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\u2022 The overall impact on the net result of fluctuations in the exchange rates of the main non-euro currencies was \u2013 on balance \u2013
\n
limited to -56 million euros (due to the depreciation of the Czech koruna and the Hungarian forint against the euro).
\n
\n\n
Effects of changes in foreign exchange rates
\n
\n

\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.
\n\n\n\n\n\n\n\n
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", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag669": { "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 (ALM).
\n
Managing market risk in non-trading
\n
activities
\n
AUDITED
\n
In the area of market risk in the non-trading activities, the
\n
ExCo is supported by the Group Asset and Liability
\n
Committee (GALCO), which is to provide assistance in the
\n
area of (integrated) balance sheet management at group
\n
level. The governance, rules and procedures and how asset
\n
and liability risk management is performed throughout the
\n
group are outlined in the Non-Trading Market Risk
\n
Management Framework. Its implementation is monitored by
\n
the Market Non-Trading Risk Competence Centre of Group
\n
Risk. Within the risk function, the ALM & Liquidity Risk Council,
\n
chaired by the CRO Markets & Treasury, aims to establish,
\n
facilitate, promote and support the solid and efficient
\n
integration of all tasks assigned to the local and group risk
\n
departments covering ALM and liquidity risks.
\n
The building blocks for managing
\n
market risk in non-trading activities
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises
\n
described in the \u2018Components of sound risk management\u2019
\n
section apply to the non-trading market risk management
\n
context (such as the Risk Scan, the NAPP and the collection
\n
of risk signals). Within the Framework, deep dives (in-depth
\n
analyses) are performed to identify specific risks related to
\n
the market (non-trading) activities and their materiality.
\n
Additionally, the key risk drivers for ALM risk for KBC are
\n
determined and updated annually and regulatory
\n
developments are monitored on a continuous basis.
\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 prepayments, 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: we pursue a medium
\n
risk appetite for non-trading market risk. Limits cover all
\n
material market risks resulting from the ALM activities,
\n
being interest rate risk, equity risk, real estate risk and
\n
foreign exchange risk.
\n
\u2022 Risk analysis, reporting, response and follow-up: besides
\n
regulatory reporting, structural reporting to the GALCO is
\n
performed. The reporting process includes a sign-off
\n
process to ensure data and processing accuracy.
\n

\n\n\n\n

\n\n\n\n

\n\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 interest rate risk positions separately for the
\n
banking and insurance activities.
\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
Impact of a parallel 10-basis-point increase in the swap1 curve
for the KBC group, impact on value2(in millions of EUR)20242023
Banking-55-45
Insurance2011
Total-35-33
\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 banking activities, two other methodologies to
\n
measure interest rate sensitivity, which are comparable
\n
across institutions, are the outlier stress test (SOT) on
\n
Economic Value of Equity (EVE) and the outlier stress test
\n
(SOT) on Net Interest Income (NII), both calculated according
\n
to the 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, the SOT EVE
\n
came to -5.20% of tier-1 capital at year-end 2024. This is well
\n
below the -15% threshold, which is monitored by the
\n
European Central Bank and indicates that the overall interest
\n
rate sensitivity of KBC\u2019s balance sheet is limited.
\n
The SOT EVE is complemented by the SOT NII, which
\n
measures the impact of two scenarios (parallel up and down)
\n
on NII, assuming a constant balance sheet. The impact of the
\n
worst-case scenario on NII is also set off against tier-1
\n
capital. According to this measure, the interest rate
\n
sensitivity of KBC is limited too: it came to -1.55% at year-end
\n
2024, compared to the 5% outlier threshold used by the
\n
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 Risk Report.
\n
Concerning the group\u2019s insurance activities, the fixed-
\n
income investments for the Non-life reserves are invested
\n
with the aim of matching the projected pay-out patterns for
\n
claims, based on extensive actuarial analysis.
\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
via a cashflow-matching policy, which is applied to that
\n
portion of the Life insurance portfolios covered by fixed-
\n
income securities. Unit-linked Life insurance investments
\n
(class 23) are not dealt with here, since this activity does not
\n
entail any market risk 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
Expected cashflows (not discounted),
Life insurance activities (in millions of EUR)0\u20131 year1\u20132 years2-3 years3-4 years4-5 years>5 yearsTotal
31-12-2024
Fixed-income assets backing liabilities, 1 6299429241 0728958 50713 969
guaranteed component
Equity------964
Property------286
Other (no maturity)------182
Liabilities, guaranteed component1 1209419697227149 94514 410
Difference in time-sensitive expected cashflows5091-45350181-1 438-422
Mean duration of assets5.67 years
Mean duration of liabilities7.35 years
31-12-2023
Fixed-income assets backing liabilities, 1 7877419327871 0448 22513 516
guaranteed 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
\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. We adopt a
\n
liability-driven ALM approach focused on mitigating the
\n
interest rate risk in accordance with KBC\u2019s risk appetite. For
\n
the remaining interest rate risk, we adhere to a policy that
\n
takes into account the possible negative consequences of a
\n
sustained decline in interest rates, and have built up
\n
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
Breakdown of the reserves for non-unit-linked Life insurance by
guaranteed interest rate, insurance activities31-12-202431-12-2023
5.00% and higher3%3%
More than 4.25% up to and including 4.99%5%6%
More than 3.50% up to and including 4.25%3%4%
More than 3.00% up to and including 3.50%9%9%
More than 2.50% up to and including 3.00%4%3%
2.50% and lower74%73%
0.00%2%2%
Total 100%100%
\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
Exposure to bonds at year-end 2024, KBC Group, carrying value
\n
\n
(in millions of EUR)
\n
AUDITED
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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 tradingTotal2023points1
Sovereign 41 95518 1653 36063 48059 509-2 943
Of which2:
Czech Republic11 2361 9771 75514 96815 611-708
Belgium6 5685 32583312 72711 367-704
France3 9342 8091096 8515 451-290
Slovakia3 5779923074 8764 207-245
Hungary2 5151 203503 7673 066-106
Non-sovereign38 1214 3741 66114 22511 908-388
\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 -57 million euros at year-end 2024).
\n
2 Top 5 largest sovereign portfolios.
\n
3 An immaterial portfolio held at fair value through profit or loss is included in the Non-sovereign total.
\n
Equity risk
\n
We define equity risk as the risk due to changes in the level or
\n
in the volatility of equity prices. KBC holds equity portfolios
\n
for several purposes. The main exposure to equity is within
\n
our insurance business, where the ALM strategies are based
\n
on a risk-return evaluation, taking into account the market
\n
risk attached to open equity positions. The vast majority of
\n
the equity portfolio is held as an economic hedge for
\n
long-term liabilities of the insurance company. A limited
\n
tactical portfolio (99 million euros) aims to contribute to the
\n
financial objectives through dividend payouts and capital
\n
gains. Smaller equity portfolios are also held by other group
\n
entities, where the portfolios are of a strategic nature, such
\n
as participations in relation to the execution of KBC\u2019s
\n
business model. The sectoral repartition of the portfolio is
\n
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
Equity portfolio of the KBC groupBanking activitiesInsurance activitiesGroup
31-12-202431-12-202331-12-202431-12-202331-12-202431-12-2023
In billions of EUR*0.240.231.421.391.661.63
of which unlisted0.230.220.240.180.470.4
\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
Impact of a 25% drop in equity prices, impact on value
(in millions of EUR)20242023
Banking activities-60-59
Insurance activities-355-348
Total-415-407
\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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)31-12-202431-12-202331-12-202431-12-2023
Banking activities--2219
Insurance activities-12339212
Total-12361231
\n\n
\n

\n\n\n\n

\n\n\n\n

\n\n
Real estate risk
\n
We define real estate risk as the risk due to changes in the
\n
level or in the volatility of real estate prices. Real estate that
\n
is exclusively used by KBC and its subsidiaries for their own
\n
activities are excluded here. The group\u2019s real estate
\n
businesses hold a limited real estate investment portfolio.
\n
KBC Insurance also holds a diversified real estate portfolio,
\n
as an investment for Non-life reserves and long-term Life
\n
activities. The real estate exposure is viewed as a long-term
\n
hedge against inflation risks and as a way of optimising the
\n
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
Impact of a 25% drop in real estate prices, impact on value (in millions of EUR)20242023
Bank portfolios-116-94
Insurance portfolios-120-107
Total-235-201
\n\n
\n
Inflation risk
\n
We define inflation risk as the risk due to changes in the level
\n
or in the volatility of inflation rates. Inflation can impact a
\n
financial company in many ways, for instance via changes in
\n
interest rates or operational costs. Inflation in general
\n
therefore is not easily quantifiable as a market risk concept.
\n
However, certain financial products or instruments have a
\n
direct link with inflation and their value is directly impacted
\n
by a change in market expectations. KBC Bank uses
\n
inflation-linked bonds as an opportunity to diversify its asset
\n
portfolio. At KBC Insurance, inflation risk relates specifically
\n
to workmen\u2019s compensation insurance, where, particularly in
\n
the case of permanent or long-term disabilities, an annuity
\n
benefit is paid to the insured person (with the annuity being
\n
linked to inflation by law). KBC Insurance partly mitigates the
\n
risks by investing in inflation-linked bonds and complements
\n
its inflation hedging programme by investing in real estate
\n
and shares, as these assets are traditionally correlated with
\n
inflation and do not have a maturity date.
\n
The banking business holds a portfolio of inflation-linked
\n
bonds with a sensitivity to inflation (BPI) of 5.6 million euros (a
\n
0.10% move in inflation expectations) at the end of 2024. For
\n
the insurance activities the BPI of liabilities was calculated at
\n
-4.9 million euros (increasing the liabilities), against which
\n
inflation-linked bonds are held with a 4.2-million-euro BPI,
\n
supplemented with a 33-million-euro real estate portfolio.
\n
The sensitivity of liabilities to inflation is only known with a
\n
quarter\u2019s delay. Therefore, the insurance figures in this
\n
section are based on the third quarter of 2024.
\n
Foreign exchange risk
\n
We define foreign exchange risk as the risk due to changes in
\n
the level or in the volatility of currency exchange rates. We
\n
pursue a prudent policy as regards our non-trading currency
\n
exposure. Material foreign exchange exposure in the ALM
\n
books of banking entities with a trading book is transferred
\n
via internal deals to the trading book, where it is managed
\n
within the allocated trading limits. The foreign exchange
\n
exposure of banking entities without a trading book and of
\n
insurance and other entities has to be hedged, if material.
\n
However, non-euro-denominated equity holdings in the
\n
insurance portfolio are not hedged, as foreign exchange
\n
volatility is considered part of the investment 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
Impact of a 10% decrease in currency value* BankingInsurance
(in millions of EUR)31-12-202431-12-202331-12-202431-12-2023
CZK-217-209-32-31
HUF-74-85-10-9
BGN-100-93-25-22
USD-36-59-52
\n\n
\n
* Exposure for currencies where the impact exceeds 10 million euros in Banking or Insurance.
\n

\n\n\n\n

\n\n\n\n

\n\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
Hedging interest rate risks
\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 only the
\n
credit spread profile is relevant. Liabilities can include KBC\u2019s
\n
own issues. Micro hedges are either fair-value or cashflow
\n
based.
\n
Hedging foreign exchange risks
\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
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

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

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

\n\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
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 GALCO.
\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 equity
\n
prices that fall. At KBC, we use this capital sensitivity as a
\n
common denominator to measure the vulnerability of the
\n
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\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 CET1 ratio), IFRS impact caused by:31-12-202431-12-2023
+100-basis-point parallel shift in interest rates-0.1%-0.1%
+100-basis-point parallel shift in spread-0.4%-0.2%
-25% in equity prices-0.2%-0.1%
\n\n\n\n\n\n
\n
The table shows that the sensitivity of capital to market
\n
movements is limited. The sensitivity to spread volatility has
\n
increased over the past year as KBC has opted to increase
\n
the part of its bond portfolio that is booked at fair value
\n
through other comprehensive income. However, the majority
\n
of the 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\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
AUDITED
\n
In the area of liquidity risk, the ExCo is supported by the
\n
Group Asset and Liability Committee (GALCO), which
\n
management at group level, including liquidity and funding.
\n
The governance, rules and procedures and how asset and
\n
liability risk management is performed throughout the group
\n
are outlined in the Liquidity Risk Management Framework. Its
\n
implementation is monitored by the Liquidity Risk
\n
Competence Centre of Group Risk. Within the risk function,
\n
the ALM & Liquidity Risk Council aims to establish, facilitate,
\n
tasks assigned to the local and group risk departments.
\n
The building blocks for managing
\n
liquidity risk
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises described
\n
in the \u2018Components of sound risk management\u2019 section
\n
apply to the liquidity risk management context (such as the
\n
Risk Scan, the NAPP and the collection of risk signals).
\n
\u2022 Risk measurement: identified liquidity risks are measured
\n
by means of both regulatory metrics such as the Liquidity
\n
Coverage Ratio (158% in 2024) and the Net Stable Funding
\n
Ratio (139%), and internal metrics on, for example, 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 GALCO monitors
\n
the development of the liquidity risk profile in relation to
\n
the limits. KBC\u2019s low risk profile for liquidity risk is illustrated
\n
by the fact that KBC is well above the thresholds for
\n
regulatory and internal liquidity measures. The GALCO
\n
decides on and periodically reviews a framework of limits,
\n
early warning levels and policies on liquidity risk activities
\n
that is consistent with the group\u2019s risk appetite.
\n
\u2022 Risk analysis, reporting, response and follow-up: to
\n
mitigate day-to-day and intraday liquidity risk, group-
\n
wide trends in funding liquidity and funding needs are
\n
monitored continuously by the Group Treasury and Risk
\n
function. A Liquidity Contingency Plan drafted by the
\n
Group Treasury function is in place to address possible
\n
liquidity crisis situations and is tested at 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 stress 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, (ii)
\n
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
Maturity analysis
\n
AUDITED
\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 to central banks).
\n
Rather, in this table, cash-generating capacity from bonds is
\n
only visible at final maturity of the bond. As a result, the net
\n
funding gaps shown in the first buckets in the table are a
\n
clear overestimation of the risk as in practice KBC would
\n
monetise its Liquid Asset Buffer (95 billion euros at year-end
\n
2024 (101 billion euros, 12-month average over 2024), of which
\n
53 billion euros in unencumbered central bank eligible assets
\n
and the remainder in cash and withdrawable central bank
\n
receivables) to address these net outflows.
\n
At year-end 2024, KBC had 53 billion euros\u2019 worth of
\n
unencumbered central bank eligible assets, 44 billion euros
\n
of which in the form of liquid government bonds (83%). The
\n
remaining available liquid assets were mainly covered bonds
\n
(14%). 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
provides assistance in the area of (integrated) balance sheet
\n
promote and support the solid and efficient integration of all
\n
funding mix and concentration and the composition of 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
31-12-2024
Total inflows71429105119755336
Total outflows66251926716330336
Professional funding2200108032
Customer funding2614161361540229
Debt certificates151031310043
Other3000003 03 3
Liquidity gap (excl. undrawn commitments)-59-111079112-155250
Undrawn commitments-------49-49
Financial guarantees-------11-11
Net funding gap (incl. undrawn commitments)-59-111079112-155-35-60
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
\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 markets, resulting in a stable funding mix. A significant portion of the
\n
funding is attracted from core customer 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
Funding mixInformation31-12-2024 31-12-2023
Funding from customers1Demand deposits, term deposits, savings deposits, other deposits, 75%79%
savings certificates and debt issues placed in the network
Debt issues placed with institu-Including covered bonds, tier-2 issues, KBC Group NV senior debt8% 9%
tional investors
Net unsecured interbank fundingIncluding TLTRO3%4%
Net secured funding2Repo financing-0%-7%
Certificates of deposit\u20135%6%
Total equityIncluding AT1 issues8%9%
Total100%100%
in billions of EUR306276
\n\n\n\n\n
\n
1 Some 86% of this funding relates to private individuals and SMEs at year-end 2024.
\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
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) in
\n
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. In addition to the small (long or short)
\n
positions that occur during our certified market-making
\n
activities, our focus on client-driven, client-facilitation-
\n
related business leaves us with some residual market risks,
\n
which are necessary to enable us to fulfil our intermediary
\n
role towards clients.
\n
Traditionally, the focus of our trading activities is on interest-
\n
rate instruments, while activity on the foreign exchange
\n
markets and in relation to equity is limited. In order to ensure
\n
the tradability of these positions, the following principles
\n
apply:
\n
\u2022 Trading activity is limited to linear and non-linear interest-
\n
rate, foreign-exchange and equity products, as well as to
\n
bonds, bond futures and government debt;
\n
\u2022 Commodity-related products are only allowed on a
\n
back-to-back basis.
\n
These activities are carried out by our dealing rooms in our
\n
home countries as well as via a minor presence in the UK and
\n
Asia.
\n
Managing market risk
\n
AUDITED
\n
In the area of market risk in the trading activities, the ExCo is
\n
supported by the Group Markets Committee (GMC), which
\n
advises on risk monitoring and capital usage with respect to
\n
trading activities. The governance, rules and procedures on
\n
how trading risk management should be performed
\n
throughout the group are outlined in the Trading Market Risk
\n
Management Framework.
\n
The building blocks for managing
\n
market risk
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises
\n
described in the \u2018Components of sound risk management\u2019
\n
section apply to the trading market risk management
\n
context (such as the Risk Scan, the NAPP and the collection
\n
of risk signals). Furthermore, we analyse the results of value
\n
and risk calculations, market developments, ESG risk
\n
assessments, industry trends, new modelling insights,
\n
changes in regulations, etc.
\n
\u2022 Risk measurement: we measure trading risk via a number
\n
of parameters including nominal positions, concentrations,
\n
Basis Point Value (BPV) and other sensitivities and scenario
\n
analysis. However, the primary tool we use for measuring
\n
and monitoring market risk exposures in the trading book is
\n
the Historical Value-at-Risk (HVaR) method, which gives an
\n
estimate of the amount of economic value that might be
\n
lost on a given portfolio due to market risk over a defined
\n
holding period, with a given confidence level.
\n
\u2022 Setting and cascading risk appetite: the risk appetite for
\n
market risk in trading activities is set at low and is overseen
\n
by the GMC via a risk limit framework consisting of a
\n
hierarchy of limits and early warning indicators. These are
\n
defined down to trading desk level and, in addition to
\n
HVaR, include a series of concentration limits, basis-point-
\n
value limits and (stress) scenario limits.
\n
\u2022 Risk analysis, reporting, response and follow-up: in
\n
addition to the more proactive elements described under
\n
\u2018Risk 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. 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.
\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. The stress tests are discussed at GMC meetings to
\n
enable the members to gain an insight into potential
\n
weaknesses in the positions held by the group.
\n
Market risk profile
\n
AUDITED
\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. The
\n
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
Market risk (Management HVaR) (in millions of EUR)20242023
Average for 1Q77
Average for 2Q56
Average for 3Q56
Average for 4Q47
As at 31 December48
Maximum in year1010
Minimum in year34
\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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)20242023
Interest rate risk4.96.3
FX risk0.50.9
Equity risk1.92.1
Diversification effect-2.0-2.8
Total HVaR5.26.5
\n\n\n\n\n
\n

