u25e6 The change in deferred tax liabilities of -96 million euros was accounted for chiefly by:
\n
- A decrease in deferred tax liabilities for insurance contract liabilities (-49 million euros), with an amount of -120 million
\n
euros being recorded directly in OCI, which was partly offset, including via the income statement.
\n
- A decrease in deferred tax liabilities for financial instruments at fair value through profit or loss and fair value hedges
\n
(-53 million euros).
\n
\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank, KBC Insurance and \u010cSOB in
\n
the Czech Republic
\n
.
\n
\u2022 For more information on the contingent assets relating to the liquidation of KBC Bank Ireland, see Note 3.11.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag87": { "value": "\n

\n\n

\n\n

\n
Note 5.4: Property and equipment and investment property
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Property and equipment3 2162 989
Investment property485571
Rental income5350
Direct operating expenses from investments generating rental income1515
Direct operating expenses from investments not generating rental income11
\n\n\n\n\n\n\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Land and ITOtherTotal property
MOVEMENTS TABLEbuildingsequipmentequipmentand equipmentInvestment property
2023
Opening balance1 3731301 4862 989571
Acquisitions1065383098834
Disposals-240-242-266-82
Depreciation-119-62-25-206-31
Other movements-301-260-289-7
Closing balance1 3061221 7893 216485
accumulated depreciation and impairment1 5854799152 979308
Fair value733
2022
Opening balance1 4791171 4543 050518
Acquisitions376847057585
Disposals-30-1-204-235-13
Depreciation-120-60-25-205-31
Other movements76-209-19612
Closing balance1 3731301 4862 989571
accumulated depreciation and impairment1 5704468762 892376
Fair value\u2013\u2013\u2013\u2013827
\n\n\n
\n\n
\u2022 Annual rates of depreciation: mainly 3% for buildings (including investment property), 33% for IT equipment, between 5% and
\n
33% for other equipment. No depreciation is charged for land.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There was a small amount (around 0.4 billion euros) for commitments for the acquisition of property and equipment. There are
\n
no material restrictions on title, or on property and equipment pledged as security for liabilities.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
building and construction, state of repair, use, etc.).
\n
\u2022 Certain other investment property is valued annually by in-house specialists based on the current annual rental per building
\n
and expected rental movements and on an individual capitalisation rate per building.
\n
\u2022 The impact of the heavy flooding and other extreme weather conditions in 2023 and 2022 on property and equipment and
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
regarding climate-related and other ESG risks, see the \u2018How do we manage our risks?\u2019 section.
\n
\u2022 The impact of our own activities as a bank-insurer on the environment is very limited, especially when compared to industrial
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
See \u2018Focus the on the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed
\n
explanation (the statutory auditor has not audited this section). More details can also be found in our Climate Report and our
\n
Sustainability Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag88": { "value": "\n

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\n\n

\n\n

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\n

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Note 5.5: Goodwill and other intangible assets
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

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Note 6.6: Main changes in the scope of consolidation
\n
\u2022 2022: Acquisition of Bulgarian activities from Raiffeisen Bank International (KBC Bank Bulgaria)
\n
- In July 2022, we finalised the agreement with Raiffeisen Bank International on the acquisition of 100% of the shares in
\n
Raiffeisenbank (Bulgaria) EAD for a total consideration of 1 009 million euros in cash (the deal did not contain any
\n
contingent consideration arrangements). The transaction also includes the subsidiaries Raiffeisen Leasing Bulgaria,
\n
Raiffeisen Asset Management (Bulgaria), Raiffeisen Insurance Broker and Raiffeisen Service. Raiffeisenbank (Bulgaria) EAD
\n
was renamed KBC Bank Bulgaria EAD, and the subsidiaries were also renamed. The bank had a market share in Bulgaria
\n
of an estimated 8% in terms of assets, a network of 122 bank branches, roughly 2 500 employees and 600 000 clients.
\n
- The transaction had already been finalised at year-end 2022 and was therefore included in the consolidated balance
\n
sheet figures of year-end 2022. The results of KBC Bank Bulgaria have been fully consolidated in the income statement
\n
since the third quarter of 2022. The impact in the second half of 2022 amounted to: +108 million euros in total income
\n
(mainly 70 million euros in net interest income and 36 million euros in net commission income), -51 million euros in operating
\n
expenses, -5 million euros in impairment and +47 million euros in result after tax.
\n
- KBC recognised goodwill of 436 million euros in its consolidated financial statements, taking into account limited fair value
\n
adjustments. This is accounted for by the quality of the acquired entity, which is expressed in the qualitative loan portfolio
\n
and profitability (based on the results achieved in previous years and the business plan for the years ahead). It allows KBC
\n
to expand its client base and benefit from economies of scale (through considerable cost synergies for the office network
\n
and head office in Bulgaria and through revenue synergies, including from higher sales of DZI insurance products) and
\n
greater visibility as a result. The acquisition offers KBC the opportunity to earmark its surplus capital for a value-increasing
\n
transaction in a market that the group is highly familiar with. Goodwill is not deductible for tax purposes.
\n
- The transaction had an impact of -0.9 percentage points on KBC Group\u2019s common equity ratio in the third quarter of 2022.
\n
- KBC Bank Bulgaria merged with United Bulgarian Bank (UBB) in April 2023.
\n
\u2022 Sale of activities in Ireland (2022 and 2023)
\n
- At the end of August, KBC Bank Ireland reached agreement on the disposal of a non-performing mortgage loan portfolio
\n
of roughly 1.1 billion euros in a transaction financed by funds managed by CarVal Investors. The deal was finalised in early
\n
February 2022. The loans will be managed by Pepper Finance Corporation (Ireland) DAC as the legal title holder of the
\n
loans. Pepper is supervised by the Central Bank of Ireland.
\n
- In October 2021, KBC Bank Ireland also confirmed that it had entered into a legally binding agreement with Bank of Ireland
\n
relating to the sale of substantially all of KBC Bank Ireland\u2019s performing loan assets and its deposit book to Bank of Ireland
\n
Group The latter also acquired a small non-performing mortgage loan (and credit card balances) portfolio. The
\n
transaction was finalised on 3 February 2023. The acquisition, initially totalling approximately 6.5 billion euros, includes
\n
approximately 7.6 billion euros in performing mortgage loans, approximately 0.1 billion euros in mainly performing
\n
commercial and consumer loans, approximately 0.1 billion euros in non-performing mortgage loans and approximately 1.8
\n
billion euros in deposits.
\n
- The transaction had an impact on the income statement of +0.4 billion euros in 2023 (see the detailed table below). Once
\n
finalised, the transaction also positively impacted the common equity ratio by approximately 0.9 percentage points in the
\n
first quarter of 2023 (partly due to a reduction in risk-weighted assets).
\n
- Also see Note 5.11.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
2022:
Impact of the acquisition of Raiffeisenbank Bulgaria in 2022 (in millions of EUR)Raiffeisenbank Bulgaria
Percentage of shares bought or sold in the relevant yearpurchase
100.00%
Percentage of shares after deal100.00%
For business unitInternational Markets
Deal date (month and year)July 2022
Results of the relevant company/business recognised in the group result as from:July 2022*
Purchase price or sale price1 009
Cashflow for acquiring or selling companies less cash and cash equivalents acquired or sold-42
Amounts recognised for the purchased assets and liabilities (fair value)
Situation on:7 July 2022
Cash and cash balances with central banks1 053
Financial assets4 686
Amortised cost4 521
Fair value through OCI132
Fair value through profit or loss30
Hedging derivatives4
Tax assets2
Investments in associated companies and joint ventures2
Property and equipment35
Goodwill and other intangible assets15
Other assets20
Cash and cash equivalents (included in the above assets)1 053
Financial liabilities5 150
Held for trading19
Amortised cost5 130
Provisions for risks and charges9
Other liabilities21
Cash and cash equivalents (included in the above liabilities)28
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* A further 58 million euros was paid for an additional tier-1 instrument issued by Raiffeisenbank Bulgaria, included in equity at nominal value.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Sale transaction for
remaining loans and
Impact of the transactions relating to Ireland on financial year 2022 and 2023: Sale transaction for deposits and scheduled
one-off items* (in millions of EUR)non-performing loans settlementTotal
2023
Total income\u2013409409
of which Other net income\u2013408408
Operating expenses\u2013-11-11
Impairment\u2013-5-5
on financial assets at amortised cost and at fair value through OCI*\u201366
other\u2013-11-11
Income tax expense\u2013-28-28
RESULT AFTER TAX\u2013365365
2022
Total income616
Operating expenses0-32-33
Impairment-2-38-41
on financial assets at amortised cost and at fair value through OCI*-2-15-17
other0- 24-24
Income tax expense03636
RESULT AFTER TAX3-35 -31
\n\n\n\n\n\n\n\n\n
\n
* The impairment is caused by a comparison between the sale price of the impaired loans and the net carrying value of the underlying loans.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag89": { "value": "\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Software Software
developed developed
(in millions of EUR)Goodwillin-houseexternallyOtherTotal
2023
Opening balance1 346719250162 331
Acquisitions02718711370
Disposals000-2-2
Amortisation0-113-64-2-179
Other movements-106-48-7-3-164
Closing balance1 240829266202 355
accumulated amortisation and impairment369806909312 115
2022
Opening balance913559263131 749
Acquisitions438262739783
Disposals00-1-3-4
Amortisation0-90-78-1-169
Other movements-6-12-8-2-28
Closing balance1 346719250162 331
accumulated amortisation and impairment260646836561 797
\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Goodwill: includes the goodwill paid on companies included in the scope of consolidation and relating to the acquisition of
\n
activities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019
\n
shown on the balance sheet.
\n
\u2022 For goodwill in respect of recent acquisitions, see Note 6.6.
\n
\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and
\n
Note 3.9). This impairment test is performed at least once a year. We also carry out a high level assessment on a quarterly
\n
basis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating
\n
unit. Each entity has a specific risk profile and it is rare to have different profiles within a single entity.
\n
\u2022 Impairment on goodwill under IAS 36: recognised in profit or loss if the recoverable amount of an investment is lower than its
\n
carrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow
\n
analysis) and the fair value (calculated based on multiple analysis, etc.) less costs to sell.
\n
\u2022 The main group companies to which goodwill relates are listed in the table. All of these companies have been valued using
\n
the discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as
\n
the present value of all future free cashflows of the business. This method is based on long-term projections about the
\n
company\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the
\n
business at the end of the specific projection period). These long-term projections are the result of an assessment of past
\n
and present performances combined with external sources of information on future performances in the respective markets
\n
and the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects
\n
have been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is
\n
determined using a long-term average market growth rate. The present value of these future cashflows is calculated using a
\n
compound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a
\n
market-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct
\n
discounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that
\n
can be paid out to the company\u2019s shareholders, account taken of the minimum capital requirements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Discount rates throughout the specific period
Goodwill outstanding31-12-202331-12-2022of cashflow projections
(in millions of EUR)31-12-202331-12-2022
K&H Bank18117315.2% \u2013 13.7%17.3% \u2013 13.3%
\u010cSOB (Czech Republic)25225913.0% \u2013 12.8%13.9% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna 6617613.0% \u2013 12.8%13.2% \u2013 12.8%
United Bulgarian Bank54654413.3% \u2013 12.5%12.5% \u2013 12.2%
DZI Insurance757511.2% \u2013 10.4%10.5% \u2013 8.1%
KBC Commercial Finance212112.0%9.9%
Pension Insurance Company UBB56568.3% \u2013 8.4%9.3% \u2013 9.1%
Rest4242\u2013\u2013
Total1 2401 346\u2013\u2013
\n\n\n\n\n\n\n\n
\n
\u2022 The period to which the cashflow budgets and projections relate is 10 years in most cases. This longer period is used to take
\n
account of current strong growth in the Central and Eastern European countries, where the growth rate is expected to
\n
develop towards a more moderate level in the longer term.
\n
\u2022 The growth rate used to extrapolate the cashflow projections after that period is equal to the expected long-term growth
\n
rate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2023 (also between
\n
3.2% and 4.7% in 2022).
\n
\u2022 No sensitivity analysis was carried out for entities where the recoverable amount exceeded the carrying value to such a large
\n
extent that no reasonably possible change in the key assumptions would result in the recoverable amount being less than or
\n
equal to the carrying value. The table gives an indication for the other entities of the impact of reasonable changes in the key
\n
assumptions on goodwill impairment.
\n
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Sensitivity to reasonable changes1.0% increase1.0% increase5% decrease
(in millions of EUR)* in discount ratein targeted solvency ratioin annual net profit
United Bulgarian Bank-164-109-98
\u010cSOB Stavebn\u00ed sporitelna-9-9-12
* The impact of the changes is calculated ceteris paribus.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag768": { "value": "\n
Note 5.6.2: Movements in Life insurance contract liabilities
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured measured
under PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance13 2581012647313 444
Insurance service result-381-2218161-149
Insurance revenues-399\u2013\u2013\u2013\u2013-399
BBA + VFA by transition method-370\u2013\u2013\u2013\u2013-370
Modified retrospective approach-10\u2013\u2013\u2013\u2013-10
Fair value approach-267\u2013\u2013\u2013\u2013-267
Other-93\u2013\u2013\u2013\u2013-93
PAA -30\u2013\u2013\u2013\u2013-30
Insurance service expenses19-2218161251
Incurred claims (excl. repayments of investment components)--1156131169
Incurred costs other than claims0-792287
Amortised acquisition expenses19\u2013\u2013\u2013\u201319
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u20136\u2013\u2013\u20136
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-3011-30
Investment components -1 284\u20131 284\u2013\u20130
Insurance finance income and expense8150330821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows1 271\u2013-1 497-16\u2013-242
Premiums received1 401\u2013\u2013\u2013\u20131 401
Claims paid\u2013\u2013-1 404-14\u2013-1 419
Costs other than claims paid\u2013\u2013-92-2\u2013-94
Acquisition costs paid-130\u2013\u2013\u2013\u2013-130
Other-120000-13
Closing balance13 667713450313 862
2022
Opening balance16 5767613856216 847
Insurance service result-361-73219161-198
Insurance revenues-372\u2013\u2013\u2013\u2013-372
BBA + VFA by transition method-343\u2013\u2013\u2013\u2013-343
Modified retrospective approach-11\u2013\u2013\u2013\u2013-11
Fair value approach-263\u2013\u2013\u2013\u2013-263
Other-69\u2013\u2013\u2013\u2013-69
PAA -29\u2013\u2013\u2013\u2013-29
Insurance service expenses12-73219161174
Incurred claims (excl. repayments of investment components)\u2013-1160140173
Incurred costs other than claims0-6843081
Amortised acquisition expenses12\u2013\u2013\u2013\u201312
Changes in fulfilment cashflows that relate to future service \u2013 loss on\u2013-67\u2013\u2013\u2013-67
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013-25-1-1-25
Investment components -1 606\u20131 606\u2013\u20130
Insurance finance income and expense-2 5107-10-80-2 521
In P&L91010092
In OCI-2 6017-12-80-2 614
Total changes in comprehensive income-4 477-661 81581-2 719
Total cashflows1 151\u2013-1 827-170-692
Premiums received1 259\u2013\u2013\u2013\u20131 259
Claims paid\u2013\u2013-1 742-14\u2013-1 756
Costs other than claims paid\u2013\u2013-84-3\u2013-87
Acquisition costs paid-108\u2013\u2013\u2013\u2013-108
Other800008
Closing balance13 2581012647313 444
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\u2022 When transitioning from IFRS 4 to IFRS 17, KBC applied the Full Retrospective Approach (FRA) for recent years. Applying the FRA
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for non-recent years is impracticable due to either a lack of historical data (data and hypotheses) or high costs associated
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with making information from the past available for FRA transition calculations. Where the FRA is impracticable, the Fair Value
\n
Approach (FVA) was predominantly used to determine the CSM on the transition date. The Modified Retrospective Approach
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(MRA) is rarely applied as this transition approach is overly complex and the costs do not outweigh the benefits. KBC calculates
\n
a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently adjusts a few assumptions or parameters.
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The adjustments relate to the inclusion in the IFRS 13 fair value of total expenses, i.e. including non-directly attributable
\n
expenses, and to the inclusion of a risk premium that covers not only non-financial risk, but also system and integration
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expenses and capital funding costs. All past years are combined into a single cohort for the FVA transition calculations. The
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FVA CSM ensues from cost and risk margin differences under IFRS 17 and IFRS 13 measurement approaches. The OCI amount
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on the transition date under the FVA is determined in accordance with the transition exemptions provided in IFRS 17.
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\u2022 Movement in insurance liabilities in 2023:
\n
- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised as
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KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income and
\n
expense between P&L and OCI.
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- The movement in the investment component of 1 284 million euros from LRC to LIC indicates the amounts of contracts coming
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at maturity or lapsed.
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\u2022 Movement in insurance liabilities 2022:
\n
- Due to the increase in market interest rates during 2022, a gain in OCI of 2 614 million euros before tax is recognised as KBC
\n
made the accounting policy choice for all portfolios within the group to disaggregate IFIE between P&L and OCI. The Life
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insurance service result was positively impacted by a net reversal of loss component for an amount of 67 million euros.
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- The movement in the investment component of 1 606 million euros from LRC to LIC indicates the amounts of contracts coming
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at maturity or lapsed.
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\u2022 On transitioning to IFRS 17, KBC applied mainly the fair value approach. Therefore, the amortised acquisition costs are low as
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they are not estimated under the fair value approach (i.e. the prospective approach).
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\u2022 The Life insurance contracts are typically long-term contracts and are therefore measured according to the BBA or VFA. The
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latter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold
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contracts mandatorily contain insurance risk cover.
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\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, which are repayable under all
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circumstances and as such include an investment component. For defining the investment component, an investigation based
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on the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life
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insurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered
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an investment component. Any associated surrender fees resulting from surrender are considered insurance components.
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Note 5.6.3: Movements in Non-life insurance contract liabilities
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(in millions of EUR)Liabilities for remaining coverageLiabilities for incurred claimsTotal
Excl. loss Contracts not Contracts
componentLoss componentmeasured under measured
PAAunder PAA
Present value Risk
of future adjustment
cashflows
2023
Opening balance6751141 8022222 714
Insurance service result-1 7890281 3437-410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -29\u2013\u2013\u2013\u2013-29
Other-7\u2013\u2013\u2013\u2013-7
PAA -2 244\u2013\u2013\u2013\u2013-2 244
Insurance service expenses4910281 34371 869
Incurred claims (excl. repayments of investment components)0-1261 091621 178
Incurred costs other than claims1032190223
Amortised acquisition expenses 490\u2013\u2013\u2013\u2013490
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u2013033-55-22
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-4801891254
In P&L00027430
In OCI-480063824
Total changes in comprehensive income-1 8370291 43319-356
Total cashflows1 862\u2013-27-1 288\u2013547
Premiums received2 357\u2013\u2013\u2013\u20132 357
Claims paid\u2013\u2013-24-1 070\u2013-1 094
Costs other than claims paid\u2013\u2013-3-218\u2013-221
Acquisition costs paid -496\u2013\u2013\u2013\u2013-496
Other10017018
Closing balance7001161 9642402 922
2022
Opening balance7951151 9882663 065
Insurance service result-1 6080241 273-16-328
Insurance revenues-2 049\u2013\u2013\u2013\u2013-2 049
BBA by transition method-35\u2013\u2013\u2013\u2013-35
Modified retrospective approach0\u2013\u2013\u2013\u20130
Fair value approach -30\u2013\u2013\u2013\u2013-30
Other-5\u2013\u2013\u2013\u2013-5
PAA-2 013\u2013\u2013\u2013\u2013-2 013
Insurance service expenses4410241 273-161 721
Incurred claims (excl. repayments of investment components)\u2013-1211 098651 183
Incurred costs other than claims -1032140216
Amortised acquisition expenses441\u2013\u2013\u2013\u2013441
Changes in fulfilment cashflows that relate to future service \u2013 loss\u20131\u2013\u2013\u20131
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service\u2013\u20130-38-81-120
Investment components0\u20130\u2013\u20130
Insurance finance income and expense-1310-2-253-28-413
In P&L-200514
In OCI-1290-1-258-29-417
Total changes in comprehensive income-1 7390221 020-44-741
Total cashflows1 620\u2013-23-1 208\u2013388
Premiums received2 074\u2013\u2013\u2013\u20132 074
Claims paid\u2013\u2013-20-995\u2013-1 015
Costs other than claims paid\u2013\u2013-3-214\u2013-216
Acquisition costs paid-454\u2013\u2013\u2013\u2013-454
Other-100202
Closing balance6751141 8022222 714
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\u2022 In Non-life, KBC applies mostly the PAA, as the coverage period is 1 year or less.
\n
\u2022 The cost of outstanding claims is based on the past claims development experience to project future claims development.
\n
These methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling
\n
costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
\n
are mainly analysed per accident year. Large claims are separately addressed.
\n
\u2022 Estimates of salvage recoveries and subrogation reimbursement are considered in the measurement of the ultimate claim
\n
costs.
\n
\u2022 No asset for insurance acquisition cashflows is currently recognised.
\n