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

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

\n\n
Note 6.7: Risk management and capital adequacy
\n
\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
\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 10.88% (fully loaded) at
\n
year-end 2024. This includes the Pillar 1 minimum requirement (4.5%), the Pillar 2 requirement (1.09% set by the ECB following its
\n
supervisory review and evaluation process) and the buffer requirements (5.28% set by the local competent authorities in KBC\u2019s
\n
core markets). At year-end 2024, the fully loaded common equity ratio came to 15.0% (see the \u2018How do we manage our
\n
capital?\u2019 section). At year-end 2024, the transitional common equity ratio came to 13.9%, which represented a capital buffer
\n
of 2.4% relative to the minimum requirement of 11.4%.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of KBC Bank must be 11.1% (transitional) at year-end
\n
2024. At year-end 2024, the transitional common equity ratio was 13.2%.
\n
\u2022 The solvency of KBC Insurance is calculated on the basis of Solvency II. At year-end 2024, the Solvency II ratio came to 200%
\n
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
KBC group KBC Bank
(consolidated) (consolidated) KBC Insurance
Key solvency figures for the KBC group, CRR/CRD CRR/CRD (consolidated)
KBC Bank and KBC Insurance (in millions of EUR) transitional transitional Solvency II
31-12-202431-12-202331-12-202431-12-202331-12-202431-12-2023
Total regulatory capital, after profit appropriation 21 048 19 768 18 981 17 952 4 392 4 130
Tier-1 capital 18 485 17 389 16 440 15 573 3 891 3 629
Common equity 16 621 15 639 14 576 13 823 \u2013 \u2013
Parent shareholders\u2019 equity (after deconsolidating KBC 18 932 18 209 16 665 15 450 3 331 3 302
Insurance for the KBC group)
Solvency adjustments -2 311 -2 571 -2 088 -1 627 560 327
Additional going concern capital11 864 1 750 1 864 1 750 \u2013 \u2013
Tier-2 capital22 563 2 379 2 541 2 379 501 501
Total weighted risk volume (RWA)3119 950 113 029 110 087 103 192 \u2013 \u2013
Credit risks 94 218 88 042 94 218 88 042 \u2013 \u2013
Market risks 2 026 2 116 2 026 2 116 \u2013 \u2013
Operational risks 13 843 13 034 13 843 13 034 \u2013 \u2013
Insurance risks 9 133 9 133 \u2013 \u2013 \u2013 \u2013
Holding-company activities and elimination of intragroup 729 704 \u2013 \u2013 \u2013 \u2013
transactions
Solvency capital requirement (insurance) \u2013 \u2013 \u2013 \u2013 2 196 2 005
Common equity ratio (group, bank) 13.9%13.8% 13.2% 13.4% \u2013 \u2013
Solvency II ratio (insurance) \u2013 \u2013 \u2013 \u2013 200% 206%
\n\n\n\n
\n
1 Includes perpetual subordinated loans with fully discretionary, non-cumulative interest payments (included in \u2018Total equity\u2019 under IFRS). The securities also have a loss absorption mechanism
\n
(i.e. a temporary write-down trigger 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
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
\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", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag670": { "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 (ALM).
\n
Managing market risk in non-trading
\n
activities
\n
AUDITED
\n
In the area of market risk in the non-trading activities, the
\n
ExCo is supported by the Group Asset and Liability
\n
Committee (GALCO), which is to provide assistance in the
\n
area of (integrated) balance sheet management at group
\n
level. The governance, rules and procedures and how asset
\n
and liability risk management is performed throughout the
\n
group are outlined in the Non-Trading Market Risk
\n
Management Framework. Its implementation is monitored by
\n
the Market Non-Trading Risk Competence Centre of Group
\n
Risk. Within the risk function, the ALM & Liquidity Risk Council,
\n
chaired by the CRO Markets & Treasury, aims to establish,
\n
facilitate, promote and support the solid and efficient
\n
integration of all tasks assigned to the local and group risk
\n
departments covering ALM and liquidity risks.
\n
The building blocks for managing
\n
market risk in non-trading activities
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises
\n
described in the \u2018Components of sound risk management\u2019
\n
section apply to the non-trading market risk management
\n
context (such as the Risk Scan, the NAPP and the collection
\n
of risk signals). Within the Framework, deep dives (in-depth
\n
analyses) are performed to identify specific risks related to
\n
the market (non-trading) activities and their materiality.
\n
Additionally, the key risk drivers for ALM risk for KBC are
\n
determined and updated annually and regulatory
\n
developments are monitored on a continuous basis.
\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 prepayments, 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: we pursue a medium
\n
risk appetite for non-trading market risk. Limits cover all
\n
material market risks resulting from the ALM activities,
\n
being interest rate risk, equity risk, real estate risk and
\n
foreign exchange risk.
\n
\u2022 Risk analysis, reporting, response and follow-up: besides
\n
regulatory reporting, structural reporting to the GALCO is
\n
performed. The reporting process includes a sign-off
\n
process to ensure data and processing accuracy.
\n

\n\n\n\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 interest rate risk positions separately for the
\n
banking and insurance activities.
\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
Impact of a parallel 10-basis-point increase in the swap1 curve
for the KBC group, impact on value2(in millions of EUR)20242023
Banking-55-45
Insurance2011
Total-35-33
\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 banking activities, two other methodologies to
\n
measure interest rate sensitivity, which are comparable
\n
across institutions, are the outlier stress test (SOT) on
\n
Economic Value of Equity (EVE) and the outlier stress test
\n
(SOT) on Net Interest Income (NII), both calculated according
\n
to the 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, the SOT EVE
\n
came to -5.20% of tier-1 capital at year-end 2024. This is well
\n
below the -15% threshold, which is monitored by the
\n
European Central Bank and indicates that the overall interest
\n
rate sensitivity of KBC\u2019s balance sheet is limited.
\n
The SOT EVE is complemented by the SOT NII, which
\n
measures the impact of two scenarios (parallel up and down)
\n
on NII, assuming a constant balance sheet. The impact of the
\n
worst-case scenario on NII is also set off against tier-1
\n
capital. According to this measure, the interest rate
\n
sensitivity of KBC is limited too: it came to -1.55% at year-end
\n
2024, compared to the 5% outlier threshold used by the
\n
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 Risk Report.
\n
Concerning the group\u2019s insurance activities, the fixed-
\n
income investments for the Non-life reserves are invested
\n
with the aim of matching the projected pay-out patterns for
\n
claims, based on extensive actuarial analysis.
\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
via a cashflow-matching policy, which is applied to that
\n
portion of the Life insurance portfolios covered by fixed-
\n
income securities. Unit-linked Life insurance investments
\n
(class 23) are not dealt with here, since this activity does not
\n
entail any market risk 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
Expected cashflows (not discounted),
Life insurance activities (in millions of EUR)0\u20131 year1\u20132 years2-3 years3-4 years4-5 years>5 yearsTotal
31-12-2024
Fixed-income assets backing liabilities, 1 6299429241 0728958 50713 969
guaranteed component
Equity------964
Property------286
Other (no maturity)------182
Liabilities, guaranteed component1 1209419697227149 94514 410
Difference in time-sensitive expected cashflows5091-45350181-1 438-422
Mean duration of assets5.67 years
Mean duration of liabilities7.35 years
31-12-2023
Fixed-income assets backing liabilities, 1 7877419327871 0448 22513 516
guaranteed 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
\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. We adopt a
\n
liability-driven ALM approach focused on mitigating the
\n
interest rate risk in accordance with KBC\u2019s risk appetite. For
\n
the remaining interest rate risk, we adhere to a policy that
\n
takes into account the possible negative consequences of a
\n
sustained decline in interest rates, and have built up
\n
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
Breakdown of the reserves for non-unit-linked Life insurance by
guaranteed interest rate, insurance activities31-12-202431-12-2023
5.00% and higher3%3%
More than 4.25% up to and including 4.99%5%6%
More than 3.50% up to and including 4.25%3%4%
More than 3.00% up to and including 3.50%9%9%
More than 2.50% up to and including 3.00%4%3%
2.50% and lower74%73%
0.00%2%2%
Total 100%100%
\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
Exposure to bonds at year-end 2024, KBC Group, carrying value
\n
\n
(in millions of EUR)
\n
AUDITED
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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 tradingTotal2023points1
Sovereign 41 95518 1653 36063 48059 509-2 943
Of which2:
Czech Republic11 2361 9771 75514 96815 611-708
Belgium6 5685 32583312 72711 367-704
France3 9342 8091096 8515 451-290
Slovakia3 5779923074 8764 207-245
Hungary2 5151 203503 7673 066-106
Non-sovereign38 1214 3741 66114 22511 908-388
\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 -57 million euros at year-end 2024).
\n
2 Top 5 largest sovereign portfolios.
\n
3 An immaterial portfolio held at fair value through profit or loss is included in the Non-sovereign total.
\n
Equity risk
\n
We define equity risk as the risk due to changes in the level or
\n
in the volatility of equity prices. KBC holds equity portfolios
\n
for several purposes. The main exposure to equity is within
\n
our insurance business, where the ALM strategies are based
\n
on a risk-return evaluation, taking into account the market
\n
risk attached to open equity positions. The vast majority of
\n
the equity portfolio is held as an economic hedge for
\n
long-term liabilities of the insurance company. A limited
\n
tactical portfolio (99 million euros) aims to contribute to the
\n
financial objectives through dividend payouts and capital
\n
gains. Smaller equity portfolios are also held by other group
\n
entities, where the portfolios are of a strategic nature, such
\n
as participations in relation to the execution of KBC\u2019s
\n
business model. The sectoral repartition of the portfolio is
\n
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
Equity portfolio of the KBC groupBanking activitiesInsurance activitiesGroup
31-12-202431-12-202331-12-202431-12-202331-12-202431-12-2023
In billions of EUR*0.240.231.421.391.661.63
of which unlisted0.230.220.240.180.470.4
\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
Impact of a 25% drop in equity prices, impact on value
(in millions of EUR)20242023
Banking activities-60-59
Insurance activities-355-348
Total-415-407
\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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)31-12-202431-12-202331-12-202431-12-2023
Banking activities--2219
Insurance activities-12339212
Total-12361231
\n\n
\n

\n\n\n\n
Real estate risk
\n
We define real estate risk as the risk due to changes in the
\n
level or in the volatility of real estate prices. Real estate that
\n
is exclusively used by KBC and its subsidiaries for their own
\n
activities are excluded here. The group\u2019s real estate
\n
businesses hold a limited real estate investment portfolio.
\n
KBC Insurance also holds a diversified real estate portfolio,
\n
as an investment for Non-life reserves and long-term Life
\n
activities. The real estate exposure is viewed as a long-term
\n
hedge against inflation risks and as a way of optimising the
\n
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
Impact of a 25% drop in real estate prices, impact on value (in millions of EUR)20242023
Bank portfolios-116-94
Insurance portfolios-120-107
Total-235-201
\n\n
\n
Inflation risk
\n
We define inflation risk as the risk due to changes in the level
\n
or in the volatility of inflation rates. Inflation can impact a
\n
financial company in many ways, for instance via changes in
\n
interest rates or operational costs. Inflation in general
\n
therefore is not easily quantifiable as a market risk concept.
\n
However, certain financial products or instruments have a
\n
direct link with inflation and their value is directly impacted
\n
by a change in market expectations. KBC Bank uses
\n
inflation-linked bonds as an opportunity to diversify its asset
\n
portfolio. At KBC Insurance, inflation risk relates specifically
\n
to workmen\u2019s compensation insurance, where, particularly in
\n
the case of permanent or long-term disabilities, an annuity
\n
benefit is paid to the insured person (with the annuity being
\n
linked to inflation by law). KBC Insurance partly mitigates the
\n
risks by investing in inflation-linked bonds and complements
\n
its inflation hedging programme by investing in real estate
\n
and shares, as these assets are traditionally correlated with
\n
inflation and do not have a maturity date.
\n
The banking business holds a portfolio of inflation-linked
\n
bonds with a sensitivity to inflation (BPI) of 5.6 million euros (a
\n
0.10% move in inflation expectations) at the end of 2024. For
\n
the insurance activities the BPI of liabilities was calculated at
\n
-4.9 million euros (increasing the liabilities), against which
\n
inflation-linked bonds are held with a 4.2-million-euro BPI,
\n
supplemented with a 33-million-euro real estate portfolio.
\n
The sensitivity of liabilities to inflation is only known with a
\n
quarter\u2019s delay. Therefore, the insurance figures in this
\n
section are based on the third quarter of 2024.
\n
Foreign exchange risk
\n
We define foreign exchange risk as the risk due to changes in
\n
the level or in the volatility of currency exchange rates. We
\n
pursue a prudent policy as regards our non-trading currency
\n
exposure. Material foreign exchange exposure in the ALM
\n
books of banking entities with a trading book is transferred
\n
via internal deals to the trading book, where it is managed
\n
within the allocated trading limits. The foreign exchange
\n
exposure of banking entities without a trading book and of
\n
insurance and other entities has to be hedged, if material.
\n
However, non-euro-denominated equity holdings in the
\n
insurance portfolio are not hedged, as foreign exchange
\n
volatility is considered part of the investment 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
Impact of a 10% decrease in currency value* BankingInsurance
(in millions of EUR)31-12-202431-12-202331-12-202431-12-2023
CZK-217-209-32-31
HUF-74-85-10-9
BGN-100-93-25-22
USD-36-59-52
\n\n
\n
* Exposure for currencies where the impact exceeds 10 million euros in Banking or Insurance.
\n