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\n\n
Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Present value Risk
of future adjustment Total insurance
cashflows (incl. (incl. LIC)contract
(in millions of EUR)LIC)Contractual service marginliabilities
Insurance
contracts that Insurance
existed at the contracts that
transition date, existed at the
modified transition date, Other
retrospective fair value insurance
approach approach contracts
2023
Opening balance11 378112451 37748013 393
Insurance service result-39047-18198-139
Changes that relate to future service-3995641202245
New business-16117\u2013\u20131506
Changes in estimates reflected in the CSM -23839412074-1
Changes in estimates that result in onerous contract 00\u2013\u2013\u20130
losses and reversals
Changes that relate to current service38-8-5-113-26-113
CSM recognised in P&L0\u2013-5-113-26-143
Changes in the risk adjustment (expected)0-8\u2013\u2013\u2013-8
Experience adjustments38\u2013\u2013\u2013\u201338
Changes to liabilities for incurred claims related to past -29-2\u2013\u2013\u2013-30
service
Insurance finance income and expense809-7197818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income41840016205679
Total cashflows-252\u2013\u2013\u2013\u2013-252
Premiums received1 371\u2013\u2013\u2013\u20131 371
Claims paid-1 404\u2013\u2013\u2013\u2013-1 404
Costs other than claims paid-92\u2013\u2013\u2013\u2013-92
Acquisition costs paid-126\u2013\u2013\u2013\u2013-126
Other changes-7-12-6-1-14
Closing balance11 538152471 38768313 807
2022
Opening balance15 4261105598121516 787
Insurance service result-8314-7382263-189
Changes that relate to future service-84213-2476288-67
New business-12614\u2013\u201313523
Changes in estimates reflected in the CSM-6260-24761520
Changes in estimates that result in onerous contract -900\u2013\u2013\u2013-90
losses and reversals
Changes that relate to current service33-8-5-94-24-98
CSM recognised in P&L\u2013\u2013-5-94-24-123
Changes in the risk adjustment (expected)\u2013-8\u2013\u2013\u2013-8
Experience adjustments33\u2013\u2013\u2013\u201333
Changes to liabilities for incurred claims related to past -23-2\u2013\u2013\u2013-25
service
Insurance finance income and expense-2 519-2161-2 513
In P&L83216192
In OCI-2 602-4\u2013\u2013\u2013-2 606
Total changes in comprehensive income-3 3501-7389264-2 702
Total cashflows-700\u2013\u2013\u2013\u2013-700
Premiums received1 231\u2013\u2013\u2013\u20131 231
Claims paid-1 742\u2013\u2013\u2013\u2013-1 742
Costs other than claims paid-84\u2013\u2013\u2013\u2013-84
Acquisition costs paid-105\u2013\u2013\u2013\u2013-105
Other changes21-3718
Closing balance11 378112451 37748013 393
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
\n
\u25e6 Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by the
\n
insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity of the
\n
benefits provided to the policyholder under a contract and its expected coverage period.
\n
\u25e6 Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected to be
\n
provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current period.
\n
\u2022 Main movements in 2023: there were no material exceptional movements.
\n
\u2022 Main movements in 2022: the net movement in the loss component amounted to 67 million euros and was mainly explained by
\n
(i) new business in the year 2022 for which a loss component of -24 million euros was recognised and (ii) a reversal of loss
\n
component of 90 million euros due to increasing interest rates, resulting in a higher margin expected to be earned on future
\n
premiums. The increasing interest rates were also the main reason for the increase of 626 million euros in the CSM, as more
\n
margin was expected to be earned on future premiums.
\n

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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Present value Risk
of future adjustment
cashflows (incl. (incl. LIC)Total insurance
(in millions of EUR)LIC)Contractual service margincontract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2023
Opening balance17759367252
Insurance service result1116-417-7
Changes that relate to future service919-38100
New business-181\u2013170
Changes in estimates reflected in the CSM2717-38-70
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service2-3-3-4-7
CSM recognised in P&L\u2013\u2013-3-4-6
Changes in the risk adjustment (expected)\u2013-3\u2013\u2013-3
Experience adjustments2\u2013\u2013\u20132
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-29-1901-48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income-17-4-417-54
Total cashflows8\u2013\u2013\u20138
Premiums received43\u2013\u2013\u201343
Claims paid-24\u2013\u2013\u2013-24
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-7\u2013\u2013\u2013-7
Other changes00000
Closing balance8715274206
2022
Opening balance1361179636386
Insurance service result-36-3-331-11
Changes that relate to future service-3612340
New business-181\u2013170
Changes in estimates reflected in the CSM-1902170
Changes in estimates that result in onerous contract 00\u2013\u20130
losses and reversals
Changes that relate to current service0-4-5-3-11
CSM recognised in P&L\u2013\u2013-5-3-8
Changes in the risk adjustment (expected)\u2013-4\u2013\u2013-4
Experience adjustments0\u2013\u2013\u20130
Changes to liabilities for incurred claims related to past 00\u2013\u20130
service
Insurance finance income and expense-93-3900-132
In P&L-1000-2
In OCI-92-39\u2013\u2013-131
Total changes in comprehensive income-129-42-330-144
Total cashflows9\u2013\u2013\u20139
Premiums received39\u2013\u2013\u201339
Claims paid-20\u2013\u2013\u2013-20
Costs other than claims paid-3\u2013\u2013\u2013-3
Acquisition costs paid-6\u2013\u2013\u2013-6
Other changes00000
Closing balance17759367252
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\u2022 In Non-life, the BBA is applied to \u2018individual health insurance\u2019.
\n
\u2022 The decline recognised in insurance finance income and expense through OCI of 48 million euros in 2023 is accounted for by
\n
the increase in the discount curve in the long term (more than 20 years). The decline of 131 million euros in 2022 is attributable
\n
to the sharp increase in the discount curve during the first half of the year. A typical feature of the hospitalisation portfolio is
\n
that interest rate movements have a greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums
\n
are levelled (constant \u2018cash in\u2019 during the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019
\n
more towards the end of the contract).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag769": { "value": "\n

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Note 5.7: Provisions for risks and charges
\n\n
Note 5.7.1: Overview
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total provisions for risks and charges183418
Provisions for off-balance-sheet commitments and financial guarantees91114
Provisions for other risks and charges92305
Provisions for restructuring3792
Provisions for taxes and pending legal disputes37192
Other1820
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Note 5.7.2: Details of off-balance-sheet commitments and financial guarantees
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Subject to
Subject to 12-Subject to lifetime ECL \u2013
(in millions of EUR)month ECLlifetime ECLnon-performingTotal
31-12-2023
Provisions on 1 January193560114
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-2 3 1 2
Stage 2 (lifetime ECL) 1-13 9-3
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 1-2-2
New financial assets 10 4 2 16
Changes in risk parameters during the reporting period-3-6-12-21
Changes in the model or methodology 0 0 0 0
Derecognised financial assets-3-3-3-9
Other 0 0 2 2
Movements without an impact on results
Derecognised financial assets 0 0 0 0
Changes in the scope of consolidation 0-1 0-1
Other 0 1-7-7
Provisions on 31 December 22 20 49 91
31-12-2022
Provisions on 1 January192191130
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL)-610610
Stage 2 (lifetime ECL)0-572
Stage 3 \u2018non-performing\u2019 (lifetime ECL)06-24
New financial assets84012
Changes in risk parameters during the reporting period-11-45-45
Changes in the model or methodology0000
Derecognised financial assets-1-1-1-3
Other0-50-5
Movements without an impact on results
Derecognised financial assets0000
Changes in the scope of consolidation1236
Other0112
Provisions on 31 December193560114
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\u2022 Also see Note 6.1.
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Note 5.7.3: Details of provisions for other risks and charges
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Provisions for Provisions for taxes and
(in millions of EUR)restructuringpending legal disputesOtherTotal
2023
Opening balance9219220305
Movements with an impact on results
Amounts allocated 1110 5 26
Amounts used-65-163-5-233
Unused amounts reversed-1-3-2-6
Transfers out of/into liabilities associated 0 0 0 0
with disposal groups
Changes in the scope of consolidation 0 0 0 0
Other 0 101
Closing balance 37 37 18 92
2022
Opening balance874520152
Movements with an impact on results
Amounts allocated131639185
Amounts used-7-11-7-26
Unused amounts reversed0-6-2-8
Transfers out of/into liabilities associated0000
with disposal groups
Changes in the scope of consolidation0122
Other01-10
Closing balance9219220305
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For most of the provisions recorded, no reasonable estimate can be made of when they will be used.
\n
\u2022 For details on \u2018Provisions for taxes and pending legal disputes\u2019 in 2022, see Note 3.5
\n
\u2022 Other provisions included those set aside for miscellaneous risks.
\n\n

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\n
\u2022 Information relating to the main legal disputes pending: claims filed against KBC group companies are \u2013 in keeping with IFRS
\n
rules \u2013 treated on the basis of an assessment of whether they will lead to an outflow of resources (i.e. \u2018probable outflow\u2019,
\n
\u2018possible outflow\u2019 or \u2018remotely probable outflow\u2019). Provisions are set aside for \u2018probable outflow\u2019 cases (see \u2018Notes on the
\n
accounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial
\n
statements if such cases might have a material impact on the balance sheet (i.e. when the claim could lead to a possible
\n
outflow of more than 50 million euros). All other claims (\u2018remotely probable outflow\u2019), of whatever magnitude, that represent a
\n
minor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is
\n
limited in order not to prejudice the position of the group in ongoing litigation.
\n\n

\n\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
\n

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by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
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Note 5.8: Other liabilities
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(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
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\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
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Note 5.9: Retirement benefit obligations
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period2 5803 335
Current service cost95 129
Interest cost104 26
Actuarial gain or loss resulting from changes in demographic assumptions-3-10
Actuarial gain or loss resulting from changes in financial assumptions152-814
Experience adjustments-56 58
Past-service cost00
Benefits paid-149 -129
Other0-14
Defined benefit obligations at the end of the period2 7242 580
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period2 7463 244
Actual return on plan assets222-499
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 115 25
Employer contributions93 94
Plan participant contributions20 19
Benefits paid-149-129
Other516
Fair value of plan assets at the end of the period2 9362 746
of which financial instruments issued by the group00
of which property occupied by KBC22
Funded status
Plan assets in excess of defined benefit obligations212 166
Reimbursement rights00
Asset ceiling limit-70-12
Unfunded accrued/prepaid pension cost142 153
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period153-128
Amounts recognised in the income statement-65-112
Amounts recognised in other comprehensive income-43 299
Employer contributions93 94
Other4-1
Unfunded accrued/prepaid pension cost at the end of the period142 153
Amounts recognised in the income statement-65-112
Current service cost-95-129
Interest cost10-1
Plan participant contributions20 19
Other000
Changes to the amounts recognised in other comprehensive income-43 299
Actuarial gain or loss resulting from changes in demographic assumptions3
Actuarial gain or loss resulting from changes in financial assumptions-152 814
Actuarial result on plan assets107-524
Experience adjustments56-58
Adjustments to asset ceiling limits125
Other-58 31
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans-18-21
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\n

\n\n

\n\n
\u2022 Retirement benefits that are actively accrued for the Belgium-based staff of KBC Bank, KBC Insurance and most of their
\n
Belgian subsidiaries are accrued exclusively through the KBC pension fund. Up until year-end 2018, employer-funded
\n
retirement benefits had accrued primarily through a defined benefit plan, where the benefit is calculated based on the final
\n
salary of employees before they retire, the number of years they had been in the plan and a formula that applies a progressive
\n
rate scale. A defined contribution plan was introduced on 1 January 2014 for all new employees and any employees who had
\n
chosen to switch to it. In this plan, a contribution is deposited based on the current monthly salary and the amounts deposited
\n
are paid out together with the (guaranteed) return on retirement. Both types of pension plan are managed by the KBC pension
\n
fund, which uses the services of KBC Asset Management for the investment strategy. In addition, there are a number of smaller,
\n
closed group insurance schemes from the past that will continue to be funded and are managed by the KBC pension fund.
\n
On 1 January 2019, a new defined contribution plan was introduced to replace the one introduced in 2014. All employees were
\n
again given the one-time option of switching from the defined benefit plan to the new defined contribution plan. At year-end
\n
2023, 52% of employees were active participants in the defined benefit plan and 48% in the defined contribution plan (the
\n
corresponding figures at year-end 2022 were 55% and 45%).
\n
\u2022 The expected age of retirement of each employee and the expected wage inflation based on an inflation curve derived from
\n
the market value of inflation-linked bonds are taken into account in the calculation of the gross defined benefit obligations.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
In 2023, market data was adopted in full without levelling off percentages and the term of the market data was extended
\n
from 22 to 30 years.
\n
\u2022 Since 1 January 2020, the insurance risks related to death and disability are fully reinsured through an external reinsurance
\n
programme.
\n
\u2022 The KBC Pension Fund believes in a balanced ESG approach that allows improvement of the greenhouse gas intensity but
\n
also considers other environmental themes such as biodiversity and social and governance issues. As regards the
\n
management of the assets, the share of responsible investments came to around 89% at the end of December. The aim is for
\n
the KBC Pension Fund investment portfolio to be carbon-neutral by 2050. At the end of September 2023, the greenhouse gas
\n
intensity of the shares held in portfolio was roughly 40% of the MSCI World AC benchmark, for the corporate bonds held in
\n
portfolio it was roughly 36% of the Iboxx Euro Corporates benchmark and for the government bonds held in portfolio it was
\n
roughly 121% of the JPM EMU Government Bond benchmark, a decrease from 2019 of 56%, 40% and 25%, respectively.
\n
\u2022 As a result of the higher average interest rates, the pension reserves of participants are often higher than the retirement
\n
benefit obligations calculated as the present value of the guaranteed minimum pension capital under the defined
\n
contribution plan. In 2023, the net asset was therefore reduced by the difference between the retirement benefit obligations
\n
calculated in this way and the higher guaranteed minimum reserves and/or the pension reserves calculated using the
\n
assigned fund return. The difference at the end of 2023 was 41 million euros and has been added to \u2018Adjustments to asset
\n
ceiling limits\u2019, resulting in the net asset being reduced by this amount. As, in the previous year, the retirement benefit
\n
obligations for the defined contribution plan were expressed as the maximum between the present retirement benefit
\n
obligations and the guaranteed minimum reserves, interest rate sensitivity is now higher.
\n
\u2022 In the second quarter of 2023, the model was adjusted by replacing an external supplier\u2019s discount curve with a KBC curve
\n
that is based on Bloomberg data on the prices of AA-rated corporate bonds. If the same method had been used to determine
\n
the curve at the beginning of the year, the retirement benefit obligation would have been 25 million euros lower.
\n
\u2022 There are no significant defined benefit plans in the group\u2019s other core countries.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Additional information on retirement benefit obligations (in millions of EUR)20232022202120202019
Changes in main headings in the main table
Defined benefit obligations2 7242 5803 3353 3873 212
Fair value of plan assets 2 9362 7463 2442 8492 791
Unfunded accrued/prepaid pension cost142153-128-537-457
Impact of changes in the assumptions used in the actuarial calculation of plan
assets and retirement benefit obligations
Impact on plan assets00000
Impact on retirement benefit obligations*149-825-35253250
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
* Arising from defined benefit plans. A plus sign indicates an increase in the (absolute value of) the obligation, a minus sign a decrease.
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Additional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund
Composition (31-12-2023)
Equity instruments31%
Bonds55%
Real estate13%
Cash1%
of which illiquid assets17%
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag770": { "value": "\n
Note 5.7.1: Overview
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total provisions for risks and charges183418
Provisions for off-balance-sheet commitments and financial guarantees91114
Provisions for other risks and charges92305
Provisions for restructuring3792
Provisions for taxes and pending legal disputes37192
Other1820
\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n

\n
Note 5.7.3: Details of provisions for other risks and charges
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Provisions for Provisions for taxes and
(in millions of EUR)restructuringpending legal disputesOtherTotal
2023
Opening balance9219220305
Movements with an impact on results
Amounts allocated 1110 5 26
Amounts used-65-163-5-233
Unused amounts reversed-1-3-2-6
Transfers out of/into liabilities associated 0 0 0 0
with disposal groups
Changes in the scope of consolidation 0 0 0 0
Other 0 101
Closing balance 37 37 18 92
2022
Opening balance874520152
Movements with an impact on results
Amounts allocated131639185
Amounts used-7-11-7-26
Unused amounts reversed0-6-2-8
Transfers out of/into liabilities associated0000
with disposal groups
Changes in the scope of consolidation0122
Other01-10
Closing balance9219220305
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For most of the provisions recorded, no reasonable estimate can be made of when they will be used.
\n
\u2022 For details on \u2018Provisions for taxes and pending legal disputes\u2019 in 2022, see Note 3.5
\n
\u2022 Other provisions included those set aside for miscellaneous risks.
\n\n

\n\n

\n
\u2022 Information relating to the main legal disputes pending: claims filed against KBC group companies are \u2013 in keeping with IFRS
\n
rules \u2013 treated on the basis of an assessment of whether they will lead to an outflow of resources (i.e. \u2018probable outflow\u2019,
\n
\u2018possible outflow\u2019 or \u2018remotely probable outflow\u2019). Provisions are set aside for \u2018probable outflow\u2019 cases (see \u2018Notes on the
\n
accounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial
\n
statements if such cases might have a material impact on the balance sheet (i.e. when the claim could lead to a possible
\n
outflow of more than 50 million euros). All other claims (\u2018remotely probable outflow\u2019), of whatever magnitude, that represent a
\n
minor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is
\n
limited in order not to prejudice the position of the group in ongoing litigation.
\n\n

\n\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n

\n\n

\n\n

\n\n
by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag771": { "value": "\n

\n\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n
by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n

\n\n

\n\n

\n
Note 6.1: Off-balance-sheet commitments and financial guarantees given and received
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Nominal amountProvisionNet exposureNominal ProvisionNet exposure
amount
Undrawn portion of credit lines granted
Stage 141 551 2041 53139 1341739 117
Stage 26 683 146 6708 077268 051
Stage 3 79 5 73511338
Total48 313 3948 27447 2625647 206
of which irrevocable credit lines27 856 2327 83326 6182726 591
Financial guarantees given
Stage 17 860 27 8597 60027 598
Stage 22 952 62 9473 13983 131
Stage 3 133 44 901194476
Total10 946 5110 89510 8585410 805
Other commitments given
Total1 421 11 4201 44041 436
Off-balance-sheet commitments and financial guarantees
Total60 680 9160 58959 56111459 447
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
\n
euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
\n
billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
\n
estate of the covered bond programme (16.6 billion euros at year-end 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner;
\n
see table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such
\n
as default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will
\n
organise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is
\n
primarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided
\n
in Note 4.3.
\n
\u2022 Collateral acquired through foreclosure came to 3 million euros in 2023 (4 million euros in 2022).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral received (which may be sold or repledgedFair value of collateral sold or
in the absence of default by the owner) (in millions of EUR)Fair value of collateral receivedrepledged
31-12-202331-12-202231-12-202331-12-2022
Financial assets42 21530 1265 2677 792
Equity instruments211622
Debt securities41 95929 8765 2657 790
Loans and advances23523400
Cash0000
Other0000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In the years 2016-2022, KBC contributed to the Single Resolution Fund (SRF) by means of irrevocable payment commitments
\n
(IPCs) in the amount of 90 million euros, which are fully covered by cash collateral. In line with industry practice, the following
\n
accounting treatment is applied to IPCs: (\u00b0) the amount of cash collateral is recognised as a financial asset and
\n
(\u00b0) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral
\n
as a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that
\n
interest is received on the amount outstanding. In a recent decision, the General Court of the EU ruled that in a scenario in
\n
which a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal
\n
in this case at the European Court of Justice before considering the potential implications on the accounting treatment of
\n
IPCs. The 90 million euros is deducted in the calculation of the common equity capital.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag772": { "value": "\n
\u25e6 Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff
\n
Investments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the
\n
bankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities
\n
by Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by
\n
the trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation
\n
process was conducted on the basis of preliminary objections in respect of the applicability of the Bankruptcy Code\u2019s
\n
\u2018safe harbor\u2019 and \u2018good defenses\u2019 rules, as well as prudential limitations on U.S. courts\u2019 powers in international cases, to
\n
subsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the
\n
Trustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A
\n
court ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court
\n
(\u2018Court of Appeals for the Second Circuit\u2019) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August
\n
2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by
\n
the Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second
\n
Circuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack
\n
of good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a
\n
decision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
by reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the
\n
amended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion
\n
contesting jurisdiction and proceeded to establish a progress plan for the proceedings, which provides for a term for the
\n
investigation of the facts that ends on 22 September 2025. In the meantime, both parties have released the first factual
\n
documents. The next step is to select certain persons named in the disclosures already made and who are likely to be
\n
heard by one or both parties in the proceedings. Despite the increased burden of proof, KBC still believes it has good and
\n
credible defenses, including demonstrating its good faith. The procedure may still take several years.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
\n
euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
\n
billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
\n
estate of the covered bond programme (16.6 billion euros at year-end 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag773": { "value": "\n