\n\n\n\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
Hedging interest rate risks
\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 only the
\n
credit spread profile is relevant. Liabilities can include KBC\u2019s
\n
own issues. Micro hedges are either fair-value or cashflow
\n
based.
\n
Hedging foreign exchange risks
\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
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

\n\n\n\n\n\n\n\n\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
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 GALCO.
\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 equity
\n
prices that fall. At KBC, we use this capital sensitivity as a
\n
common denominator to measure the vulnerability of the
\n
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\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 CET1 ratio), IFRS impact caused by:31-12-202431-12-2023
+100-basis-point parallel shift in interest rates-0.1%-0.1%
+100-basis-point parallel shift in spread-0.4%-0.2%
-25% in equity prices-0.2%-0.1%
\n\n\n\n\n\n
\n
The table shows that the sensitivity of capital to market
\n
movements is limited. The sensitivity to spread volatility has
\n
increased over the past year as KBC has opted to increase
\n
the part of its bond portfolio that is booked at fair value
\n
through other comprehensive income. However, the majority
\n
of the 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
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) in
\n
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. In addition to the small (long or short)
\n
positions that occur during our certified market-making
\n
activities, our focus on client-driven, client-facilitation-
\n
related business leaves us with some residual market risks,
\n
which are necessary to enable us to fulfil our intermediary
\n
role towards clients.
\n
Traditionally, the focus of our trading activities is on interest-
\n
rate instruments, while activity on the foreign exchange
\n
markets and in relation to equity is limited. In order to ensure
\n
the tradability of these positions, the following principles
\n
apply:
\n
\u2022 Trading activity is limited to linear and non-linear interest-
\n
rate, foreign-exchange and equity products, as well as to
\n
bonds, bond futures and government debt;
\n
\u2022 Commodity-related products are only allowed on a
\n
back-to-back basis.
\n
These activities are carried out by our dealing rooms in our
\n
home countries as well as via a minor presence in the UK and
\n
Asia.
\n
Managing market risk
\n
AUDITED
\n
In the area of market risk in the trading activities, the ExCo is
\n
supported by the Group Markets Committee (GMC), which
\n
advises on risk monitoring and capital usage with respect to
\n
trading activities. The governance, rules and procedures on
\n
how trading risk management should be performed
\n
throughout the group are outlined in the Trading Market Risk
\n
Management Framework.
\n
The building blocks for managing
\n
market risk
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises
\n
described in the \u2018Components of sound risk management\u2019
\n
section apply to the trading market risk management
\n
context (such as the Risk Scan, the NAPP and the collection
\n
of risk signals). Furthermore, we analyse the results of value
\n
and risk calculations, market developments, ESG risk
\n
assessments, industry trends, new modelling insights,
\n
changes in regulations, etc.
\n
\u2022 Risk measurement: we measure trading risk via a number
\n
of parameters including nominal positions, concentrations,
\n
Basis Point Value (BPV) and other sensitivities and scenario
\n
analysis. However, the primary tool we use for measuring
\n
and monitoring market risk exposures in the trading book is
\n
the Historical Value-at-Risk (HVaR) method, which gives an
\n
estimate of the amount of economic value that might be
\n
lost on a given portfolio due to market risk over a defined
\n
holding period, with a given confidence level.
\n
\u2022 Setting and cascading risk appetite: the risk appetite for
\n
market risk in trading activities is set at low and is overseen
\n
by the GMC via a risk limit framework consisting of a
\n
hierarchy of limits and early warning indicators. These are
\n
defined down to trading desk level and, in addition to
\n
HVaR, include a series of concentration limits, basis-point-
\n
value limits and (stress) scenario limits.
\n
\u2022 Risk analysis, reporting, response and follow-up: in
\n
addition to the more proactive elements described under
\n
\u2018Risk 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. 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.
\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. The stress tests are discussed at GMC meetings to
\n
enable the members to gain an insight into potential
\n
weaknesses in the positions held by the group.
\n
Market risk profile
\n
AUDITED
\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. The
\n
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
Market risk (Management HVaR) (in millions of EUR)20242023
Average for 1Q77
Average for 2Q56
Average for 3Q56
Average for 4Q47
As at 31 December48
Maximum in year1010
Minimum in year34
\n\n\n\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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)20242023
Interest rate risk4.96.3
FX risk0.50.9
Equity risk1.92.1
Diversification effect-2.0-2.8
Total HVaR5.26.5
\n\n\n\n\n
\n

\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag657": { "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
AUDITED
\n
In the area of liquidity risk, the ExCo is supported by the
\n
Group Asset and Liability Committee (GALCO), which
\n
management at group level, including liquidity and funding.
\n
The governance, rules and procedures and how asset and
\n
liability risk management is performed throughout the group
\n
are outlined in the Liquidity Risk Management Framework. Its
\n
implementation is monitored by the Liquidity Risk
\n
Competence Centre of Group Risk. Within the risk function,
\n
the ALM & Liquidity Risk Council aims to establish, facilitate,
\n
tasks assigned to the local and group risk departments.
\n
The building blocks for managing
\n
liquidity risk
\n
AUDITED
\n
\u2022 Risk identification: all risk identification exercises described
\n
in the \u2018Components of sound risk management\u2019 section
\n
apply to the liquidity risk management context (such as the
\n
Risk Scan, the NAPP and the collection of risk signals).
\n
\u2022 Risk measurement: identified liquidity risks are measured
\n
by means of both regulatory metrics such as the Liquidity
\n
Coverage Ratio (158% in 2024) and the Net Stable Funding
\n
Ratio (139%), and internal metrics on, for example, 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 GALCO monitors
\n
the development of the liquidity risk profile in relation to
\n
the limits. KBC\u2019s low risk profile for liquidity risk is illustrated
\n
by the fact that KBC is well above the thresholds for
\n
regulatory and internal liquidity measures. The GALCO
\n
decides on and periodically reviews a framework of limits,
\n
early warning levels and policies on liquidity risk activities
\n
that is consistent with the group\u2019s risk appetite.
\n
\u2022 Risk analysis, reporting, response and follow-up: to
\n
mitigate day-to-day and intraday liquidity risk, group-
\n
wide trends in funding liquidity and funding needs are
\n
monitored continuously by the Group Treasury and Risk
\n
function. A Liquidity Contingency Plan drafted by the
\n
Group Treasury function is in place to address possible
\n
liquidity crisis situations and is tested at 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 stress 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, (ii)
\n
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
Maturity analysis
\n
AUDITED
\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 to central banks).
\n
Rather, in this table, cash-generating capacity from bonds is
\n
only visible at final maturity of the bond. As a result, the net
\n
funding gaps shown in the first buckets in the table are a
\n
clear overestimation of the risk as in practice KBC would
\n
monetise its Liquid Asset Buffer (95 billion euros at year-end
\n
2024 (101 billion euros, 12-month average over 2024), of which
\n
53 billion euros in unencumbered central bank eligible assets
\n
and the remainder in cash and withdrawable central bank
\n
receivables) to address these net outflows.
\n
At year-end 2024, KBC had 53 billion euros\u2019 worth of
\n
unencumbered central bank eligible assets, 44 billion euros
\n
of which in the form of liquid government bonds (83%). The
\n
remaining available liquid assets were mainly covered bonds
\n
(14%). 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
provides assistance in the area of (integrated) balance sheet
\n
promote and support the solid and efficient integration of all
\n
funding mix and concentration and the composition of 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
31-12-2024
Total inflows71429105119755336
Total outflows66251926716330336
Professional funding2200108032
Customer funding2614161361540229
Debt certificates151031310043
Other3000003 03 3
Liquidity gap (excl. undrawn commitments)-59-111079112-155250
Undrawn commitments-------49-49
Financial guarantees-------11-11
Net funding gap (incl. undrawn commitments)-59-111079112-155-35-60
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
\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 markets, resulting in a stable funding mix. A significant portion of the
\n
funding is attracted from core customer 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
Funding mixInformation31-12-2024 31-12-2023
Funding from customers1Demand deposits, term deposits, savings deposits, other deposits, 75%79%
savings certificates and debt issues placed in the network
Debt issues placed with institu-Including covered bonds, tier-2 issues, KBC Group NV senior debt8% 9%
tional investors
Net unsecured interbank fundingIncluding TLTRO3%4%
Net secured funding2Repo financing-0%-7%
Certificates of deposit\u20135%6%
Total equityIncluding AT1 issues8%9%
Total100%100%
in billions of EUR306276
\n\n\n\n\n
\n
1 Some 86% of this funding relates to private individuals and SMEs at year-end 2024.
\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

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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
\n
unit-linked liabilities, are not included in the sensitivity
\n
reporting below. The impact is reported before reinsurance,
\n
given the small impact which the reinsurance has on the
\n
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
31-12-202431-12-2023
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 7822 143--11 7452 117--
Impact of:
Mortality rates: +1%6-4-0-15-30-2
Mortality rates: -1% -65-01-5302
Morbidity rates: +1%6-6-116-6-01
Morbidity rates: -1%-670-1-660-1
Expenses: +5%55-57-7949-54-39
Expenses: -5%-55576-9-49533-9
Lapse rate: +10%5853-6655507-112
Lapse rate: -10%-60-5-469-58-52-6116
Non-life insurance: balance2 444---2 238---
Impact of:
Unpaid claims & expenses: +5%122--1253111--1165
Unpaid claims & expenses: -5%-122-125-3-111-116-5
\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
\n
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
31-12-202431-12-2023
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 729---14 466---
Impact of discount rate +0.30%-23004-234-22002-222
Impact of discount rate -0.30%2380-42422280-2230
Insurance liabilities (excl. unit-linked): balance11 7822 143-- 11 7452 117--
Impact of discount rate +0.30%-3346-0328-30651300
Impact of discount rate -0.30%364-71-358354-6-0-348
Combined effect --------
Impact of discount rate +0.30%104-6395865378
Impact of discount rate -0.30%-1267-3-116-126-6-2-118
Non-life insurance
Assets: balance4 204- -- 4 152- --
Impact of discount rate +0.30%-1300-13-1200-12
Impact of discount rate -0.30%130013120012
Insurance liabilities: balance2 444 -- - 2 238 -- -
Impact of discount rate +0.30%-360035-310031
Impact of discount rate -0.30%380-0-37310-0-31
Combined effect--------
Impact of discount rate +0.30%230023190019
Impact of discount rate -0.30%-250-0-24-190-0-19
\n\n\n\n
\n

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\u2022 The \u2018Dividends\u2019 item in 2024 (1.9 billion euros) includes the final dividend of 3.15 euros per share and the exceptional interim
\n
dividend of 0.70 euros per share (both paid in May 2024) and the interim dividend of 1.00 euro per share (paid in November
\n
2024). The \u2018Dividends\u2019 item in 2023 (1.7 billion euros) includes the final dividend of 3.00 euros per share (paid in May 2023)
\n
and the interim dividend of 1.00 euro per share (paid in November 2023).
\n
\u2022 We propose to the General Meeting of Shareholders of 30 April 2025 a total dividend of 4.85 euros per share entitled to
\n
dividend related to 2024. That amount includes 0.70 euros per share already paid in May 2024, reflecting the surplus
\n
capital exceeding the 15% fully loaded CET1 capital threshold at year-end 2023, and 4.15 euros per share, comprising an
\n
interim dividend of 1 euro per share, which was already paid in November 2024, and the remaining 3.15 euros per share,
\n
payable in May 2025. Note that shares repurchased under the share buyback programme completed in 2024 are
\n
excluded from the calculation of the number of shares entitled to dividend (see also \u2018Abridged company annual accounts\u2019
\n
elsewhere in this annual report).
\n

\n\n\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
(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
\n\n\n\n\n\n\n
\n
\n

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"Tag607": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag608": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalentsClassifiedAsPartOfDisposalGroupHeldForSale", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag609": { "value": "61407000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag610": { "value": "53961000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag611": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RestrictedCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag612": { "value": "0.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:RestrictedCashAndCashEquivalents", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag613": { "value": "\n
\u2022 KBC uses the indirect method to report on cashflows from operating activities.
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag614": { "value": "\n
\u2022 Net cash from or used in operating activities:
\n
In 2024, this item included growth in customer deposits (related in part to the recovery of the outflow to the Belgian
\n
State Note in 2023) and a strong increase in repos, partly offset by a decrease in deposits from credit institutions
\n
(including the repayment of the remaining 2.6 billion euros borrowed under TLTRO III) and certificates of deposit as well
\n
as an increase in loans and advances to customers and debt instruments;
\n
In 2023, this item included a repayment of part of the amount borrowed under TLTRO III (12.9 billion euros), lower
\n
demand deposits and savings deposits (partly due to the outflow to the Belgian State Note in September 2023), lower
\n
repos and higher mortgage loans and term loans, partly offset by growth in certificates of deposit and time deposits.
\n
\u2022 Net cash from or used in investing activities:
\n
In 2024, this item included additional net investments in tangible and intangible fixed assets (-1 160 million euros), partly
\n
offset by a decrease in debt securities at amortised cost (+1 080 million euros);
\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
\u2022 Net cash from or used in financing activities:
\n
In 2024, this item included the dividend payout (-1.9 billion euros), treasury share buybacks (-0.8 billion euros) and the
\n
issue or repayment of promissory notes and other debt securities (+1.3 billion euros; KBC IFIMA, KBC Group NV and KBC
\n
Bank NV accounted for the bulk of the figure for 2024, which related primarily to 3.4 billion euros\u2019 worth of these
\n
instruments being issued and 2.4 billion euros being redeemed). Furthermore, net cash related to financing activities
\n
was impacted by the issue of subordinated liabilities (+0.2 billion euros, with 1.5 billion euros\u2019 worth of these instruments
\n
being issued and 1.4 billion euros being redeemed; KBC Group NV accounted for the bulk of the figure), and AT1 (with
\n
+0.75 billion euros\u2019 worth of these instruments being issued and 1.14 billion euros being redeemed);
\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
\n
in the Czech Republic and KBC Bank NV accounted for the bulk of the figure for 2023, which related primarily to 8.6
\n
billion euros\u2019 worth of these instruments being issued and 2.7 billion euros being redeemed. This item also included the
\n
issue or repayment of subordinated liabilities (+0.5 billion euros; KBC Group NV accounted for the bulk of the figure)
\n
and the issue of a new additional tier-1 instrument (+0.75 billion euros).
\n

\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag615": { "value": "2600000000.0", "decimals": -8, "dimensions": { "concept": "kbc:RepaymentsOfBorrowingsUnderTargetedLongerTermRefinancingOperations", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag616": { "value": "12900000000.0", "decimals": -8, "dimensions": { "concept": "kbc:RepaymentsOfBorrowingsUnderTargetedLongerTermRefinancingOperations", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag714": { "value": "-1160000000.0", "decimals": -6, "dimensions": { "concept": "kbc:CashFlowsFromUsedInDecreaseIncreaseInInvestmentsInTangibleAndIntangibleFixedAssetsClassifiedAsInvestingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag717": { "value": "1080000000.0", "decimals": -6, "dimensions": { "concept": "kbc:CashFlowsFromUsedInDecreaseIncreaseInDebtSecuritiesAtAmortisedCostClassifiedAsInvestingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag617": { "value": "1900000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag618": { "value": "800000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag619": { "value": "1300000000.0", "decimals": -8, "dimensions": { "concept": "kbc:ProceedsFromIssueRepaymentsOfPromissoryNotesAndOtherDebtSecurities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag620": { "value": "3400000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag621": { "value": "2400000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:RepaymentsOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag622": { "value": "200000000.0", "decimals": -8, "dimensions": { "concept": "kbc:ProceedsFromIssueOrRepaymentsOfSubordinatedLiabilities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag623": { "value": "1500000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfSubordinatedLiabilities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag624": { "value": "1400000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:RepaymentsOfSubordinatedLiabilities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag625": { "value": "750000000.0", "decimals": -7, "dimensions": { "concept": "kbc:ProceedsFromIssueOfAdditionalTier1Instruments", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag626": { "value": "1140000000.0", "decimals": -7, "dimensions": { "concept": "kbc:RepaymentsOfAdditionalTier1Instruments", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag627": { "value": "1700000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:DividendsPaidClassifiedAsFinancingActivities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag628": { "value": "500000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:PaymentsToAcquireOrRedeemEntitysShares", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag629": { "value": "6000000000.0", "decimals": -8, "dimensions": { "concept": "kbc:ProceedsFromIssueRepaymentsOfPromissoryNotesAndOtherDebtSecurities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag630": { "value": "8600000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:ProceedsFromIssueOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag631": { "value": "2700000000.0", "decimals": -8, "dimensions": { "concept": "ifrs-full:RepaymentsOfBondsNotesAndDebentures", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag632": { "value": "500000000.0", "decimals": -8, "dimensions": { "concept": "kbc:ProceedsFromIssueOrRepaymentsOfSubordinatedLiabilities", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag633": { "value": "750000000.0", "decimals": -7, "dimensions": { "concept": "kbc:ProceedsFromPaymentForIssueOfAdditionalTier1Instruments", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "Tag718": { "value": "\n

\n
Note 1.1: Statement of compliance
\n

\n\n
The consolidated financial statements of KBC Group NV, including all the notes, were authorised for issue on 13 March 2025
\n
by the Board of Directors.
\n\n\n\n\n\n\n\n\n\n
\n\n
They have been prepared in accordance with the IFRS Accounting Standards as adopted by the
\n
European Union (\u2018endorsed IFRS\u2019) and present one year of comparative information.
\n\n\n\n\n\n\n\n\n\n
All amounts are shown in millions of euros
\n
and rounded to the million (unless otherwise stated).
\n
\n\n

\n\n

\n

\n\n
The following standards became effective on 1 January 2024:
\n
\u2022 The IASB has published several limited amendments to existing IFRSs, the impact of which is negligible for KBC.
\n

\n\n\n\n\n\n\n\n\n\n\n
The following IFRS standards were issued but not yet effective in 2024. KBC will apply these standards when they become
\n
mandatory.
\n
\u2022 IFRS 18 (Presentation and Disclosure in Financial Statements), applicable from 2027, with limited impact on the
\n
presentation and disclosures;
\n
\u2022 IFRS 19 (Subsidiaries without public accountability), with no impact expected;
\n
\u2022 The 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\n\n\n\n\n
\n
As of 1 January 2024, we have revised our multi-tier approach for the assessment of a significant increase in credit risk. The
\n
indicators based on a 12-month probability of default (\u2018Internal rating\u2019 and \u2018Internal rating backstop\u2019) were replaced by an
\n
assessment based on lifetime probability of default (LTPD) and a watch list indicator. KBC applied the revised approach for
\n
the first time in the first quarter of 2024. This resulted in an ECL release of 17 million euros, recognised in \u2018Impairment on financial
\n
assets at AC and at FVOCI\u2019. See also under \u2018Significant increase in credit risk since initial recognition\u2019 in Note 1.2.
\n
\n
Presentation of the income statement: since 2024, we present \u2018Net result from financial instruments at fair value through profit
\n
or loss\u2019 and \u2018Insurance finance income and expense (for insurance contracts issued)\u2019 on the same line, with retroactive
\n
restatement of the 2023 figures (also see Note 3.3).
\n
\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 specified in that section.
\n
\n
\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 KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com > 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", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag719": { "value": "\n
The consolidated financial statements of KBC Group NV, including all the notes, were authorised for issue on 13 March 2025
\n
by the Board of Directors.
\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag814": { "value": "KBC Group NV", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag720": { "value": "\n
They have been prepared in accordance with the IFRS Accounting Standards as adopted by the
\n
European Union (\u2018endorsed IFRS\u2019) and present one year of comparative information.
\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag721": { "value": "\n

\n\n

\n

\n\n
The following standards became effective on 1 January 2024:
\n
\u2022 The IASB has published several limited amendments to existing IFRSs, the impact of which is negligible for KBC.
\n

\n\n\n\n\n\n\n\n\n\n\n
The following IFRS standards were issued but not yet effective in 2024. KBC will apply these standards when they become
\n
mandatory.
\n
\u2022 IFRS 18 (Presentation and Disclosure in Financial Statements), applicable from 2027, with limited impact on the
\n
presentation and disclosures;
\n
\u2022 IFRS 19 (Subsidiaries without public accountability), with no impact expected;
\n
\u2022 The 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\n\n\n\n\n
\n
As of 1 January 2024, we have revised our multi-tier approach for the assessment of a significant increase in credit risk. The
\n
indicators based on a 12-month probability of default (\u2018Internal rating\u2019 and \u2018Internal rating backstop\u2019) were replaced by an
\n
assessment based on lifetime probability of default (LTPD) and a watch list indicator. KBC applied the revised approach for
\n
the first time in the first quarter of 2024. This resulted in an ECL release of 17 million euros, recognised in \u2018Impairment on financial
\n
assets at AC and at FVOCI\u2019. See also under \u2018Significant increase in credit risk since initial recognition\u2019 in Note 1.2.
\n
\n
Presentation of the income statement: since 2024, we present \u2018Net result from financial instruments at fair value through profit
\n
or loss\u2019 and \u2018Insurance finance income and expense (for insurance contracts issued)\u2019 on the same line, with retroactive
\n
restatement of the 2023 figures (also see Note 3.3).
\n
\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 specified in that section.
\n
\n
\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 KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com > Investor Relations.
\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:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag722": { "value": "\n

\n

\n\n
The following standards became effective on 1 January 2024:
\n
\u2022 The IASB has published several limited amendments to existing IFRSs, the impact of which is negligible for KBC.
\n

\n\n\n\n\n\n\n\n\n\n\n
The following IFRS standards were issued but not yet effective in 2024. KBC will apply these standards when they become
\n
mandatory.
\n
\u2022 IFRS 18 (Presentation and Disclosure in Financial Statements), applicable from 2027, with limited impact on the
\n
presentation and disclosures;
\n
\u2022 IFRS 19 (Subsidiaries without public accountability), with no impact expected;
\n
\u2022 The 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\n\n\n\n\n
\n
As of 1 January 2024, we have revised our multi-tier approach for the assessment of a significant increase in credit risk. The
\n
indicators based on a 12-month probability of default (\u2018Internal rating\u2019 and \u2018Internal rating backstop\u2019) were replaced by an
\n
assessment based on lifetime probability of default (LTPD) and a watch list indicator. KBC applied the revised approach for
\n
the first time in the first quarter of 2024. This resulted in an ECL release of 17 million euros, recognised in \u2018Impairment on financial
\n
assets at AC and at FVOCI\u2019. See also under \u2018Significant increase in credit risk since initial recognition\u2019 in Note 1.2.
\n
\n
Presentation of the income statement: since 2024, we present \u2018Net result from financial instruments at fair value through profit
\n
or loss\u2019 and \u2018Insurance finance income and expense (for insurance contracts issued)\u2019 on the same line, with retroactive
\n
restatement of the 2023 figures (also see Note 3.3).
\n
\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 specified in that section.
\n
\n
\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 KBC Bank\u2019 and \u2018Information on KBC
\n
Insurance\u2019 at www.kbc.com > Investor Relations.
\n
\n

\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag723": { "value": "\n
The following standards became effective on 1 January 2024:
\n
\u2022 The IASB has published several limited amendments to existing IFRSs, the impact of which is negligible for KBC.
\n

\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag724": { "value": "\nThe following IFRS standards were issued but not yet effective in 2024. KBC will apply these standards when they become \nmandatory. \n\u2022 IFRS 18 (Presentation and Disclosure in Financial Statements), applicable from 2027, with limited impact on the \npresentation and disclosures; \n\u2022 IFRS 19 (Subsidiaries without public accountability), with no impact expected; \n\u2022 The IASB has published several limited amendments to existing IFRSs and IFRICs. They will be applied when they become \nmandatory, but their impact is currently estimated to be negligible. \n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:ExplanationOfNotAppliedNewStandardsOrInterpretations", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag725": { "value": "bank-insurance group", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag726": { "value": "\n

\n

\n
Note 1.2: Summary of material accounting policies
\n
\n\n
General / Basic principle
\n
The general accounting principles of KBC Group NV (\u2018KBC\u2019) are based on the IFRS Accounting Standards, as adopted by the
\n
European Union, and on the IFRS Framework.
\n\n
The financial statements of KBC are prepared based on the going concern
\n
assumption. KBC presents each material class of similar items separately.
\n\n\n\n\n\n\n\n\n\n
Dissimilar items are presented separately unless
\n
they are immaterial, and items are only offset when 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
Financial assets
\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
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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 are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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

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\n\n

\n\n

\n\n

\n\n

\n\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised 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

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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
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent 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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting 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

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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
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\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
Financial liabilities
\n
\n
Financial instruments or their component parts are classified on initial recognition as liabilities 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 KBC 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 KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the
\n
way set out under \u2018Equity\u2019.
\n
\n
Financial liabilities \u2013 recognition and derecognition
\n
\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 some 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,
\n
except for financial liabilities at fair value through profit or loss.
\n
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in the 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
\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 financial 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 modification of terms is accounted for as an extinguishment, any costs or fees incurred are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair 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
\u2022 Financial 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 in the income statement except for fair value changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair value designation is used by KBC for the following reasons:
\n
- managed on an FV basis: KBC designates a financial liability or a group of financial liabilities 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
- Accounting 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
- Hybrid 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 can 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 hybrid instrument can
\n
be designated at fair value. This means that both the embedded derivative and the host contract are measured at
\n
fair value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which
\n
case 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 under this category,
\n
including those used to fund trading activities where no trading intent is present in them (e.g., issued bonds). These
\n
financial liabilities are initially measured at cost, which is the fair value of the consideration received including transaction
\n
costs. Subsequently, they are measured at amortised cost, which is the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial
\n
amount and the maturity amount. The difference between the amount made available and 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
Financial liabilities \u2013 own credit risk
\n
\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 value of the liability are presented in different places: 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 loss\u2019. Amounts recognised in OCI relating to own credit risk are not recycled to the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is prohibited, 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 financial 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
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\n
A financial guarantee contract is one that requires KBC to make specified payments to reimburse holders for losses they incur
\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 of
\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, when appropriate, cumulative amortisation recognised in accordance with the
\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
Reverse repos and repos
\n
\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 or advance, and the
\n
underlying asset is not recognised in the financial statements.
\n
\n
In a repo transaction, KBC sells a security and simultaneously agrees to repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues to 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 as the obligation to pay the repurchase price.
\n

\n\n\n\n\n\n\n\n\n
\n\n
Offsetting
\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) it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis or
\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\n\n\n\n\n\n\n\n\n

\n\n

\n

\n\n
Fair value
\n
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or paid 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 receive
\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 same as a forced transaction or distress sale.
\n
\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 in OCI. They relate to close-out costs, adjustments for less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty risk (credit value adjustment) and funding costs:
\n
\u2022 Credit 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
\n
risk 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.
\n
It is similar to a CVA, but the expected future negative fair value of the contracts is taken into consideration.
\n
\u2022 A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to ensure
\n
that the (future) funding costs or income attached to entering into and hedging such 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
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of 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
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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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
Insurance contracts
\n
\n
General
\n
\n
Scope
\n
\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. Whether insurance risk is significant is
\n
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 types 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 the contract and thus accounted for
\n
in accordance with the appropriate IFRS.
\n
\n
Level of aggregation
\n
\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 IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);
\n
\u2022 Annual cohort (year of inception of the policy);
\n
\u2022 Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022 Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\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 (managed together). As a minimum, the portfolios are broken down as follows:
\n
\u2022 Life
\n
Unit-linked
\n
Non-unit-linked
\n
Hybrid products
\n
\u2022 Non-life insurance
\n
Personal insurance
\n
Liabilities \u2013 MTPL
\n
Liabilities \u2013 other than MTPL
\n
Property (including other) other than fully comprehensive
\n
Fully comprehensive
\n
Accepted reinsurance
\n
\u2022 Ceded reinsurance
\n
\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
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\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 If CSM < 0 when risk adjustment is calculated at a 75% confidence level, onerous group of contracts
\n
\u2022 If CSM > 0 when risk adjustment is calculated at a 75% confidence level AND
\n
- if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, doubtful group of contracts
\n
- if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, profitable group of contracts
\n
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA), facts and circumstances indicating that the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio of more than 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
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous profitability 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 profitability assessment had been
\n
carried out at the level of the individual contract.
\n
\n
Recognition \u2013 derecognition
\n
\n
KBC recognises a group of insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022 The beginning of the coverage period of the group of contracts;
\n
\u2022 The date when the first payment from a policyholder in the group becomes due;
\n
\u2022 For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from the policyholder is deemed to 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 the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022 The beginning of the coverage period of the group of reinsurance contracts held;
\n
\u2022 The 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 reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\n
Valuation
\n
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take into account the insurance contract
\n
characteristics.
\n
\u2022 The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022 The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n
\u2022 The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder depend significantly (for more than 50%) on the return of the invested assets. This is a
\n
mandatory measurement model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some
\n
hybrid products of Central European entities.
\n
Only one measurement model can be applied to each IFRS 17 portfolio.
\n
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of two
\n
components, namely a Liability for Remaining Coverage (LRC) and a Liability for Incurred Claims (LIC).
\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
\n
some hybrid products.
\n
\n\n

\n\n\n\n\n\n\n\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 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts
\n
and some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the
\n
invested 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. The IFRS 17 estimation of future
\n
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
\n
insurance 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. Cashflows
\n
that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that are not fixed
\n
at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using a risk-free
\n
rate (i.e. interest rate swap) adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the
\n
current asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities.
\n
The 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 LLPs per currency are
\n
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
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 also a 50% probability of not being able
\n
to meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters. The risk adjustment is
\n
defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows as part of the fulfilment
\n
cashflows. The VaR is calculated at a 75% confidence level. Non-financial risks included in the VaR model are mortality risk,
\n
longevity risk, morbidity/disability risk, lapse risk, expense risk and revision risk. The correlations between the different risk
\n
types are in line with the correlation matrix of Solvency II.
\n
The diversification benefits between life and non-life insurance contracts are not considered in the calculation, also not at
\n
entity level. The risk adjustment is calculated at the level of a set of contracts. There is no diversification effect at this level
\n
either.
\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. For contracts providing multiple services, i.e. insurance coverage, investment return
\n
services and investment management services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following
\n
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. The CSM is determined as the net of the fair value of the underlying
\n
items and the total entity obligation to the policyholder. The change in the variable fee that impacts the CSM is determined
\n
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
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). In the case of onerous contracts, an additional liability to cover expected future losses is added
\n
to the LRC on the balance 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\n
At the end of each reporting
\n
period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts
\n
are earned (i.e. recorded as insurance revenues).
\n\n\n\n\n\n\n\n
Both components of the LRC are allocated to P&L on the basis of passage
\n
of time or the expected timing of incurred claims and benefits, if that pattern better reflects 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 \u2013 either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result
\n
(i.e. related to current or past service) \u2013 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
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 recorded in:
\n
\u2022 insurance service expenses. Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim
\n
payments, changes in the statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 insurance finance income and expense. Main drivers: a change in the discount rate, interest from deposits at the ceding
\n
company.
\n