\n\n

\n\n

\n\n

\n\n

\n

\n\n\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag774": { "value": "\n

\n\n

\n\n

\n\n

\n

\n\n\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag775": { "value": "\n

\n\n

\n\n

\n

\n\n\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n

\n\n

\n\n
Note 5.9: Retirement benefit obligations
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(in millions of EUR)31-12-202331-12-2022
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period2 5803 335
Current service cost95 129
Interest cost104 26
Actuarial gain or loss resulting from changes in demographic assumptions-3-10
Actuarial gain or loss resulting from changes in financial assumptions152-814
Experience adjustments-56 58
Past-service cost00
Benefits paid-149 -129
Other0-14
Defined benefit obligations at the end of the period2 7242 580
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period2 7463 244
Actual return on plan assets222-499
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 115 25
Employer contributions93 94
Plan participant contributions20 19
Benefits paid-149-129
Other516
Fair value of plan assets at the end of the period2 9362 746
of which financial instruments issued by the group00
of which property occupied by KBC22
Funded status
Plan assets in excess of defined benefit obligations212 166
Reimbursement rights00
Asset ceiling limit-70-12
Unfunded accrued/prepaid pension cost142 153
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period153-128
Amounts recognised in the income statement-65-112
Amounts recognised in other comprehensive income-43 299
Employer contributions93 94
Other4-1
Unfunded accrued/prepaid pension cost at the end of the period142 153
Amounts recognised in the income statement-65-112
Current service cost-95-129
Interest cost10-1
Plan participant contributions20 19
Other000
Changes to the amounts recognised in other comprehensive income-43 299
Actuarial gain or loss resulting from changes in demographic assumptions3
Actuarial gain or loss resulting from changes in financial assumptions-152 814
Actuarial result on plan assets107-524
Experience adjustments56-58
Adjustments to asset ceiling limits125
Other-58 31
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans-18-21
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\u2022 Retirement benefits that are actively accrued for the Belgium-based staff of KBC Bank, KBC Insurance and most of their
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Belgian subsidiaries are accrued exclusively through the KBC pension fund. Up until year-end 2018, employer-funded
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retirement benefits had accrued primarily through a defined benefit plan, where the benefit is calculated based on the final
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salary of employees before they retire, the number of years they had been in the plan and a formula that applies a progressive
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rate scale. A defined contribution plan was introduced on 1 January 2014 for all new employees and any employees who had
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chosen to switch to it. In this plan, a contribution is deposited based on the current monthly salary and the amounts deposited
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are paid out together with the (guaranteed) return on retirement. Both types of pension plan are managed by the KBC pension
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fund, which uses the services of KBC Asset Management for the investment strategy. In addition, there are a number of smaller,
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closed group insurance schemes from the past that will continue to be funded and are managed by the KBC pension fund.
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On 1 January 2019, a new defined contribution plan was introduced to replace the one introduced in 2014. All employees were
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again given the one-time option of switching from the defined benefit plan to the new defined contribution plan. At year-end
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2023, 52% of employees were active participants in the defined benefit plan and 48% in the defined contribution plan (the
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corresponding figures at year-end 2022 were 55% and 45%).
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\u2022 The expected age of retirement of each employee and the expected wage inflation based on an inflation curve derived from
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the market value of inflation-linked bonds are taken into account in the calculation of the gross defined benefit obligations.
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In 2023, market data was adopted in full without levelling off percentages and the term of the market data was extended
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from 22 to 30 years.
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\u2022 Since 1 January 2020, the insurance risks related to death and disability are fully reinsured through an external reinsurance
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programme.
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\u2022 The KBC Pension Fund believes in a balanced ESG approach that allows improvement of the greenhouse gas intensity but
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also considers other environmental themes such as biodiversity and social and governance issues. As regards the
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management of the assets, the share of responsible investments came to around 89% at the end of December. The aim is for
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the KBC Pension Fund investment portfolio to be carbon-neutral by 2050. At the end of September 2023, the greenhouse gas
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intensity of the shares held in portfolio was roughly 40% of the MSCI World AC benchmark, for the corporate bonds held in
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portfolio it was roughly 36% of the Iboxx Euro Corporates benchmark and for the government bonds held in portfolio it was
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roughly 121% of the JPM EMU Government Bond benchmark, a decrease from 2019 of 56%, 40% and 25%, respectively.
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\u2022 As a result of the higher average interest rates, the pension reserves of participants are often higher than the retirement
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benefit obligations calculated as the present value of the guaranteed minimum pension capital under the defined
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contribution plan. In 2023, the net asset was therefore reduced by the difference between the retirement benefit obligations
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calculated in this way and the higher guaranteed minimum reserves and/or the pension reserves calculated using the
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assigned fund return. The difference at the end of 2023 was 41 million euros and has been added to \u2018Adjustments to asset
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ceiling limits\u2019, resulting in the net asset being reduced by this amount. As, in the previous year, the retirement benefit
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obligations for the defined contribution plan were expressed as the maximum between the present retirement benefit
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obligations and the guaranteed minimum reserves, interest rate sensitivity is now higher.
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\u2022 In the second quarter of 2023, the model was adjusted by replacing an external supplier\u2019s discount curve with a KBC curve
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that is based on Bloomberg data on the prices of AA-rated corporate bonds. If the same method had been used to determine
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the curve at the beginning of the year, the retirement benefit obligation would have been 25 million euros lower.
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\u2022 There are no significant defined benefit plans in the group\u2019s other core countries.
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Additional information on retirement benefit obligations (in millions of EUR)20232022202120202019
Changes in main headings in the main table
Defined benefit obligations2 7242 5803 3353 3873 212
Fair value of plan assets 2 9362 7463 2442 8492 791
Unfunded accrued/prepaid pension cost142153-128-537-457
Impact of changes in the assumptions used in the actuarial calculation of plan
assets and retirement benefit obligations
Impact on plan assets00000
Impact on retirement benefit obligations*149-825-35253250
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* Arising from defined benefit plans. A plus sign indicates an increase in the (absolute value of) the obligation, a minus sign a decrease.
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Additional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund
Composition (31-12-2023)
Equity instruments31%
Bonds55%
Real estate13%
Cash1%
of which illiquid assets17%
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Composition (31-12-2022)
Equity instruments37%
Bonds46%
Real estate14%
Cash3%
of which illiquid assets18%
Contributions expected in 2024 (in millions of EUR)42
Regulatory frameworkPension plans are registered in collective labour agreements and incorporated into a set of regulations.
Annual reporting of funding levels to supervisory authorities (FSMA/NBB). Any underfunding must be
reported immediately to the supervisory authorities.
Risks for KBCInvestment risk and inflation risk.
ALM policyThe hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps.
The return portfolio aims to generate an extra return.
Plan amendmentsA new version of the employer-funded defined contribution plan was introduced on 1 January 2019. All
employees who had been signed up to the defined benefit plan were given the one-time option of
switching to this new plan.
Curtailments and settlementsNot applicable.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.20%
\u2022 Expected rate of salary increase2.75%
\u2022 Expected inflation rate2.42%
\u2022 Expected rate of increase in pensions\u2013
\u2022 Weighted average duration of the obligations10 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate11.83%
\u2022 an increase of 1% in the expected inflation rate9.17%
\u2022 an increase that is 1% higher than the expected real 12.18%
increase in salary
\u2022 an increase of one year in life expectancy\u2013
The impact of the following assumptions has not been Decreasing mortality rates. Pension benefits are paid out
calculated:in capital, so longevity risk is immaterial.
Staff turnover rates: the impact of the changes remains limited.
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Additional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Contributions expected in 2024 (in millions of EUR)45
Regulatory frameworkPursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of
1.75% on employee and employer contributions.
Risks for KBCInvestment risk.
ValuationRetirement benefit obligations are measured on the basis of the accrued benefits on the reporting date,
making a projection of these benefits (at the rate of interest guaranteed by law) until the expected age
of retirement, and discounting the resulting benefits.
KBC offers two types of defined contribution plan: one that is financed through employee contributions
and one through employer contributions. The valuation of retirement benefit obligations for the
employer-funded defined contribution plan takes account of future contributions. However, it is not
taken into account for the valuation of the employee-funded defined contribution plan, because the
employer\u2019s obligation for that plan only relates to the guaranteed minimum interest rate.
Discounting methodBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are
converted into a zero coupon curve.
Key actuarial assumptions
\u2022 Average discount rate3.31%
\u2022 Weighted average duration of the obligations16 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2023 consequent on:
\u2022 a decrease of 1% in the discount rate19.0%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag776": { "value": "\n

\n

\n\n\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag777": { "value": "\n\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

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\n\n
Note 6.2: Leasing
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Finance lease receivables
Gross investment in finance leases, receivable7 8246 836
At not more than one year1 9251 378
At more than one but not more than five years4 5514 069
At more than five years1 3491 389
Unearned future finance income on finance leases627468
Net investment in finance leases7 1986 368
At not more than one year1 7661 226
At more than one but not more than five years4 1783 842
At more than five years1 2541 300
of which unguaranteed residual values accruing to the benefit of the lessor4136
Accumulated impairment for uncollectable lease payments receivable3135
Contingent rents recognised in the income statement110111
Operating lease receivables
Future aggregate minimum rentals receivable under non-cancellable operating leases694513
Contingent rents recognised in the income statement 10
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 KBC acts only to a limited extent as a lessee in operational and financial leasing.
\n
\u2022 Finance leases: KBC offers finance lease products ranging from equipment and vehicle leasing to real estate leasing. In
\n
Belgium, finance leases are typically sold through KBC group\u2019s branch network, and that channel is becoming increasingly
\n
important in Central Europe, too.
\n
\u2022 Operating leases: involve primarily full service car leases, which are sold through the KBC Bank and CBC Banque branch
\n
network and through an internal sales team. Full service car leasing activities are being further developed in Central Europe,
\n
too. The increased importance of leasing hybrid and all-electric vehicles supports the transition to green mobility, and the
\n
segment of (electric) company bicycles also continued to grow.
\n
\u2022 We report on estimated greenhouse gas emissions associated with lending, leasing and other activities and, in that context,
\n
have defined objectives for reducing the greenhouse gas intensity of our financial and operational car leasing. See \u2018Focus on
\n
the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation (the
\n
statutory auditor has not audited this section). More details can also be found in our Climate Report and our Sustainability
\n
Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag778": { "value": "\n
Note 5.8: Other liabilities
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Total2 6112 353
Retirement benefit obligations or other employee benefits9393
Accrued charges and deferred income385382
Salaries and social security charges531516
Lease liabilities6368
Other1 5391 294
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 For more information on retirement benefit obligations, see Note 5.9 (note that the amount recognised under \u2018Retirement
\n
benefit obligations or other employee benefits\u2019 in Note 5.8 relates to a broader scope than the amounts presented in Note
\n
5.9).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag779": { "value": "\n