\n\n\n\n\n\n\n\n
\n
\n
Other matters
\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 (IFIE) between P&L and OCI. This means recognising in
\n
P&L the interest expense on the insurance liability over the reporting period, with this interest expense being calculated using
\n
the locked-in rate (i.e. the rate curve applicable at the inception of the IFRS 17 contract) and recognising in OCI the impact
\n
of changes in the market interest rate over the reporting period, with the exception of:
\n
\u2022 insurance contracts measured under BBA where changes in financial risk have a significant impact on the amounts due
\n
to policyholders (future interest-rate guarantees, profit-sharing), for which the allocation to the income statement is
\n
derived from the amounts expected to be credited to policyholders (expected crediting rate);
\n
\u2022 insurance contracts measured under VFA, for which the current period book yield approach is used. The amount in IFIE
\n
corresponds to the financial result presented in the income statement of the underlying items to ensure that the total net
\n
financial result equals 0 (also referred to as the \u2018mirroring approach\u2019).
\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\n\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
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
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
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
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, for
\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
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
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
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
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 \u2018Net other income\u2019.
\n\n\n\n\n\n\n\n
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
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 \u2018Net other 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
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 the way in which 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 the possibility to reliably measure 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
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 a
\n
n
\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
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
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
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
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
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

\n\n\n\n\n\n\n\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 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
Effects of changes in foreign exchange rates
\n
\n

\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.
\n\n\n\n\n\n\n\n
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
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
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
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;
\n
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
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
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
Exchange rate at 31-12-2024 Exchange rate average in 2024
Change relative to Change relative to
31-12-2023 average in 2023
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 25.185 -2% 25.137 -5%
HUF 411.35 -7% 395.88 -4%
\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
Note 2.1: Segment reporting based on the management structure
\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/activities to be divested).
\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
\n
being 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
\n
for those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of
\n
loans (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
\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 acquisitions and disposals, see Note 6.6. As a result of the finalisation of the sale of the Irish deposit
\n
and loan portfolios in February 2023, the results for Ireland have become immaterial and are no longer presented as a
\n
separate column (as part of the Group Centre) as of 2024.
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag727": { "value": "\n
General / Basic principle
\n
The general accounting principles of KBC Group NV (\u2018KBC\u2019) are based on the IFRS Accounting Standards, as adopted by the
\n
European Union, and on the IFRS Framework.
\n\n
The financial statements of KBC are prepared based on the going concern
\n
assumption. KBC presents each material class of similar items separately.
\n\n\n\n\n\n\n\n\n\n
Dissimilar items are presented separately unless
\n
they are immaterial, and items are only offset when explicitly required or permitted by the relevant IFRS.
\n

\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag728": { "value": "\n
The financial statements of KBC are prepared based on the going concern
\n
assumption. KBC presents each material class of similar items separately.
\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag729": { "value": "\n

\n\n

\n\n

\n\n

\n\n

\n
Financial assets
\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
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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

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\n

\n\n
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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

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\n

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\n

\n

\n

\n\n
Assessment whether contractual cashflows are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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

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\n

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\n\n

\n\n

\n\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n
\n

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

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\n\n

\n\n

\n\n

\n\n
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent reporting date.
\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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting date is lower than the lifetime ECL at origination.
\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

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\n

\n

\n\n

\n

\n\n

\n\n

\n\n

\n\n

\n\n
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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

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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
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\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
Financial liabilities
\n
\n
Financial instruments or their component parts are classified on initial recognition as liabilities 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 KBC 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 KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the
\n
way set out under \u2018Equity\u2019.
\n
\n
Financial liabilities \u2013 recognition and derecognition
\n
\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 some 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,
\n
except for financial liabilities at fair value through profit or loss.
\n
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in the 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
\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 financial 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 modification of terms is accounted for as an extinguishment, any costs or fees incurred are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair value adjustments are always recorded in the income statement.
\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

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\n

\n

\n

\n

\n

\n

\n

\n\n

\n\n

\n

\n\n
\u2022 Financial 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 in the income statement except for fair value changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair value designation is used by KBC for the following reasons:
\n
- managed on an FV basis: KBC designates a financial liability or a group of financial liabilities 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
- Accounting 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
- Hybrid 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 can 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 hybrid instrument can
\n
be designated at fair value. This means that both the embedded derivative and the host contract are measured at
\n
fair value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which
\n
case 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 under this category,
\n
including those used to fund trading activities where no trading intent is present in them (e.g., issued bonds). These
\n
financial liabilities are initially measured at cost, which is the fair value of the consideration received including transaction
\n
costs. Subsequently, they are measured at amortised cost, which is the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial
\n
amount and the maturity amount. The difference between the amount made available and 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
Financial liabilities \u2013 own credit risk
\n
\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 value of the liability are presented in different places: 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 loss\u2019. Amounts recognised in OCI relating to own credit risk are not recycled to the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is prohibited, 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 financial 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
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\n
A financial guarantee contract is one that requires KBC to make specified payments to reimburse holders for losses they incur
\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 of
\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, when appropriate, cumulative amortisation recognised in accordance with the
\n
revenue recognition principle of IFRS 15.
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Reverse repos and repos
\n
\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 or advance, and the
\n
underlying asset is not recognised in the financial statements.
\n
\n
In a repo transaction, KBC sells a security and simultaneously agrees to repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues to 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 as the obligation to pay the repurchase price.
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\n\n
Offsetting
\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) it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis or
\n
to realise the asset and settle the liability simultaneously.
\n

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Fair value
\n
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or paid 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 receive
\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 same as a forced transaction or distress sale.
\n
\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 in OCI. They relate to close-out costs, adjustments for less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty risk (credit value adjustment) and funding costs:
\n
\u2022 Credit 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
\n
risk 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.
\n
It is similar to a CVA, but the expected future negative fair value of the contracts is taken into consideration.
\n
\u2022 A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to ensure
\n
that the (future) funding costs or income attached to entering into and hedging such instruments are factored in when
\n
measuring their value.
\n

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\n\n
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of net investments in foreign operations.
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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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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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
Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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).
\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.
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
\n
The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
\n
\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
\n
this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets 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
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag730": { "value": "\n

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Financial assets
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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.
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Financial assets \u2013 recognition and derecognition
\n
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Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
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the balance sheet and that a new financial asset is recognised based 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.
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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
\n
uncollectable. This means that there is no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
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Classification of debt instruments and equity instruments
\n
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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 as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\n
obligation requiring the issuer to deliver cash or exchange financial assets or financial liabilities with another entity under
\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
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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
Assessment whether contractual cashflows are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised 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
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent 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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting 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
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag731": { "value": "\n

\n\n

\n\n

\n
Financial assets
\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
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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
Assessment whether contractual cashflows are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of net investments in foreign operations.
\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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag733": { "value": "\n

\n\n

\n
Financial assets
\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
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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
Assessment whether contractual cashflows are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised 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
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent 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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting 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
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of 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
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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag734": { "value": "\n

\n
Financial assets
\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
\n\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Business model assessment
\n
\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:
\n
\u2022 the 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
\n
the sale of the assets);
\n
\u2022 how the performance of the portfolio is evaluated and reported to KBC\u2019s Executive Committee and Board of Directors;
\n
\u2022 the risks that affect the performance of the business model (and the financial assets held within that model) and how
\n
those risks are managed;
\n
\u2022 how 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 the frequency, volume and timing of sales in prior periods, the reasons for such sales and KBC\u2019s expectations of future
\n
sales activity. However, information about sales activity is not considered in isolation, but as part of an overall assessment
\n
of how KBC\u2019s stated objective for managing the financial assets is achieved and how cashflows are realised.
\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
Assessment whether contractual cashflows are solely payments of principal and interest (SPPI)
\n
\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 money and for the credit risk associated with the principal amount
\n
outstanding during a particular period of time and for other basic lending risks and costs (e.g., liquidity risk and administrative
\n
costs), as well as profit margin. In assessing whether contractual cashflows are solely payments of principal and interest, KBC
\n
considers the contractual terms of the instrument, which entails assessing whether the financial asset contains a contractual
\n
term that could change the timing or amount of contractual cashflows such that the instrument would not meet this condition.
\n
In making the assessment, KBC considers:
\n
\u2022 contingent events that could change the amount and timing of cashflows;
\n
\u2022 leverage features;
\n
\u2022 prepayment and extension terms;
\n
\u2022 terms that limit KBC\u2019s claim to cashflows from specified assets (e.g., non-recourse asset arrangements); and
\n
\u2022 features 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
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised 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
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent 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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting 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
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of 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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag732": { "value": "\n

\n
Financial assets \u2013 recognition and derecognition
\n
\n
Recognition: financial assets and liabilities are recognised in the balance sheet when KBC becomes party to the contractual
\n
provisions of the instruments. Regular-way purchases or sales of financial assets are 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
\n
value plus transaction costs directly attributable to their acquisition.
\n
\n\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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
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 no reasonable expectation that 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
\n
settlement process in each jurisdiction, and local legislation. If a loan is uncollectable, the gross carrying value is written off
\n
directly against the corresponding impairment. Recoveries of amounts previously written off are recognised as reversals of
\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. The latter entails the forfeiture of the legal right to recover all
\n
or part of the debt outstanding to the client.
\n
\n
Classification of debt instruments and equity instruments
\n
\n
On initial recognition of a financial asset, KBC first assesses the contractual terms of the instrument in order to classify it as
\n
an equity instrument or a debt instrument. An equity instrument is defined as any contract that evidences a residual 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
\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
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag735": { "value": "\n
Derecognition and modification: KBC derecognises a financial asset when the contractual cashflows from the asset expire
\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 new 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
\n
the balance sheet and that a new financial asset is recognised based 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag742": { "value": "\n
Classification and measurement \u2013 debt instruments
\n
\n
If KBC concludes that a financial asset is a debt instrument, then \u2013 upon initial recognition \u2013 it can be classified in one of the
\n
following categories:
\n
\u2022 Measured at fair value through profit or loss (FVPL);
\n
- Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 this category includes held-for-trading instruments
\n
(HFT);
\n
- Designated upon initial recognition at fair value through profit or loss (FVO);
\n
\u2022 Measured at fair value through other comprehensive income (FVOCI);
\n
\u2022 Measured at amortised cost (AC).
\n
Debt instruments have to be classified in the FVPL category where (i) they are 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.
\n
\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 significantly reduces an
\n
accounting mismatch that would otherwise arise.
\n
\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 The asset is held within a business model whose objective is achieved by both collecting contractual cashflows and selling
\n
financial assets;
\n
\u2022 The 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
A debt instrument is measured at AC only if it meets both of the following conditions and is not designated to be measured
\n
at FVO:
\n
\u2022 The asset is held within a business model whose objective is to hold assets in order to collect contractual cashflows;
\n
\u2022 The 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
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

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

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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
Financial liabilities \u2013 classification and measurement
\n
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair 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
\u2022 Financial 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 in the income statement except for fair value changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair value designation is used by KBC for the following reasons:
\n
- managed on an FV basis: KBC designates a financial liability or a group of financial liabilities 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
- Accounting 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
- Hybrid 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 can 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 hybrid instrument can
\n
be designated at fair value. This means that both the embedded derivative and the host contract are measured at
\n
fair value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which
\n
case 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 under this category,
\n
including those used to fund trading activities where no trading intent is present in them (e.g., issued bonds). These
\n
financial liabilities are initially measured at cost, which is the fair value of the consideration received including transaction
\n
costs. Subsequently, they are measured at amortised cost, which is the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial
\n
amount and the maturity amount. The difference between the amount made available and 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag743": { "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
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair value adjustments are always recorded in the income statement.
\n

\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradingIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag750": { "value": "\n
Reclassifications
\n
\n
Financial assets are not reclassified subsequent to their initial recognition except in a period after KBC changes its business
\n
model for managing financial assets, which can 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag752": { "value": "\n
Classification and measurement \u2013 equity instruments
\n
\n
Financial equity instruments are classified in one of the following categories:
\n
\u2022 Mandatorily measured at fair value through profit or loss (MFVPL) \u2013 only includes equity instruments held for trading (HFT);
\n
\u2022 Equity instruments elected to be measured at fair value through other comprehensive income (FVOCI).
\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 recognised in other comprehensive income and without any recycling to the income statement,
\n
even when the investment is disposed of. The only exception applies to dividend income, which is recognised in the income
\n
statement under \u2018Dividend income\u2019.
\n

\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag753": { "value": "\n

\n\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag754": { "value": "\n
Classification and measurement \u2013 derivatives (trading and hedging)
\n
\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.
\n
\n
Trading derivatives
\n
Derivatives are always measured at fair value and KBC draws distinctions as follows:
\n
\u2022 Derivatives 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
\n
without applying hedge accounting. The interest component of these derivatives is recognised under \u2018Net interest
\n
income\u2019, while all other fair value changes are recognised under \u2018Net result from financial instruments at fair value through
\n
profit or loss\u2019.
\n
\u2022 Derivatives held with no intent of 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
\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
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of 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
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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag760": { "value": "\n

\n\n

\n

\n
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised 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
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent 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
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting 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
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag761": { "value": "\n

\n

\n
Financial assets \u2013 impairment
\n
\n
Definition of default
\n
\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 is considered in default if any of the
\n
following conditions is fulfilled:
\n
\u2022 There is a significant deterioration in creditworthiness;
\n
\u2022 The asset is flagged as non-accrual;
\n
\u2022 The 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
\n
years of the first forbearance measure being granted, or when a forborne asset becomes more than 30 days past due
\n
within the two-year period);
\n
\u2022 KBC has filed for the borrower\u2019s bankruptcy;
\n
\u2022 The counterparty has filed for bankruptcy or sought similar protection measures;
\n
\u2022 The credit facility granted to the client has been terminated.
\n
\n
KBC applies a backstop for facilities whose status is \u201890 days 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
\n
Expected credit loss model (ECL model) \u2013 general
\n
\n\n
The ECL model is used to measure impairment of financial assets.
\n
\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 Financial assets measured at AC and at FVOCI;
\n
\u2022 Loan commitments and financial guarantees;
\n
\u2022 Finance lease receivables;
\n
\u2022 Trade and other receivables.
\n

\n\n\n\n\n\n\n\n\n\n
\n
No ECLs are calculated for investments in equity instruments.
\n
\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 increase in credit risk).
\n
\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. Unless they are already credit impaired, all financial assets are classified in \u2018Stage
\n
1\u2019 at the time of initial recognition and 12-month ECL is recognised. Once a significant increase in credit risk occurs after initial
\n
recognition, the asset is moved into \u2018Stage 2\u2019 and lifetime ECL is recognised. Once an asset meets the definition of default, it
\n
is moved into \u2018Stage 3\u2019.
\n\n
For trade receivables, IFRS 9 allows for a practical expedient. The ECL 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
Impairment gains and losses on financial assets are recognised under the \u2018Impairment\u2019 heading in 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 sheet at their carrying
\n
value, which is their fair value on the reporting date. The adjustment for the ECL is recognised as a reclassification adjustment
\n
between the income statement and OCI.
\n
\n