\n

\n
Note 5.10: Parent shareholders\u2019 equity and additional tier-1 instruments
\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Quantities 31-12-202331-12-2022
Ordinary shares417 305 876417 169 414
of which ordinary shares that entitle the holder to a dividend payment408 508 807417 169 414
of which treasury shares8 801 3162
Additional information
Par value per share (in EUR)3.513.51
Number of shares issued but not fully paid up00
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Ordinary shares: ordinary shares of no nominal value. All ordinary shares carry voting rights and each share represents one
\n
vote. No participation certificates or non-voting shares have been issued. The shares are listed on Euronext Brussels.
\n
\u2022 Capital increases: the number of KBC Group NV shares went up by 136 462 in 2023 and by 285 822 in 2022, due to new shares
\n
being issued following the capital increases reserved for staff. For more information, see the \u2018Company annual accounts and
\n
additional information\u2019 section.
\n\n
\u2022 Treasury shares:
\n
\u25e6 On 10 August 2023, KBC Group NV announced a treasury share buyback programme with a view to dividing excess capital,
\n
for which it obtained the required permission from the ECB. An agent was mandated to repurchase KBC shares on the
\n
regulated market of NYSE Euronext Brussels on behalf of KBC Group NV until 31 July 2024, for a maximum of 1.3 billion euros.
\n
The shares are repurchased subject to the conditions stated in the authorisation granted by the General Meeting of 5 May
\n
2022. Under this authorisation, the Board of Directors is authorised to repurchase a maximum of 10% of the treasury shares
\n
under specific conditions and at a price that may not be lower than 1 euro or higher than 110% of the last closing price on
\n
Euronext Brussels preceding the date of acquisition. The programme can be put on hold, suspended or discontinued at
\n
any time if this is considered appropriate in view of KBC Group\u2019s strategy, its capital position or market conditions. Every
\n
week, we give an update of the share buyback programme by means of a press release and at www.kbc.com. In 2023, a
\n
total of 8 797 069 treasury shares were repurchased in several transactions for a total rounded amount of 497 million euros.
\n
\u25e6 On 31 December 2023, KBC group companies also held 4 247 KBC shares in portfolio, 4 245 of which serve to hedge
\n
outstanding derivatives on indices that include KBC Group shares.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Additional tier-1 (AT1) instruments (these securities are classified as equity instruments under IAS 32 and the coupon is treated
\n
as a dividend):
\n
\u25e6 In April 2018, KBC issued 1 billion euros in AT1 securities (a perpetual AT1 instrument with a seven year first-call date and a
\n
temporary write-down trigger should the common equity ratio fall below 5.125% and an initial coupon of 4.25% per annum,
\n
which is payable every six months).
\n
\u25e6 In February 2019, KBC issued 500 million euros in AT1 securities (a perpetual AT1 instrument with a five year first-call date
\n
and a temporary write-down trigger should the common equity ratio fall below 5.125% and an initial coupon of 4.75% per
\n
annum, which is payable every six months). Under CRR Article 78(1)(a), KBC asked the ECB for permission to call this
\n
instrument in March 2024. Under agreement EBA Q&A 2023_6791 of 15 September 2023, the instrument is disqualified as
\n
tier-1 capital in the solvency calculations as soon as the replacement instrument is issued (this placement occurred in early
\n
September; see below). This instrument was called on 5 March 2024.
\n
\u25e6 In September 2023, KBC issued 750 million euros in AT1 securities (a perpetual AT1 instrument with a first-call date of five
\n
years, a temporary write-down trigger should the common equity ratio fall below 5.125% and an initial coupon of 8.00%
\n
per annum, which is payable every six months).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag780": { "value": "\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Quantities 31-12-202331-12-2022
Ordinary shares417 305 876417 169 414
of which ordinary shares that entitle the holder to a dividend payment408 508 807417 169 414
of which treasury shares8 801 3162
Additional information
Par value per share (in EUR)3.513.51
Number of shares issued but not fully paid up00
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Treasury shares:
\n
\u25e6 On 10 August 2023, KBC Group NV announced a treasury share buyback programme with a view to dividing excess capital,
\n
for which it obtained the required permission from the ECB. An agent was mandated to repurchase KBC shares on the
\n
regulated market of NYSE Euronext Brussels on behalf of KBC Group NV until 31 July 2024, for a maximum of 1.3 billion euros.
\n
The shares are repurchased subject to the conditions stated in the authorisation granted by the General Meeting of 5 May
\n
2022. Under this authorisation, the Board of Directors is authorised to repurchase a maximum of 10% of the treasury shares
\n
under specific conditions and at a price that may not be lower than 1 euro or higher than 110% of the last closing price on
\n
Euronext Brussels preceding the date of acquisition. The programme can be put on hold, suspended or discontinued at
\n
any time if this is considered appropriate in view of KBC Group\u2019s strategy, its capital position or market conditions. Every
\n
week, we give an update of the share buyback programme by means of a press release and at www.kbc.com. In 2023, a
\n
total of 8 797 069 treasury shares were repurchased in several transactions for a total rounded amount of 497 million euros.
\n
\u25e6 On 31 December 2023, KBC group companies also held 4 247 KBC shares in portfolio, 4 245 of which serve to hedge
\n
outstanding derivatives on indices that include KBC Group shares.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag781": { "value": "\n

\n\n

\n\n

\n\n
Note 5.11: \u2018Non-current assets held for sale and disposal groups\u2019 and \u2018Liabilities associated with disposal groups\u2019
\n
(IFRS 5)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC Bank Ireland: Non-current assets held for sale and disposal groups 31-12-2022
and Liabilities associated with disposal groups (in millions of EUR)
ASSETS
Loans and advances to customers (excl. reverse repos)8 049
Consumer credit18
Mortgage loans7 938
Term loans84
Current account advances10
LIABILITIES
Deposits from customers and debt securities (excl. repos)1 929
Demand deposits303
Time deposits494
Savings accounts1 132
Deposits from credit institutions and investment firms (excl. repos)91
Of which repayable on demand35
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In October 2021, KBC Bank Ireland confirmed that it had entered into a legally binding agreement with Bank of Ireland relating
\n
to the sale of substantially all of KBC Bank Ireland\u2019s performing loan assets and its deposit book to Bank of Ireland Group (see
\n
Note 6.6 for more details). These sales resulted in a shift to the \u2018Non-current assets held for sale and disposal groups\u2019 and
\n
\u2018Liabilities associated with disposal groups\u2019 items The sale was finalised in February 2023.
\n
\u2022 Maximum credit exposure: the maximum credit risk associated with \u2018Non-current assets held for sale and disposal groups\u2019
\n
amounted to 8.0 billion euros at year-end 2022, of which 7.9 billion euros in collateral and other credit enhancements received.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

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\n\n

\n\n
Note 5.11: \u2018Non-current assets held for sale and disposal groups\u2019 and \u2018Liabilities associated with disposal groups\u2019
\n
(IFRS 5)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC Bank Ireland: Non-current assets held for sale and disposal groups 31-12-2022
and Liabilities associated with disposal groups (in millions of EUR)
ASSETS
Loans and advances to customers (excl. reverse repos)8 049
Consumer credit18
Mortgage loans7 938
Term loans84
Current account advances10
LIABILITIES
Deposits from customers and debt securities (excl. repos)1 929
Demand deposits303
Time deposits494
Savings accounts1 132
Deposits from credit institutions and investment firms (excl. repos)91
Of which repayable on demand35
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In October 2021, KBC Bank Ireland confirmed that it had entered into a legally binding agreement with Bank of Ireland relating
\n
to the sale of substantially all of KBC Bank Ireland\u2019s performing loan assets and its deposit book to Bank of Ireland Group (see
\n
Note 6.6 for more details). These sales resulted in a shift to the \u2018Non-current assets held for sale and disposal groups\u2019 and
\n
\u2018Liabilities associated with disposal groups\u2019 items The sale was finalised in February 2023.
\n
\u2022 Maximum credit exposure: the maximum credit risk associated with \u2018Non-current assets held for sale and disposal groups\u2019
\n
amounted to 8.0 billion euros at year-end 2022, of which 7.9 billion euros in collateral and other credit enhancements received.
\n

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Note 5.11: \u2018Non-current assets held for sale and disposal groups\u2019 and \u2018Liabilities associated with disposal groups\u2019
\n
(IFRS 5)
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC Bank Ireland: Non-current assets held for sale and disposal groups 31-12-2022
and Liabilities associated with disposal groups (in millions of EUR)
ASSETS
Loans and advances to customers (excl. reverse repos)8 049
Consumer credit18
Mortgage loans7 938
Term loans84
Current account advances10
LIABILITIES
Deposits from customers and debt securities (excl. repos)1 929
Demand deposits303
Time deposits494
Savings accounts1 132
Deposits from credit institutions and investment firms (excl. repos)91
Of which repayable on demand35
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In October 2021, KBC Bank Ireland confirmed that it had entered into a legally binding agreement with Bank of Ireland relating
\n
to the sale of substantially all of KBC Bank Ireland\u2019s performing loan assets and its deposit book to Bank of Ireland Group (see
\n
Note 6.6 for more details). These sales resulted in a shift to the \u2018Non-current assets held for sale and disposal groups\u2019 and
\n
\u2018Liabilities associated with disposal groups\u2019 items The sale was finalised in February 2023.
\n
\u2022 Maximum credit exposure: the maximum credit risk associated with \u2018Non-current assets held for sale and disposal groups\u2019
\n
amounted to 8.0 billion euros at year-end 2022, of which 7.9 billion euros in collateral and other credit enhancements received.
\n

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Note 6.1: Off-balance-sheet commitments and financial guarantees given and received
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Nominal amountProvisionNet exposureNominal ProvisionNet exposure
amount
Undrawn portion of credit lines granted
Stage 141 551 2041 53139 1341739 117
Stage 26 683 146 6708 077268 051
Stage 3 79 5 73511338
Total48 313 3948 27447 2625647 206
of which irrevocable credit lines27 856 2327 83326 6182726 591
Financial guarantees given
Stage 17 860 27 8597 60027 598
Stage 22 952 62 9473 13983 131
Stage 3 133 44 901194476
Total10 946 5110 89510 8585410 805
Other commitments given
Total1 421 11 4201 44041 436
Off-balance-sheet commitments and financial guarantees
Total60 680 9160 58959 56111459 447
\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 36 842 million euros for liabilities and 4 489 million
\n
euros for contingent liabilities (59 753 million euros and 5 291 million euros, respectively, in 2022). At year-end 2023, some 18.9
\n
billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the special
\n
estate of the covered bond programme (16.6 billion euros at year-end 2022).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner;
\n
see table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such
\n
as default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will
\n
organise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is
\n
primarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided
\n
in Note 4.3.
\n
\u2022 Collateral acquired through foreclosure came to 3 million euros in 2023 (4 million euros in 2022).
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Collateral received (which may be sold or repledgedFair value of collateral sold or
in the absence of default by the owner) (in millions of EUR)Fair value of collateral receivedrepledged
31-12-202331-12-202231-12-202331-12-2022
Financial assets42 21530 1265 2677 792
Equity instruments211622
Debt securities41 95929 8765 2657 790
Loans and advances23523400
Cash0000
Other0000
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 In the years 2016-2022, KBC contributed to the Single Resolution Fund (SRF) by means of irrevocable payment commitments
\n
(IPCs) in the amount of 90 million euros, which are fully covered by cash collateral. In line with industry practice, the following
\n
accounting treatment is applied to IPCs: (\u00b0) the amount of cash collateral is recognised as a financial asset and
\n
(\u00b0) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral
\n
as a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that
\n
interest is received on the amount outstanding. In a recent decision, the General Court of the EU ruled that in a scenario in
\n
which a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal
\n
in this case at the European Court of Justice before considering the potential implications on the accounting treatment of
\n
IPCs. The 90 million euros is deducted in the calculation of the common equity capital.
\n

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Note 6.2: Leasing
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(in millions of EUR)31-12-202331-12-2022
Finance lease receivables
Gross investment in finance leases, receivable7 8246 836
At not more than one year1 9251 378
At more than one but not more than five years4 5514 069
At more than five years1 3491 389
Unearned future finance income on finance leases627468
Net investment in finance leases7 1986 368
At not more than one year1 7661 226
At more than one but not more than five years4 1783 842
At more than five years1 2541 300
of which unguaranteed residual values accruing to the benefit of the lessor4136
Accumulated impairment for uncollectable lease payments receivable3135
Contingent rents recognised in the income statement110111
Operating lease receivables
Future aggregate minimum rentals receivable under non-cancellable operating leases694513
Contingent rents recognised in the income statement 10
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\u2022 KBC acts only to a limited extent as a lessee in operational and financial leasing.
\n
\u2022 Finance leases: KBC offers finance lease products ranging from equipment and vehicle leasing to real estate leasing. In
\n
Belgium, finance leases are typically sold through KBC group\u2019s branch network, and that channel is becoming increasingly
\n
important in Central Europe, too.
\n
\u2022 Operating leases: involve primarily full service car leases, which are sold through the KBC Bank and CBC Banque branch
\n
network and through an internal sales team. Full service car leasing activities are being further developed in Central Europe,
\n
too. The increased importance of leasing hybrid and all-electric vehicles supports the transition to green mobility, and the
\n
segment of (electric) company bicycles also continued to grow.
\n
\u2022 We report on estimated greenhouse gas emissions associated with lending, leasing and other activities and, in that context,
\n
have defined objectives for reducing the greenhouse gas intensity of our financial and operational car leasing. See \u2018Focus on
\n
the climate and the environment\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation (the
\n
statutory auditor has not audited this section). More details can also be found in our Climate Report and our Sustainability
\n
Report at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag91": { "value": "\n