\n\n\n\n\n\n\n\n\n\n
Significant increase in credit risk since initial recognition
\n
\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 a significant increase in credit risk is important for the staging of financial assets.
\n
The assessment of a significant increase in credit risk is a relative assessment based on the credit risk that was assigned
\n
upon initial recognition. This is a multi-factor assessment and, therefore, KBC has developed a multi-tier approach for both
\n
the bond portfolio and the loan portfolio.
\n
\n
Multi-tier approach (MTA) \u2013 bond portfolio
\n
For the bond portfolio, the MTA consists of three tiers:
\n
\u2022 Low-credit exception: 12-month ECL is always recognised for bonds if they have a low credit risk on the reporting date
\n
(i.e. \u2018Stage 1\u2019). KBC uses this exception for investment grade bonds.
\n
\u2022 Lifetime probability of default (LTPD) (only applicable if the first-tier criterion is not met): this is a relative assessment that
\n
compares the lifetime probability of default (LTPD) upon initial recognition to that on the reporting date. The relative
\n
change in LTPD that triggers staging is an increase of 200%.
\n
\u2022 Management 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 two tiers of the MTA. Examples of idiosyncratic events are unexpected developments in the
\n
macroeconomic environment (for example, the coronavirus crisis), uncertainties about geopolitical events (such as a war)
\n
and the secondary impact of material defaults (e.g., on the suppliers, clients and employees of a defaulted company).
\n
\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 as soon as it meets the definition of default. The MTA is symmetrical, i.e. bonds that have been moved into \u2018Stage 2\u2019 or
\n
\u2018Stage 3\u2019 can revert to \u2018Stage 1\u2019 or \u2018Stage 2\u2019 if the tier criterion that triggered the migration is not met on a subsequent
\n
reporting date.
\n
\n
Loan portfolio
\n
\n
For the loan portfolio, KBC uses a five-tier approach. This MTA is a waterfall approach (i.e. if assessing the first tier does not
\n
result in a move into \u2018Stage 2\u2019, the second tier is assessed, and so on). In the end, if all tiers are assessed without triggering a
\n
migration to \u2018Stage 2\u2019, the credit remains in \u2018Stage 1\u2019.
\n
\u2022 Lifetime probability of default (LTPD): the LTPD is used as the main criterion for assessing an increase in credit risk. It is a
\n
relative assessment that compares the lifetime probability of default (LTPD) upon initial recognition to that on the
\n
reporting date. KBC does the assessment at facility level for each reporting period. The relative change in LTPD that
\n
triggers staging is an increase of 200%.
\n
\u2022 Forbearance: forborne financial assets are always considered as \u2018Stage 2\u2019 unless they are already defaulted, in which
\n
case they are moved into \u2018Stage 3\u2019.
\n
\u2022 Days past due: KBC uses the backstop defined in the standard. A financial asset that is more than 30 days past due is
\n
moved into \u2018Stage 2\u2019.
\n
\u2022 Watch list: KBC uses the watch list criterion as a backstop for its loan portfolio to move into \u2018Stage 2\u2019. The watch list
\n
includes credit with an increased credit risk but which is not (yet) classified as default/non-performing and which is subject
\n
to enhanced monitoring and review by the bank. KBC does this assessment at client level for each reporting period.
\n
\u2022 Management 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 tiers of the MTA (see above for a number of examples).
\n
\n
A financial asset in scope of the 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 a subsequent reporting date.
\n
\n

\n\n\n\n\n\n\n\n\n\n
Measurement of ECL
\n
\n
ECL is calculated as the product of probability of default (PD), estimated exposure at default (EAD) and loss given default
\n
(LGD).
\n
\n
ECL is calculated to reflect:
\n
\u2022 an unbiased, probability-weighted amount;
\n
\u2022 the time value of money; and
\n
\u2022 information about past events, current conditions and forecast economic conditions.
\n
\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
\n
KBC uses specific IFRS 9 models for PD, EAD and LGD in order to calculate ECL. As much as possible 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 provided in the \u2018Internal Modelling\u2019 section of the Risk Report at www.kbc.com.
\n
That said, KBC ensures that the Basel models are adapted so they comply with IFRS 9:
\n
\u2022 KBC removes the conservatism that is required by the regulator for Basel models;
\n
\u2022 KBC adjusts how macroeconomic parameters affect the outcome to ensure that the IFRS 9 models reflect a \u2018point-in-
\n
time\u2019 estimate rather than one that is \u2018through the cycle\u2019 (as required by the regulator);
\n
\u2022 KBC applies forward-looking macroeconomic information in the models.
\n
\n
\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
\n
KBC uses the IRB and Standardised models to assign 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 is determined based on expert input and external ratings.
\n
\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 Chief 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 to be used for the ECL calculation
\n
based on the input of the Chief Economist. The incorporation of the macroeconomic variables included in these scenarios in
\n
the PD, EAD and LGD components of the ECL calculation is based on statistical correlation in historical datasets.
\n
\n
The maximum period for measurement of ECL is the maximum contractual period (including extensions), except for specific
\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 to credit risk to the
\n
contractual period. Only for such assets can a measurement period extend beyond the contractual period.
\n
\n
\n
Purchased or originated credit impaired (POCI) assets
\n
\n
KBC defines POCI assets as financial assets in scope of the IFRS 9 impairment standard that are already defaulted at
\n
origination (i.e. they then meet the definition of default). POCI assets are initially 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 reporting date is lower than the lifetime ECL at origination.
\n

\n\n\n\n\n\n\n\n\n\n
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
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 a
\n
n
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag784": { "value": "\n

\n\n
Significant judgements and uncertainties
\n
\n
Calculating ECL (and the significant increase in credit risk since initial recognition) requires significant judgement of various
\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
Insurance contracts
\n
\n
General
\n
\n
Scope
\n
\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. Whether insurance risk is significant is
\n
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 types 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 the contract and thus accounted for
\n
in accordance with the appropriate IFRS.
\n
\n
Level of aggregation
\n
\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 IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);
\n
\u2022 Annual cohort (year of inception of the policy);
\n
\u2022 Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022 Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\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 (managed together). As a minimum, the portfolios are broken down as follows:
\n
\u2022 Life
\n
Unit-linked
\n
Non-unit-linked
\n
Hybrid products
\n
\u2022 Non-life insurance
\n
Personal insurance
\n
Liabilities \u2013 MTPL
\n
Liabilities \u2013 other than MTPL
\n
Property (including other) other than fully comprehensive
\n
Fully comprehensive
\n
Accepted reinsurance
\n
\u2022 Ceded reinsurance
\n
\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
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\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 If CSM < 0 when risk adjustment is calculated at a 75% confidence level, onerous group of contracts
\n
\u2022 If CSM > 0 when risk adjustment is calculated at a 75% confidence level AND
\n
- if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, doubtful group of contracts
\n
- if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, profitable group of contracts
\n
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA), facts and circumstances indicating that the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio of more than 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
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous profitability 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 profitability assessment had been
\n
carried out at the level of the individual contract.
\n
\n
Recognition \u2013 derecognition
\n
\n
KBC recognises a group of insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022 The beginning of the coverage period of the group of contracts;
\n
\u2022 The date when the first payment from a policyholder in the group becomes due;
\n
\u2022 For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from the policyholder is deemed to 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 the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022 The beginning of the coverage period of the group of reinsurance contracts held;
\n
\u2022 The 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 reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\n
Valuation
\n
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take into account the insurance contract
\n
characteristics.
\n
\u2022 The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022 The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n
\u2022 The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder depend significantly (for more than 50%) on the return of the invested assets. This is a
\n
mandatory measurement model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some
\n
hybrid products of Central European entities.
\n
Only one measurement model can be applied to each IFRS 17 portfolio.
\n
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of two
\n
components, namely a Liability for Remaining Coverage (LRC) and a Liability for Incurred Claims (LIC).
\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
\n
some hybrid products.
\n
\n\n

\n\n\n\n\n\n\n\n
\n
\n\n
\u2022 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts
\n
and some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the
\n
invested 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. The IFRS 17 estimation of future
\n
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
\n
insurance 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. Cashflows
\n
that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that are not fixed
\n
at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using a risk-free
\n
rate (i.e. interest rate swap) adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the
\n
current asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities.
\n
The 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 LLPs per currency are
\n
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
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 also a 50% probability of not being able
\n
to meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters. The risk adjustment is
\n
defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows as part of the fulfilment
\n
cashflows. The VaR is calculated at a 75% confidence level. Non-financial risks included in the VaR model are mortality risk,
\n
longevity risk, morbidity/disability risk, lapse risk, expense risk and revision risk. The correlations between the different risk
\n
types are in line with the correlation matrix of Solvency II.
\n
The diversification benefits between life and non-life insurance contracts are not considered in the calculation, also not at
\n
entity level. The risk adjustment is calculated at the level of a set of contracts. There is no diversification effect at this level
\n
either.
\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. For contracts providing multiple services, i.e. insurance coverage, investment return
\n
services and investment management services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following
\n
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. The CSM is determined as the net of the fair value of the underlying
\n
items and the total entity obligation to the policyholder. The change in the variable fee that impacts the CSM is determined
\n
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
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). In the case of onerous contracts, an additional liability to cover expected future losses is added
\n
to the LRC on the balance 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\n
At the end of each reporting
\n
period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts
\n
are earned (i.e. recorded as insurance revenues).
\n\n\n\n\n\n\n\n
Both components of the LRC are allocated to P&L on the basis of passage
\n
of time or the expected timing of incurred claims and benefits, if that pattern better reflects 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 \u2013 either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result
\n
(i.e. related to current or past service) \u2013 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
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 recorded in:
\n
\u2022 insurance service expenses. Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim
\n
payments, changes in the statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 insurance finance income and expense. Main drivers: a change in the discount rate, interest from deposits at the ceding
\n
company.
\n

\n\n\n\n\n\n\n\n
\n
\n
Other matters
\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 (IFIE) between P&L and OCI. This means recognising in
\n
P&L the interest expense on the insurance liability over the reporting period, with this interest expense being calculated using
\n
the locked-in rate (i.e. the rate curve applicable at the inception of the IFRS 17 contract) and recognising in OCI the impact
\n
of changes in the market interest rate over the reporting period, with the exception of:
\n
\u2022 insurance contracts measured under BBA where changes in financial risk have a significant impact on the amounts due
\n
to policyholders (future interest-rate guarantees, profit-sharing), for which the allocation to the income statement is
\n
derived from the amounts expected to be credited to policyholders (expected crediting rate);
\n
\u2022 insurance contracts measured under VFA, for which the current period book yield approach is used. The amount in IFIE
\n
corresponds to the financial result presented in the income statement of the underlying items to ensure that the total net
\n
financial result equals 0 (also referred to as the \u2018mirroring approach\u2019).
\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\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 a
\n
n
\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
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
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, 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

\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
\n
key assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on
\n
standard mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and
\n
associated overhead expenses which are considered directly attributable. Expenses are considered directly attributable
\n
if they are 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
\n
assumptions for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling
\n
costs, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors
\n
such as court awards, legislation and discounting.
\n

\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag786": { "value": "\n
Cash, cash balances with central banks and other demand deposits with credit institutions
\n
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag787": { "value": "\n

\n\n

\n
Financial liabilities
\n
\n
Financial instruments or their component parts are classified on initial recognition as liabilities 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 KBC 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 KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the
\n
way set out under \u2018Equity\u2019.
\n
\n
Financial liabilities \u2013 recognition and derecognition
\n
\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 some 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,
\n
except for financial liabilities at fair value through profit or loss.
\n
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in the 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
\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 financial 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 modification of terms is accounted for as an extinguishment, any costs or fees incurred are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair 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
\u2022 Financial 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 in the income statement except for fair value changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair value designation is used by KBC for the following reasons:
\n
- managed on an FV basis: KBC designates a financial liability or a group of financial liabilities 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
- Accounting 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
- Hybrid 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 can 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 hybrid instrument can
\n
be designated at fair value. This means that both the embedded derivative and the host contract are measured at
\n
fair value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which
\n
case 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 under this category,
\n
including those used to fund trading activities where no trading intent is present in them (e.g., issued bonds). These
\n
financial liabilities are initially measured at cost, which is the fair value of the consideration received including transaction
\n
costs. Subsequently, they are measured at amortised cost, which is the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial
\n
amount and the maturity amount. The difference between the amount made available and 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
Financial liabilities \u2013 own credit risk
\n
\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 value of the liability are presented in different places: 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 loss\u2019. Amounts recognised in OCI relating to own credit risk are not recycled to the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is prohibited, 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 financial 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
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\n
A financial guarantee contract is one that requires KBC to make specified payments to reimburse holders for losses they incur
\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 of
\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, when appropriate, cumulative amortisation recognised in accordance with the
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag788": { "value": "\n

\n
Financial liabilities
\n
\n
Financial instruments or their component parts are classified on initial recognition as liabilities 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 KBC 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 KBC has a contractual obligation to settle the financial instrument in a variable number of its own shares.
\n
\n
A financial instrument is classified as an equity instrument if neither condition is met. In that case, it is accounted for in the
\n
way set out under \u2018Equity\u2019.
\n
\n
Financial liabilities \u2013 recognition and derecognition
\n
\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 some 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,
\n
except for financial liabilities at fair value through profit or loss.
\n
\n
Financial liabilities are derecognised when they are extinguished, i.e. the obligation specified in the 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
\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 financial 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 modification of terms is accounted for as an extinguishment, any costs or fees incurred are
\n
recognised as part of the gain or loss on the extinguishment.
\n
\n\n

\n
Financial liabilities \u2013 classification and measurement
\n
\n
KBC classifies recognised financial liabilities in three different categories, as provided for by IFRS 9:
\n\n
\u2022 Financial 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
\n
portfolio of financial instruments held for trading separately by the trading desk and for which there is a recent pattern of
\n
short-term profit-taking. Held-for-trading liabilities can include derivatives, short positions in debt and equity instruments,
\n
\n
time deposits and debt certificates. Derivative liabilities are split by KBC into trading and hedging derivatives as in the
\n
case of derivative assets. Initially, held-for-trading liabilities are measured at fair value. At the end of the reporting period,
\n
derivative liabilities are measured at fair value. Fair 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
\u2022 Financial 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 in the income statement except for fair value changes related to changes in
\n
own credit risk, which are presented separately in OCI. The fair value designation is used by KBC for the following reasons:
\n
- managed on an FV basis: KBC designates a financial liability or a group of financial liabilities 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
- Accounting 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
- Hybrid 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 can 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 hybrid instrument can
\n
be designated at fair value. This means that both the embedded derivative and the host contract are measured at
\n
fair value. KBC uses this option when structured products contain non-closely-related embedded derivatives, in which
\n
case 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 under this category,
\n
including those used to fund trading activities where no trading intent is present in them (e.g., issued bonds). These
\n
financial liabilities are initially measured at cost, which is the fair value of the consideration received including transaction
\n
costs. Subsequently, they are measured at amortised cost, which is the amount at which the funding liability was initially
\n
recognised minus principal repayments, plus or minus the cumulative amortisation of any difference between that initial
\n
amount and the maturity amount. The difference between the amount made available and 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
Financial liabilities \u2013 own credit risk
\n
\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 value of the liability are presented in different places: 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 loss\u2019. Amounts recognised in OCI relating to own credit risk are not recycled to the
\n
income statement even if the liability is derecognised and the amounts are realised. Although recycling is prohibited, 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 financial 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
\n\n
Financial liabilities \u2013 financial guarantee contract
\n
\n
A financial guarantee contract is one that requires KBC to make specified payments to reimburse holders for losses they incur
\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 of
\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, when appropriate, cumulative amortisation recognised in accordance with the
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag796": { "value": "\n
Financial liabilities \u2013 financial guarantee contract
\n
\n
A financial guarantee contract is one that requires KBC to make specified payments to reimburse holders for losses they incur
\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 of
\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, when appropriate, cumulative amortisation recognised in accordance with the
\n
revenue recognition principle of IFRS 15.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag797": { "value": "\n
Reverse repos and repos
\n
\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 or advance, and the
\n
underlying asset is not recognised in the financial statements.
\n
\n
In a repo transaction, KBC sells a security and simultaneously agrees to repurchase it (or a substantially similar asset) at a
\n
fixed price on a future date. KBC continues to 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 as the obligation to pay the repurchase price.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag798": { "value": "\n
Offsetting
\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) it
\n
currently has a legally enforceable right to set off the recognised amounts and (ii) it intends either to settle on a net basis or
\n
to realise the asset and settle the liability simultaneously.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag801": { "value": "\n
Fair value
\n
\n
KBC defines \u2018fair value\u2019 as \u2018the price that would be received for sale of an asset or paid 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 receive
\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 same as a forced transaction or distress sale.
\n
\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 in OCI. They relate to close-out costs, adjustments for less-liquid positions or markets,
\n
mark-to-model-related valuation adjustments, counterparty risk (credit value adjustment) and funding costs:
\n
\u2022 Credit 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
\n
risk 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.
\n
It is similar to a CVA, but the expected future negative fair value of the contracts is taken into consideration.
\n
\u2022 A funding value adjustment (FVA) is a correction made to the fair value of uncollateralised derivatives in order to ensure
\n
that the (future) funding costs or income attached to entering into and hedging such instruments are factored in when
\n
measuring their value.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag812": { "value": "\n

\n\n
Hedge accounting
\n
\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 certain 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 instrument(s) and hedged item(s), including the 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 hedging relationship and on an ongoing basis, of whether the hedging instrument(s)
\n
is/are expected to be highly effective in offsetting the changes in the fair value or cashflows of the respective hedged item(s)
\n
during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-
\n
125%. 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
\n
KBC uses the following hedge accounting techniques: cashflow hedges, fair value micro-hedges, fair value hedges for a
\n
portfolio of interest rate risk, and hedges of 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 highly probable forecast transaction that could affect the
\n
income statement, the effective portion of changes in the fair value 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 from financial instruments at fair value through profit or
\n
loss\u2019. The amount recognised in OCI is reclassified 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 the 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
\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
\n
expected to occur, the cumulative gain or loss 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.
\n
\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 from interest rate swaps is recognised in \u2018Net interest
\n
income\u2019. If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for fair
\n
value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued prospectively. Any
\n
adjustment up to the point of discontinuation that is made to a hedged item for which the effective interest method is used
\n
is amortised to the income statement as part of the recalculated effective interest rate of the item over its remaining life or
\n
recognised directly when the hedged item is derecognised.
\n
\n
Fair value hedges for a portfolio of interest-rate risk (macro-hedging): the EU\u2019s macro-hedging carve-out means that a group
\n
of derivatives (or proportions of them) can be viewed in combination and jointly designated as a hedging instrument, and
\n
removes some of the limitations on fair value hedge accounting relating to hedging core deposits 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 falls below the designated amount of that bucket.
\n
KBC hedges the interest rate risk of the financial asset portfolios and the financial liability portfolios. Interest rate swaps are
\n
measured at fair value, with fair-value changes being reported in the income statement. Accrued interest 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 a hedge is ineffective, the cumulative fair value change 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 the balance sheet if ineffectiveness is due to derecognition of the corresponding
\n
financial assets and liabilities.
\n
\n
Hedge of net investments in foreign operations: when a derivative instrument or a non-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
\n
hedging instrument is recognised in the hedging reserve (investment in foreign operation) in OCI. Any ineffective portion of
\n
the changes in the fair 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1000": { "value": "\n

\n\n

\n\n
Insurance contracts
\n
\n
General
\n
\n
Scope
\n
\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. Whether insurance risk is significant is
\n
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 types 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 the contract and thus accounted for
\n
in accordance with the appropriate IFRS.
\n
\n
Level of aggregation
\n
\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 IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);
\n
\u2022 Annual cohort (year of inception of the policy);
\n
\u2022 Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022 Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\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 (managed together). As a minimum, the portfolios are broken down as follows:
\n
\u2022 Life
\n
Unit-linked
\n
Non-unit-linked
\n
Hybrid products
\n
\u2022 Non-life insurance
\n
Personal insurance
\n
Liabilities \u2013 MTPL
\n
Liabilities \u2013 other than MTPL
\n
Property (including other) other than fully comprehensive
\n
Fully comprehensive
\n
Accepted reinsurance
\n
\u2022 Ceded reinsurance
\n
\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
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\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 If CSM < 0 when risk adjustment is calculated at a 75% confidence level, onerous group of contracts
\n
\u2022 If CSM > 0 when risk adjustment is calculated at a 75% confidence level AND
\n
- if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, doubtful group of contracts
\n
- if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, profitable group of contracts
\n
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA), facts and circumstances indicating that the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio of more than 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
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous profitability 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 profitability assessment had been
\n
carried out at the level of the individual contract.
\n
\n
Recognition \u2013 derecognition
\n
\n
KBC recognises a group of insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022 The beginning of the coverage period of the group of contracts;
\n
\u2022 The date when the first payment from a policyholder in the group becomes due;
\n
\u2022 For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from the policyholder is deemed to 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 the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022 The beginning of the coverage period of the group of reinsurance contracts held;
\n
\u2022 The 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 reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\n
Valuation
\n
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take into account the insurance contract
\n
characteristics.
\n
\u2022 The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022 The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n
\u2022 The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder depend significantly (for more than 50%) on the return of the invested assets. This is a
\n
mandatory measurement model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some
\n
hybrid products of Central European entities.
\n
Only one measurement model can be applied to each IFRS 17 portfolio.
\n
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of two
\n
components, namely a Liability for Remaining Coverage (LRC) and a Liability for Incurred Claims (LIC).
\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
\n
some hybrid products.
\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 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts
\n
and some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the
\n
invested 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. The IFRS 17 estimation of future
\n
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
\n
insurance 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. Cashflows
\n
that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that are not fixed
\n
at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using a risk-free
\n
rate (i.e. interest rate swap) adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the
\n
current asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities.
\n
The 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 LLPs per currency are
\n
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
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 also a 50% probability of not being able
\n
to meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters. The risk adjustment is
\n
defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows as part of the fulfilment
\n
cashflows. The VaR is calculated at a 75% confidence level. Non-financial risks included in the VaR model are mortality risk,
\n
longevity risk, morbidity/disability risk, lapse risk, expense risk and revision risk. The correlations between the different risk
\n
types are in line with the correlation matrix of Solvency II.
\n
The diversification benefits between life and non-life insurance contracts are not considered in the calculation, also not at
\n
entity level. The risk adjustment is calculated at the level of a set of contracts. There is no diversification effect at this level
\n
either.
\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. For contracts providing multiple services, i.e. insurance coverage, investment return
\n
services and investment management services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following
\n
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. The CSM is determined as the net of the fair value of the underlying
\n
items and the total entity obligation to the policyholder. The change in the variable fee that impacts the CSM is determined
\n
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
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). In the case of onerous contracts, an additional liability to cover expected future losses is added
\n
to the LRC on the balance 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\n
At the end of each reporting
\n
period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts
\n
are earned (i.e. recorded as insurance revenues).
\n\n\n\n\n\n\n\n
Both components of the LRC are allocated to P&L on the basis of passage
\n
of time or the expected timing of incurred claims and benefits, if that pattern better reflects 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 \u2013 either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result
\n
(i.e. related to current or past service) \u2013 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
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 recorded in:
\n
\u2022 insurance service expenses. Main drivers: updates of fulfilment cashflows, i.e. higher or lower total expected claim
\n
payments, changes in the statistical percentage of internal claims handling expenses, etc.; or
\n
\u2022 insurance finance income and expense. Main drivers: a change in the discount rate, interest from deposits at the ceding
\n
company.
\n

\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1001": { "value": "\n

\n\n
Insurance contracts
\n
\n
General
\n
\n
Scope
\n
\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. Whether insurance risk is significant is
\n
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 types 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 the contract and thus accounted for
\n
in accordance with the appropriate IFRS.
\n
\n
Level of aggregation
\n
\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 IFRS 17 portfolio (aggregation of contracts subject to similar risks and managed together);
\n
\u2022 Annual cohort (year of inception of the policy);
\n
\u2022 Profitability of the group of contracts (onerous, profitable, doubtful; assessed at inception);
\n
\u2022 Set of contracts (aggregation of contracts with a homogeneous profitability expectation).
\n
\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 (managed together). As a minimum, the portfolios are broken down as follows:
\n
\u2022 Life
\n
Unit-linked
\n
Non-unit-linked
\n
Hybrid products
\n
\u2022 Non-life insurance
\n
Personal insurance
\n
Liabilities \u2013 MTPL
\n
Liabilities \u2013 other than MTPL
\n
Property (including other) other than fully comprehensive
\n
Fully comprehensive
\n
Accepted reinsurance
\n
\u2022 Ceded reinsurance
\n
\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
Aggregation by group of contracts: onerous, profitable or doubtful
\n
\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 If CSM < 0 when risk adjustment is calculated at a 75% confidence level, onerous group of contracts
\n
\u2022 If CSM > 0 when risk adjustment is calculated at a 75% confidence level AND
\n
- if CSM < 0 when the risk adjustment is calculated at a 90% confidence level, doubtful group of contracts
\n
- if CSM > 0 when the risk adjustment is calculated at a 90% confidence level, profitable group of contracts
\n
\n
PAA \u2013 Expected profitability on initial recognition
\n
For the Premium Allocation Approach (PAA), facts and circumstances indicating that the group of contracts can be onerous
\n
are assessed by the IFRS 17 expected economic combined ratio of more than 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
\n
Aggregation by set of contracts
\n
A set of contracts is an aggregation of contracts with a homogeneous profitability 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 profitability assessment had been
\n
carried out at the level of the individual contract.
\n
\n
Recognition \u2013 derecognition
\n
\n
KBC recognises a group of insurance contracts (and accepted reinsurance contracts) it issues from the earliest of the
\n
following:
\n
\u2022 The beginning of the coverage period of the group of contracts;
\n
\u2022 The date when the first payment from a policyholder in the group becomes due;
\n
\u2022 For a group of onerous contracts, when the group becomes onerous.
\n
If there is no contractual due date, the first payment from the policyholder is deemed to 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 the initial recognition criteria.
\n
KBC recognises a group of ceded reinsurance contracts held from the earlier of the following:
\n
\u2022 The beginning of the coverage period of the group of reinsurance contracts held;
\n
\u2022 The 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 reinsurance contracts held that provide proportionate coverage until the date that
\n
any underlying insurance contract is initially recognised, if that date is later than the beginning of the coverage period of the
\n
group of reinsurance contracts held.
\n
An insurance liability is derecognised from the balance sheet when it is extinguished, i.e. when the obligation specified in the
\n
contract is discharged or cancelled or expires.
\n
\n
Valuation
\n
\n
IFRS 17 applies uniform measurement principles for insurance liabilities that take into account the insurance contract
\n
characteristics.
\n
\u2022 The general model, the Building Block Approach (BBA), is applied to most Life products.
\n
\u2022 The optional Premium Allocation Approach (PAA) is a simplified measurement model that can be used when meeting the
\n
PAA eligibility criteria and is applied to most Non-life products and reinsurance contracts.
\n
\u2022 The Variable Fee Approach (VFA) is an adjusted Building Block Approach for Life insurance contracts where cashflows to
\n
be paid to the policyholder depend significantly (for more than 50%) on the return of the invested assets. This is a
\n
mandatory measurement model when fulfilling the VFA eligibility criteria and is applied to unit-linked products and some
\n
hybrid products of Central European entities.
\n
Only one measurement model can be applied to each IFRS 17 portfolio.
\n
\n
The insurance liabilities represent all rights and obligations arising from insurance contracts issued and consist of two
\n
components, namely a Liability for Remaining Coverage (LRC) and a Liability for Incurred Claims (LIC).
\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
\n
some hybrid products.
\n
\n\n
\u2022 Valuation according to the VFA is applied in Central European entities to calculate the liability for unit-linked contracts
\n
and some hybrid products where the cashflows to be paid to the policyholder depend significantly on the return of the
\n
invested 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. The IFRS 17 estimation of future
\n
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
\n
insurance 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. Cashflows
\n
that vary with underlying items are typically cashflows such as interest-rate guarantees on future premiums that are not fixed
\n
at inception of the contract, future profit sharing, future lapses, etc. A top-down approach is achieved by using a risk-free
\n
rate (i.e. interest rate swap) adjusted with a spread based on a reference portfolio of assets. Such a portfolio is based on the
\n
current asset mix an entity holds. In addition, the discount curve must only reflect the characteristics of the insurance liabilities.
\n
The 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 LLPs per currency are
\n
defined by taking the last available tenor for the risk-free rate in the relevant currency.
\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 also a 50% probability of not being able
\n
to meet future obligations for outstanding contracts.
\n
Life insurance liabilities are characterised by (long-term) cashflows based on biometric parameters. The risk adjustment is
\n
defined as the difference between the Value at Risk (VaR) and the best estimate of future cashflows as part of the fulfilment
\n
cashflows. The VaR is calculated at a 75% confidence level. Non-financial risks included in the VaR model are mortality risk,
\n
longevity risk, morbidity/disability risk, lapse risk, expense risk and revision risk. The correlations between the different risk
\n
types are in line with the correlation matrix of Solvency II.
\n
The diversification benefits between life and non-life insurance contracts are not considered in the calculation, also not at
\n
entity level. The risk adjustment is calculated at the level of a set of contracts. There is no diversification effect at this level
\n
either.
\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. For contracts providing multiple services, i.e. insurance coverage, investment return
\n
services and investment management services, KBC works with so-called \u2018multivariate coverage units\u2019, taking the following
\n
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. The CSM is determined as the net of the fair value of the underlying
\n
items and the total entity obligation to the policyholder. The change in the variable fee that impacts the CSM is determined
\n
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
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). In the case of onerous contracts, an additional liability to cover expected future losses is added
\n
to the LRC on the balance 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\n
At the end of each reporting
\n
period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts
\n
are earned (i.e. recorded as insurance revenues).
\n\n\n\n\n\n\n\n
Both components of the LRC are allocated to P&L on the basis of passage
\n
of time or the expected timing of incurred claims and benefits, if that pattern better reflects 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 \u2013 either absorbed by the CSM (i.e. related to future service) or recorded in the insurance result
\n
(i.e. related to current or past service) \u2013 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1015": { "value": "\n
At the end of each reporting
\n
period, acquisition cashflows are amortised (i.e. recorded as an insurance service expense) and some of the premium receipts
\n
are earned (i.e. recorded as insurance revenues).
\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1019": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1020": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1021": { "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
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1022": { "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\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1024": { "value": "\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
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1025": { "value": "\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
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
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1026": { "value": "\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
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
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
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 \u2018Net other income\u2019.
\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1028": { "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, for
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1029": { "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, for
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1031": { "value": "\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1033": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1034": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1035": { "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
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 \u2018Net other income\u2019.
\n\n\n\n\n\n\n\n
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1036": { "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
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 \u2018Net other income\u2019.
\n\n\n\n\n\n\n\n
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
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
(in millions of EUR) 31-12-202431-12-2023
Property and equipment 3 396 3 216
Investment property 585 485
Rental income 55 53
Direct operating expenses from investments generating rental income 16 15
Direct operating expenses from investments not generating rental income 1 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 IT Other Total property
MOVEMENTS TABLE buildings equipment equipment and equipment Investment property
2024
Opening balance 1 306 122 1 789 3 216 485
Acquisitions 109 83 803 995 149
Disposals -44 -2 -271 -317 -13
Depreciation -102-62 -30 -194 -33
Other movements 3 -6 -300 -304 -2
Closing balance 1 271 135 1 990 3 396 585
Accumulated depreciation and impairment1 609 484 882 2 975 324
Fair value 839
2023
Opening balance 1 373 130 1 486 2 989 571
Acquisitions 106 53 830 988 34
Disposals -240-242-266-82
Depreciation-119-62-25-206-31
Other movements -30 1 -260 -289 -7
Closing balance 1 306 122 1 789 3 216 485
Accumulated depreciation and impairment 1 585 479 915 2 979 308
Fair value 733
\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
\u2022 There was a small amount (around 0.2 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
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\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 2024 and 2023 on property and equipment and
\n
regarding climate-related and other ESG risks, see the \u2018Sustainability statement\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
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
can also be found in our Climate Report and our Sustainability Report at www.kbc.com.
\n
income statement.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation. More details
\n
\u2022 \u2018Other equipment\u2019 mostly comprises full service vehicle leases (mainly cars and bicycles) under operating leases. The other
\n
movements in \u2018Other equipment\u2019 mainly concern depreciation of these assets, recognised under \u2018Net other income\u2019 in 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\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1037": { "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
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 \u2018Net other income\u2019.
\n\n\n\n\n\n\n\n
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
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 \u2018Net other income\u2019 in the income statement.
\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
\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1040": { "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 \u2018Net other income\u2019 in the income statement.
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1042": { "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 the way in which 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 the possibility to reliably measure 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
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

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

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

\n\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1043": { "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 the way in which 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 the possibility to reliably measure 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1044": { "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 the way in which 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 the possibility to reliably measure 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
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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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
Discount rates throughout the specific period
Goodwill outstandingof cashflow projections
(in millions of EUR) 31-12-2024 31-12-202331-12-202431-12-2023
K&H Bank 16918114.7% \u2013 13.5% 15.2% \u2013 13.7%
\u010cSOB (Czech Republic) 24825212.7% \u2013 12.6% 13.0% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna656612.7% \u2013 12.6%13.0% \u2013 12.8%
United Bulgarian Bank 54654612.4% \u2013 12.3% 13.3% \u2013 12.5%
DZI Insurance 757510.1%11.2% \u2013 10.4%
KBC Commercial Finance 212111.6% \u2013 12.2% 12.0%
Pension Insurance Company UBB 56567.3% \u2013 7.8% 8.3% \u2013 8.4%
Rest 4242\u2013\u2013
Total 1 221 1 240 \u2013\u2013
\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 2024 (between
\n
3.2% and 4.7% in 2023).
\n
\u2022 For all entities, at year-end 2024 the recoverable amount exceeded the carrying value to such a large extent that no
\n
reasonably possible change in the key assumptions would result in the recoverable amount being less than or equal to the
\n
carrying 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", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1045": { "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 the way in which 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 the possibility to reliably measure 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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\n\n\n\n
\n