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Note 6.3: Related-party transactions
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20232022
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR)diariescompaniesventuresOtherTotaldiariescompaniesventuresOtherTotal
Assets 161 100 25 0 287147107330287
Loans and advances 15 81 0 0 96158900104
Equity instruments (including investments
in associated companies and joint 146 19 25 0 19113119330184
ventures)
Other 0 0 0 0 000000
Liabilities 45 80 0 677 80354740593721
Deposits 41 23 0 674 73854100590654
Other financial liabilities 0 0 0 0 000000
Other 4 58 0 3 651630367
Income statement 7-3 0 1 6-1-20-1-3
Net interest income 0 1 0 0 101000
Interest income 0 2 0 0 202002
Interest expense-1-1 0 0-20-100-1
Insurance revenues before reinsurance 0 0 0 0 000000
Insurance service expenses before 0 0 0 0 000000
reinsurance
Dividend income 10 0 0 4 1441049
Net fee and commission income 0 0 0 2 210023
Fee and commission income 0 0 0 2 210023
Fee and commission expense 0 0 0 0 000000
Other net income 0-1 0 0-11-1000
Total operating expenses excluding bank -3-2 0-5-10-7-20-7-16
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 150 1510005050
Received by the group 0 0 0 0 000000
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\n\n
Transactions with key management (members of the Board of Directors and Executive Committee of
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KBC Group NV) (in millions of EUR)*20232022
Total*1513
Breakdown by type of remuneration
Short-term employee benefits1211
Post-employment benefits22
Defined benefit plans00
Defined contribution plans22
Other long-term employee benefits00
Termination benefits00
Share-based payments00
Stock options (units)
At the beginning of the period00
Granted00
Exercised00
Composition-related changes00
At the end of the period00
Advances and loans granted to key management and partners11
\n\n\n\n
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* Remuneration to key management or partners of the consolidating company on the basis of their activity in that company, its subsidiaries and associated companies, including the
\n
amount of retirement pensions granted to former key management staff on that basis.
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\u2022 The \u2018Subsidiaries\u2019 heading in the first table includes transactions with unconsolidated subsidiaries (transactions with
\n
consolidated subsidiaries have already been eliminated from the consolidated financial statements).
\n
\u2022 The \u2018Other\u2019 heading in the first table includes KBC Ancora, Cera and MRBB.
\n
\u2022 All related-party transactions occur at arm\u2019s length.
\n\n
\u2022 Key management comprises the members of the Board of Directors and Executive Committee of KBC Group NV. More detailed
\n
information on remuneration paid to key management staff is provided in the \u2018Corporate governance statement\u2019 section.
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\u2022 There were no significant impairment charges vis-\u00e0-vis related parties.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag92": { "value": "\n

\n\n
Transactions with key management (members of the Board of Directors and Executive Committee of
\n
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KBC Group NV) (in millions of EUR)*20232022
Total*1513
Breakdown by type of remuneration
Short-term employee benefits1211
Post-employment benefits22
Defined benefit plans00
Defined contribution plans22
Other long-term employee benefits00
Termination benefits00
Share-based payments00
Stock options (units)
At the beginning of the period00
Granted00
Exercised00
Composition-related changes00
At the end of the period00
Advances and loans granted to key management and partners11
\n\n\n\n
\n
* Remuneration to key management or partners of the consolidating company on the basis of their activity in that company, its subsidiaries and associated companies, including the
\n
amount of retirement pensions granted to former key management staff on that basis.
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\u2022 Key management comprises the members of the Board of Directors and Executive Committee of KBC Group NV. More detailed
\n
information on remuneration paid to key management staff is provided in the \u2018Corporate governance statement\u2019 section.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag93": { "value": "KBC Group", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag450": { "value": "NV", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag94": { "value": "\n
Note 6.4: Statutory auditor\u2019s remuneration
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Statutory auditor\u2019s remuneration (PwC, in EUR)20232022
KBC Group NV and its subsidiaries
Standard audit services 8 547 0388 524 658
Other services
Other certifications1 007 482892 844
Tax advice00
Other non-audit assignments1 3512 225
KBC Group NV (alone)
Standard audit services237 914570 825
Other services440 228250 890
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Note 6.5: Subsidiaries, joint ventures and associated companies
\n
KBC Group: main companies included in the scope of
\n
consolidation at year-end 2023
\n
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Share of
capital held
Companyat group Business
CompanyRegistered officenumberlevel (in %)unit *Activity
KBC Bank (group)
KBC Bank NVBrussels \u2013 BE0462.920.226100.00BEL/GRPcredit institution
CBC BANQUE SANamur \u2013 BE0403.211.380100.00BELcredit institution
\u010ceskoslovensk\u00e1 Obchodn\u00e1 Banka a.s.Bratislava \u2013 SK--100.00IMAcredit institution
\u010ceskoslovensk\u00e1 Obchodn\u00ed Banka a.s.Prague \u2013 CZ--100.00CZRcredit institution
KBC Asset Management NVBrussels \u2013 BE0469.444.267100.00BELasset management
KBC Autolease NVLeuven \u2013 BE0422.562.385100.00BELleasing
KBC Commercial Finance NVBrussels \u2013 BE0403.278.488100.00BELfactoring
KBC IFIMA SALuxembourg \u2013 LU--100.00GRPFinance
KBC Securities NVBrussels \u2013 BE0437.060.521100.00BELstockbroker
K&H Bank Zrt.Budapest \u2013 HU--100.00IMAcredit institution
Loan Invest NVBrussels \u2013 BE0889.054.884100.00BELsecuritisation
United Bulgarian Bank ADSofia \u2013 BG--99.96IMAcredit institution
KBC Insurance (group)
KBC Insurance NVLeuven \u2013 BE0403.552.563100.00BEL/GRPinsurance company
ADD NVHeverlee \u2013 BE0406.080.305100.00BELinsurance broker
KBC Group Re SALuxembourg \u2013 LU--100.00GRPreinsurance company
\u010cSOB Poji\u0161t\u2019ovna a.s.Pardubice \u2013 CZ--100.00CZRinsurance company
\u010cSOB Poist\u2019ov\u0148a a.s.Bratislava \u2013 SK--100.00IMAinsurance company
DZI (group)Sofia \u2013 BG--100.00IMAinsurance company
Groep VAB NVZwijndrecht \u2013 BE0456.920.676100.00BELdriving school/roadside
assistance
K&H Biztos\u00edt\u00f3 Zrt.Budapest \u2013 HU--100.00IMAinsurance company
KBC group
DISCAI NVBrussels \u2013 BE0773.435.537100.00GRPsoftware company
KBC Group NVBrussels \u2013 BE0403.227.515100.00GRPbank-insurance holding
company
KBC Bank (group)various locations--100.00variouscredit institution
KBC Global Services NVBrussels \u2013 BE0772.332.707100.00GRPcost-sharing structure
KBC Insurance (group)various locations--100.00variousinsurance company
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* BEL: Belgium Business Unit; CZR: Czech Republic Business Unit: IMA: International Markets Business Unit; GRP = Group Centre.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

\n
\u2022 The KBC group\u2019s legal structure has one single entity \u2013 KBC Group NV \u2013 in control of two underlying companies, viz. KBC Bank
\n
NV and KBC Insurance NV, as well as companies such as DISCAI NV and KBC Global Services NV. KBC Bank and KBC Insurance
\n
have several subsidiaries and sub-subsidiaries. A complete list of group companies (included in or excluded from the scope
\n
of consolidation) is provided at www.kbc.com > About us > Our structure.
\n\n
\u2022 All (material) entities (including structured entities (SPVs)) over which the consolidating entity exercises, directly or indirectly,
\n
exclusive control are consolidated according the method of full consolidation. To assess whether or not structured entities
\n
have to be consolidated, KBC uses the principles set out in IFRS 10, as well as thresholds for inclusion in consolidation.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 Disclosures of interests in other entities (IFRS 12)
\n
- Significant judgements and assumptions
\n
\u25e6 In general, funds managed by KBC are not included in the scope of consolidation, as they do not meet the three criteria
\n
of control (power, exposure to a variable return and ability to use such power to affect those returns).
\n
\u25e6 Joint entities in which KBC does not hold 50% of the share capital are classified as joint ventures, since it has joint
\n
control over these entities based on shareholder agreements. Based on the Articles of Association and/or shareholder
\n
agreements, voting rights in (and therefore the control of) the joint venture are spread evenly across the different
\n
shareholders and decisions may only be taken by unanimity.
\n
- Interests in subsidiaries
\n
\u25e6 For the vast majority of the entities, the voting rights are materially equal to the ownership rights.
\n
\u25e6 Pursuant to the joint capital decision, specific pillar-II levels have been set to ensure that certain minimum capital ratios
\n
are respected, which impose certain restrictions on the repatriation of capital and distribution of dividends.
\n
\u25e6 With regard to Loan Invest NV, KBC is exposed to loan losses on the mortgage portfolio and, therefore, recognises
\n
impairment losses on them where necessary.
\n
- Interests in unconsolidated structured entities
\n
\u25e6 KBC Bank NV is arranger and dealer of a number of 40-billion-euro medium term notes programmes issued by 19
\n
unconsolidated structured entities established for that purpose. These entities were established between 2006 and
\n
2016 under the Irish Companies Act 2014 as an Irish public limited company or an Irish private limited company. Their
\n
primary business is to raise money by issuing notes in order to buy financial assets (such as securities, bonds and
\n
deposits) and to enter into related derivative and other contracts. They provide investment opportunities for clients by
\n
providing economies of scale, a diversification of credit risk and a high level of granularity. Each structured entity has
\n
a prospectus that was approved by the Central Bank of Ireland (available at www.kbc.be/prospectus/spv). However,
\n
the structured entities are not consolidated because they fail to meet the three criteria for consolidation (power,
\n
exposure to a variable return and ability to use such power to affect those returns). At year-end 2023, the assets under
\n
management at these entities amounted to 5.4 billion euros.
\n
\u25e6 Sponsored unconsolidated structured entities are defined as structured entities where KBC or one of its subsidiaries
\n
acts as arranger of the issuance programme, but where the decision-making power of the entities does not reside with
\n
KBC or one of its subsidiaries. As a result, these entities are not consolidated.
\n
\u25e6 In 2023, KBC had received income from unconsolidated structured entities in the form of management fees (17 million
\n
euros) and accounting fees (1 million euros).
\n
\u25e6 At year-end 2023, KBC held 1.8 billion euros\u2019 worth of notes issued by the unconsolidated structured entities. Its liabilities
\n
towards the unconsolidated structured entities amounted to 0.9 billion euros and comprised mainly time deposits (0.9
\n
billion euros).
\n
\u25e6 Any potential decrease in the value of the notes is passed on to the end-client, which means it will have no impact on
\n
KBC.
\n
\u2022 At year-end 2023, no group companies were active in the extractive industry. As a result, no consolidated report on payments
\n
to governments has been prepared (see Art.3:8 \u00a7 1 of the Companies and Associations Code).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag451": { "value": "KBC Group NV", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag96": { "value": "\n
\u2022 All (material) entities (including structured entities (SPVs)) over which the consolidating entity exercises, directly or indirectly,
\n
exclusive control are consolidated according the method of full consolidation. To assess whether or not structured entities
\n
have to be consolidated, KBC uses the principles set out in IFRS 10, as well as thresholds for inclusion in consolidation.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag97": { "value": "\n

\n
Note 6.7: Risk management and capital adequacy
\n
Capital management is a key management process relating to all decisions on the level and composition of our capital, both for
\n
banking and for insurance. It covers all instruments that are positioned to absorb losses in going concern and/or gone concern
\n
situations. Capital management aims to achieve the best possible balance between regulatory requirements, investor
\n
expectations, rating agencies\u2019 views and management ambitions. Ultimate accountability for capital management lies with the
\n
Board of Directors. Capital management entails a broad scope of activities covering strategic topics (such as defining policies,
\n
targets, etc.), frameworks and models (e.g., for regulatory capital, internal capital, cost of equity, measuring performance, etc.),
\n
planning and allocation (e.g., allocating capital to business, planning capital instrument issuances, forecasting capital ratios,
\n
etc.), implementation (e.g., dividends, capital transactions) and monitoring (including current solvency positions at various levels,
\n
compliance with group policies and regulatory requirements). ICAAP (Internal Capital Adequacy Assessment Process) consists of
\n
numerous business and risk processes that together contribute to the aim of being adequately capitalised at all times in view of
\n
our risk profile and the quality of our risk management and control environment. In addition to the integrated approach at group
\n
level, KBC Insurance and its insurance and reinsurance subsidiaries conduct an Own Risk and Solvency Assessment (ORSA) on a
\n
regular basis, in accordance with Solvency II requirements.
\n
We report the solvency based on IFRS data and according to the rules imposed by the regulator.
\n
\u2022 For the KBC group and KBC Bank, this implies that we calculate the solvency ratios based on CRR/CRD. KBC began applying
\n
the transitional provisions for IFRS 9 and certain tier-2 instruments on 30 June 2020. KBC has received authorisation from the
\n
regulator to apply a risk weighting to the participation in KBC Insurance (Danish compromise method) at KBC group level. The
\n
KBC group and KBC Bank are subject to minimum solvency ratios.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of the KBC group must be 10.92% (fully loaded) at
\n
year-end 2023. This includes the pillar 1 minimum requirement (4.5%), the pillar 2 requirement (1.05 set by the ECB following its
\n
supervisory review and evaluation process) and the buffer requirements (5.38% set by the local competent authorities in KBC\u2019s
\n
core markets). At year-end 2023, the fully loaded common equity ratio came to 15.2% (see the \u2018How do we manage our
\n
capital?\u2019 section for more information). At year-end 2023, the transitional common equity ratio came to 13.8%, which
\n
represented a capital buffer of 3.4% relative to the minimum requirement of 10.45%.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of KBC Bank must be 10.50% (transitional) at year-
\n
end 2023. At year-end 2023, the transitional common equity ratio was 13.4%.
\n
\u2022 The solvency of KBC Insurance is calculated on the basis of Solvency II (the minimum requirement is 100%). At year-end 2023,
\n
the Solvency II ratio came to 206% relative to the minimum requirement of 100%.
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
KBC groupKBC Bank
(consolidated)(consolidated)KBC Insurance
Key solvency figures for the KBC group, CRR/CRDCRR/CRD(consolidated)
KBC Bank and KBC Insurance (in millions of EUR)transitionaltransitionalSolvency II
31-12-202331-12-202231-12-202331-12-202231-12-202331-12-2022
Total regulatory capital, after profit appropriation19 76818 74217 95217 5164 1303 721
Tier-1 capital17 38916 97415 57315 7493 6293 220
Common equity15 63915 47413 82314 249\u2013\u2013
Parent shareholders\u2019 equity (after deconsolidating KBC 18 20916 98215 45015 6183 3022 157
Insurance for the KBC group)
Solvency adjustments-2 571-1 508-1 627-1 3703271 063
Additional going concern capital 11 7501 5001 7501 500\u2013\u2013
Tier-2 capital 22 3791 7672 3791 768501501
Total weighted risk volume (RWA) 3113 029109 966103 192100 285\u2013\u2013
Credit risks88 04284 98888 04284 988\u2013\u2013
Market risks2 1163 1322 1163 132\u2013\u2013
Operational risks13 03412 16613 03412 166\u2013\u2013
Insurance risks9 1339 133\u2013\u2013\u2013\u2013
Holding-company activities and elimination of intragro up704548\u2013\u2013\u2013\u2013
transctiaons
Solvency capital requirement (insurance)\u2013\u2013\u2013\u20132 0051 833
Common equity ratio (group, bank)13.8%14.1%13.4%14.2%\u2013\u2013
Solvency II ratio (insurance)\u2013\u2013\u2013\u2013206%203%
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n
1 Includes perpetual subordinated loans with fully discretionary, non-cumulative interest payments. The securities also have a loss absorption mechanism (i.e. a temporary write-down trigger
\n
should the common equity tier-1 ratio fall below 5.125%). Also see Note 5.10.
\n
2 Includes subordinated loans with a fixed maturity date where principal and interest payments cannot be cancelled in a going concern.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
3 Supervision of the RWA internal models\u2019 compliance with the approval criteria as provided for in the standards imposed by the regulator does not come under the responsibility of the
\n
statutory auditor.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u2022 More detailed information is provided in the \u2018How do we manage our capital?\u2019 section of this report and in KBC\u2019s Risk Report.
\n
\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
\n
composition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit
\n
risk\u2019). The information required in relation to risks is provided in those parts of the \u2018How do we manage our risks?\u2019 section which
\n
have been audited by the statutory auditor and which constitute part of the financial statements.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag98": { "value": "\n
Note 6.8: Post-balance-sheet events
\n
Significant non-adjusting events between balance sheet date and the date on which the financial statements were approved
\n
for publication by the Board of Directors (14 March 2024):
\n
\u2022 On 5 March 2024 KBC Group NV announced to call the Additional Tier-1 Securities (ISIN:BE0002638196) issued in 2019 (see Note
\n
5.10).
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag99": { "value": "\n
Note 6.9: General information on the company
\n
\u2022 Name: KBC Group.
\n
\u2022 Incorporated: 9 February 1935 as the Kredietbank; the present name dates from 2 March 2005.
\n
\u2022 Country of incorporation: Belgium.
\n
\u2022 Registered office: Havenlaan 2, 1080 Brussels, Belgium.
\n
\u2022 VAT: BE 0403.227.515.
\n
\u2022 RLP: Brussels.
\n
\u2022 Website: https://www.kbc.com
\n
\u2022 E-mail address reserved for shareholders and bondholders: IR4U@kbc.be
\n
\u2022 Legal form:
\n
naamloze genoteerde vennootschap
\n
(listed company with limited liability) under Belgian law. The company is a
\n
mixed financial holding company that is subject to the prudential supervision of the National Bank of Belgium and the
\n
European Central Bank.
\n
\u2022 Life: undefined.
\n
\u2022 Object (Article 2 of the Articles of Association, which are available at www.kbc.com):
\n
The company has as its object the direct or indirect ownership and management of shareholdings in other companies,
\n
including but not restricted to credit institutions, insurance companies and other financial institutions.
\n
The company also has as object to provide services to third parties, either for its own account or for the account of others,
\n
including to companies in which the company has an interest \u2013 either directly or indirectly \u2013 and to (potential) clients of those
\n
companies.
\n
The object of the company is also to acquire in the broadest sense of the word (including by means of purchase, hire and
\n
lease), to maintain and to operate resources, and to make these resources available in the broadest sense of the word
\n
(including through letting and granting rights of use) to the beneficiaries referred to in the second paragraph.
\n
In addition, the company may function as an intellectual property company responsible for, among other things, the
\n
development, acquisition, management, protection and maintenance of intellectual property rights, as well as for making
\n
these rights available, granting rights of use in respect of these rights and/or transferring these rights.
\n
The company may also perform all commercial, financial and industrial transactions that may be useful or expedient for
\n
achieving the object of the company and that are directly or indirectly related to this object. The company may also by means
\n
of subscription, contribution, participation or in any other form whatsoever participate in all companies, businesses or
\n
institutions that have a similar, related or complementary activity.
\n
In general, the company may, both in Belgium and abroad, perform all acts which may contribute to the achievement of its
\n
object.
\n
\u2022 Documents open to public inspection: the Articles of Association of the company can be found at the Registry of the Dutch-
\n
speaking division of the Brussels Business Court and at www.kbc.com and www.notaris.be/statuten. The financial statements,
\n
the annual report and the statutory auditor\u2019s reports regarding the financial statements are filed with the National Bank of
\n
Belgium and are available at www.kbc.com. The annual report can also be obtained from the company\u2019s registered office
\n
and will be sent to those requesting it. Extracts of minutes concerning decisions on the appointment and the termination of
\n
the offices of members of the Executive Committee and the Board of Directors are published in the appendices to the Belgian
\n
Official Gazette. Financial reports about the company are published in the financial press and/or on www.kbc.com.
\n
Convening notices of general meetings of shareholders are published in the Belgian Official Gazette, in at least one national
\n
newspaper, in the media and on www.kbc.com.
\n
\u2022 For information on the general meeting of shareholders and the right of shareholders to take part in such meetings, see Article
\n
23 et seq. of the Articles of Association, which are available at www.kbc.com.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "kbc:DisclosureOfGeneralInformationOnCompanyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag100": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "Tag101": { "value": "Havenlaan 2, 1080 Brussels, Belgium", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00" } }, "footnote1": { "value": "
\u2018Interest paid\u2019 and \u2018Interest received\u2019 in this overview are the equivalent of the \u2018Interest expense\u2019 and \u2018Interest income\u2019 items in the consolidated income statement. Given the large
\n
number of underlying contracts that generate interest expense and interest income, it would take an exceptional administrative effort to establish actual cashflows. Moreover, it is
\n
reasonable to assume that actual cashflows for a bank-insurance company do not differ much from the accrued interest expense and accrued interest income, as most rate products
\n
pay interest regularly within the year.
", "dimensions": { "concept": "xbrl:note", "noteId": "footnote1", "language": "en" } } } }