\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1046": { "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 the way in which 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 the possibility to reliably measure 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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1049": { "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 a
\n
n
\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
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1055": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1057": { "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", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1058": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1059": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1062": { "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

\n\n\n\n\n\n\n\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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1066": { "value": "\n

\n\n
Effects of changes in foreign exchange rates
\n
\n

\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.
\n\n\n\n\n\n\n\n
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
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
Exchange rate at 31-12-2024 Exchange rate average in 2024
Change relative to Change relative to
31-12-2023 average in 2023
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 25.185 -2% 25.137 -5%
HUF 411.35 -7% 395.88 -4%
\n\n\n\n
\n
\n
* Rounded figures.
\n
\n

\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1068": { "value": "\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.
\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1069": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1070": { "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
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;
\n
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1071": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1074": { "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;
\n
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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1075": { "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", "dimensions": { "concept": "kbc:DescriptionOfAccountingPolicyForEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag47": { "value": "\n

\n
2.0 Notes on segment reporting
\n
\n
\n\n

\n\n
\n

\n
Note 2.1: Segment reporting based on the management structure
\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/activities to be divested).
\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
\n
being 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
\n
for those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of
\n
loans (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
\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 acquisitions and disposals, see Note 6.6. As a result of the finalisation of the sale of the Irish deposit
\n
and loan portfolios in February 2023, the results for Ireland have become immaterial and are no longer presented as a
\n
separate column (as part of the Group Centre) as of 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
Note 2.2: Results by segment
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 International
Belgium Republic Markets
2024 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Total
Net interest income 3 305 1 298 1 290 571 276 443-319 5 574
Insurance revenues before reinsurance 1 805 585 541 203 108 229 14 2 945
Non-life 1 501 485 481 184 87 210 14 2 482
Life 303 100 60 20 21 19 0 463
Dividend income 50 1 1 0 0 1 4 57
Net result from financial instruments at fair value through profit or loss and Insurance finance income and -343 72 55 52 5-2 48 -168
expense (for insurance contracts issued)
Net fee and commission income 1 684 352 546 302 88 156-4 2 578
Net other income 201 3 -6 -24 9 9-17 181
TOTAL INCOME 6 702 2 312 2 427 1 104 485 837-273 11 167
Operating expenses (excluding directly attributable to insurance contracts)a-2 496 -854 -1 041 -493-267-280-175 -4 565
Total operating expenses excluding bank and insurance tax-2 514 -924 -857 -302-261-294-178 -4 474
Bank and insurance tax-285 -40 -300 -245-34-21 1 -623
Less: operating expenses attributed to insurance service expenses 303 110 117 54 28 35 2 532
Insurance service expenses before reinsurance -1 449 -531 -493 -206-113-175-2 -2 475
Of which insurance commissions paid -242 -73 -68 -13-13-41-1 -383
Non-life-1 247 -477 -454 -192-99-163-2 -2 179
Of which Non-life claim-related expenses-837 -318 -260 -97-67-95 1 -1 414
Life-203 -54 -39 -13-14-12 0 -296
Net result from reinsurance contracts held -63 61 1 8 3-10-17 -17
Impairment -260 31 -7 -6 17-18-12 -248
on financial assets at amortised cost and at fair value through OCI -246 34 25 23 18-16-12 -199
Share in results of associated companies and joint ventures 80 0 0 0 0 0 0 80
RESULT BEFORE TAX 2 513 1 019 888 407 125 355-479 3 941
Income tax expense -667 -161 -137 -62-24-51 439 -527
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 846 858 751 345 101 304-40 3 414
attributable to minority interests -1 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 846 858 751 345 101 304-403 415
a Of which non-cash expenses -54 -118 -119 -62-25-31-89 -380
Depreciation and amortisation of fixed assets -53 -120 -119 -62-25-32-90 -382
Other -1 2 0 0 0 0 0 1
Acquisitions of non-current assets* 829 320 225 125 54 45 157 1 530
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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
Belgium Republic Markets Of which
2023 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandTotal
Net interest income 3 248 1 271 1 179 529254396-225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 1899618914 0 2 679
Non-life 1 387 459 420 1697917214 0 2 280
Life 25096532017160 0 399
Dividend income 53010014 0 59
Net result from financial instruments at fair value through profit or loss and Insurance finance -1986455521388 -4 9
income and expense (for insurance contracts issued)
Net fee and commission income 1 537 324 493 26084149-6 -1 2 349
Net other income 235515-3116400 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 expenses29211110449253020 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 -12-10-33-1 0 -340
Non-life-1 116-368-384-173-80-131-10 -1 870
Of which Non-life claim-related expenses-734-213-211-85-51-7520 -1 157
Life-169-52-30-12-10-800 -251
Net result from reinsurance contracts held -63 -16 -15 -31-134 0 -90
Impairment -114-57-36-386-4-7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 70 19 11808 9 16
Share in results of associated companies and joint ventures -3 -1 0 0000 0 -4
RESULT BEFORE TAX 2 515 860 789 33613431815 354 4 179
Income tax expense -650-97-112-51-30-3282 -24 -778
Net post-tax result from discontinued operations 0 0 0 0000 0 0
RESULT AFTER TAX 1 865 763 676 28510528697 330 3 401
attributable to minority interests -1000000 0 -1
attributable to equity holders of the parent 1 866 763 676 28510528697 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 -4-200000 0 -5
Acquisitions of non-current assets* 8671632161185742146 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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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 Group
(in millions of EUR) Unit Unit Business Unit HungarySlovakiaBulgariaCentre Total
BALANCE SHEET AT 31-12-2024
Deposits from customers and debt securities 164 483 52 709 32 832 9 6079 36013 86521 063 271 087
(excluding repos)
Demand deposits (incl. special deposits and other 61 493 24 234 24 363 6 570 5 670 12 123 0 110 090
deposits)
Time deposits 27 584 8 821 6 562 2 320 2 499 1 742 0 42 966
Savings accounts 55 297 17 636 1 507 684 823 0 0 74 440
Debt securities (incl. savings certificates) 20 108 2 018 400 33 367 0 21 063 43 590
Loans and advances to customers (excluding reverse 123 887 38 338 29 842 6 85711 88711 098 0 192 067
repos)
Term loans 65 606 13 433 11 716 3 103 3 499 5 113 0 90 755
Mortgage loans 46 297 20 028 11 735 1 937 6 729 3 068 0 78 059
Other 11 984 4 877 6 391 1 817 1 659 2 916 0 23 253
Liabilities under investment contracts 15 671 0 0 0 0 0 0 15 671
Insurance contract liabilities 14 562 1 248 1 281 428 249 605 19 17 111
Non-life 2 371 413 382 119 75 188 19 3 186
Life 12 191 835 899 308 174 417 0 13 925
BALANCE SHEET AT 31-12-2023
Deposits from customers and debt securities 154 238 52 642 31 687 9 610 8 836 13 241 20 924 259 491
(excluding repos)
Demand deposits (incl. special deposits and other 60 531 23 378 23 659 6 645 5 480 11 534 0 107 568
deposits)
Time deposits 19 654 12 058 6 333 2 252 2 382 1 699 0 38 044
Savings accounts 54 074 15 220 1 516 636 872 8 0 70 810
Debt securities (incl. savings certificates) 19 979 1 986 179 76 103 0 20 924 43 068
Loans and advances to customers (excluding reverse 119 168 36 470 27 975 6 764 11 589 9 623 0 183 613
repos)
Term loans 62 573 11 463 11 658 3 279 3 452 4 927 0 85 694
Mortgage loans 45 394 19 641 10 447 1 818 6 451 2 178 0 75 482
Other 11 200 5 366 5 870 1 667 1 686 2 517 0 22 437
Liabilities under investment contracts13 461 0 0 0 0 0 0 13 461
Insurance contract liabilities14 315 1 288 1 162 413 226 524 18 16 784
Non-life 2 204 357 343 114 58 171 18 2 922
Life 12 111 931 820 299 168 353 0 13 862
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\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag50": { "value": "\n
\n

\n
Note 2.1: Segment reporting based on the management structure
\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);
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\u2022 the Czech Republic Business Unit (all activities in the Czech Republic);
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\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/activities to be divested).
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Segment reporting
\n
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\u2022 The policy bodies analyse the performance of the segments based on a number of criteria, with the \u2018Result after tax\u2019
\n
being the most important results indicator. The segment data is based entirely on IFRS data (with no adjustments).
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\u2022 In principle, we assign a group company in its entirety to one specific segment/business unit. Exceptions are only made
\n
for those items that cannot clearly be allocated to a specific segment, such as charges attached to the subordination of
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loans (such items are recognised under Group Centre).
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\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
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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 acquisitions and disposals, see Note 6.6. As a result of the finalisation of the sale of the Irish deposit
\n
and loan portfolios in February 2023, the results for Ireland have become immaterial and are no longer presented as a
\n
separate column (as part of the Group Centre) as of 2024.
\n

\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag52": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag61": { "value": "\n

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Note 2.2: Results by segment
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Czech International
Belgium Republic Markets
2024 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Total
Net interest income 3 305 1 298 1 290 571 276 443-319 5 574
Insurance revenues before reinsurance 1 805 585 541 203 108 229 14 2 945
Non-life 1 501 485 481 184 87 210 14 2 482
Life 303 100 60 20 21 19 0 463
Dividend income 50 1 1 0 0 1 4 57
Net result from financial instruments at fair value through profit or loss and Insurance finance income and -343 72 55 52 5-2 48 -168
expense (for insurance contracts issued)
Net fee and commission income 1 684 352 546 302 88 156-4 2 578
Net other income 201 3 -6 -24 9 9-17 181
TOTAL INCOME 6 702 2 312 2 427 1 104 485 837-273 11 167
Operating expenses (excluding directly attributable to insurance contracts)a-2 496 -854 -1 041 -493-267-280-175 -4 565
Total operating expenses excluding bank and insurance tax-2 514 -924 -857 -302-261-294-178 -4 474
Bank and insurance tax-285 -40 -300 -245-34-21 1 -623
Less: operating expenses attributed to insurance service expenses 303 110 117 54 28 35 2 532
Insurance service expenses before reinsurance -1 449 -531 -493 -206-113-175-2 -2 475
Of which insurance commissions paid -242 -73 -68 -13-13-41-1 -383
Non-life-1 247 -477 -454 -192-99-163-2 -2 179
Of which Non-life claim-related expenses-837 -318 -260 -97-67-95 1 -1 414
Life-203 -54 -39 -13-14-12 0 -296
Net result from reinsurance contracts held -63 61 1 8 3-10-17 -17
Impairment -260 31 -7 -6 17-18-12 -248
on financial assets at amortised cost and at fair value through OCI -246 34 25 23 18-16-12 -199
Share in results of associated companies and joint ventures 80 0 0 0 0 0 0 80
RESULT BEFORE TAX 2 513 1 019 888 407 125 355-479 3 941
Income tax expense -667 -161 -137 -62-24-51 439 -527
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 846 858 751 345 101 304-40 3 414
attributable to minority interests -1 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 846 858 751 345 101 304-403 415
a Of which non-cash expenses -54 -118 -119 -62-25-31-89 -380
Depreciation and amortisation of fixed assets -53 -120 -119 -62-25-32-90 -382
Other -1 2 0 0 0 0 0 1
Acquisitions of non-current assets* 829 320 225 125 54 45 157 1 530
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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
Belgium Republic Markets Of which
2023 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandTotal
Net interest income 3 248 1 271 1 179 529254396-225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 1899618914 0 2 679
Non-life 1 387 459 420 1697917214 0 2 280
Life 25096532017160 0 399
Dividend income 53010014 0 59
Net result from financial instruments at fair value through profit or loss and Insurance finance -1986455521388 -4 9
income and expense (for insurance contracts issued)
Net fee and commission income 1 537 324 493 26084149-6 -1 2 349
Net other income 235515-3116400 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 expenses29211110449253020 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 -12-10-33-1 0 -340
Non-life-1 116-368-384-173-80-131-10 -1 870
Of which Non-life claim-related expenses-734-213-211-85-51-7520 -1 157
Life-169-52-30-12-10-800 -251
Net result from reinsurance contracts held -63 -16 -15 -31-134 0 -90
Impairment -114-57-36-386-4-7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 70 19 11808 9 16
Share in results of associated companies and joint ventures -3 -1 0 0000 0 -4
RESULT BEFORE TAX 2 515 860 789 33613431815 354 4 179
Income tax expense -650-97-112-51-30-3282 -24 -778
Net post-tax result from discontinued operations 0 0 0 0000 0 0
RESULT AFTER TAX 1 865 763 676 28510528697 330 3 401
attributable to minority interests -1000000 0 -1
attributable to equity holders of the parent 1 866 763 676 28510528697 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 -4-200000 0 -5
Acquisitions of non-current assets* 8671632161185742146 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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Note 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
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income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
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financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
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under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
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past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
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maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
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around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
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billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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billion euros.
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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
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rate calculations).
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20242023
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR) diaries companies venturesOtherTotaldiaries companies venturesOtherTotal
Assets 125 202 9 0 337 161 100 25 0 287
Loans and advances 8 72 0 0 80 15 81 0 0 96
Equity instruments (including investments
in associated companies and joint 117 130 9 0 256 146 19 25 0 191
ventures)
Other 0 0 0 0 0 0 0 0 0 0
Liabilities 66 92 1 716 875 45 80 0 677 803
Deposits 63 40 1 713 817 41 23 0 674 738
Other financial liabilities 0 0 0 0 0 0 0 0 0 0
Other 3 52 0 3 58 4 58 0 3 65
Income statement -38 2 0 -21 -56 7 -3 0 1 6
Net interest income -1 2 0 -22 -21 0 1 0 0 1
Interest income 0 3 0 0 4 0 2 0 0 2
Interest expense -1 -2 0 -22 -25 -1 -1 0 0 -2
Insurance revenues before reinsurance 0 0 0 0 0 0 0 0 0 0
Insurance service expenses before 0 0 0 0 0 0 0 0 0 0
reinsurance
Dividend income 4 3 0 4 11 10 0 0 4 14
Net fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission expense 0 0 0 0 0 0 0 0 0 0
Net other income 1 0 0 0 1 0 -1 0 0 -1
Total operating expenses excluding bank -42 -3 0 -5 -50 -3 -2 0 -5 -10
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 50 51 0 1 0 150 151
Received by the group 0 0 0 0 0 0 0 0 0 0
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\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag62": { "value": "\n
Note 2.2: Results by segment
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Czech International
Belgium Republic Markets
2024 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre Total
Net interest income 3 305 1 298 1 290 571 276 443-319 5 574
Insurance revenues before reinsurance 1 805 585 541 203 108 229 14 2 945
Non-life 1 501 485 481 184 87 210 14 2 482
Life 303 100 60 20 21 19 0 463
Dividend income 50 1 1 0 0 1 4 57
Net result from financial instruments at fair value through profit or loss and Insurance finance income and -343 72 55 52 5-2 48 -168
expense (for insurance contracts issued)
Net fee and commission income 1 684 352 546 302 88 156-4 2 578
Net other income 201 3 -6 -24 9 9-17 181
TOTAL INCOME 6 702 2 312 2 427 1 104 485 837-273 11 167
Operating expenses (excluding directly attributable to insurance contracts)a-2 496 -854 -1 041 -493-267-280-175 -4 565
Total operating expenses excluding bank and insurance tax-2 514 -924 -857 -302-261-294-178 -4 474
Bank and insurance tax-285 -40 -300 -245-34-21 1 -623
Less: operating expenses attributed to insurance service expenses 303 110 117 54 28 35 2 532
Insurance service expenses before reinsurance -1 449 -531 -493 -206-113-175-2 -2 475
Of which insurance commissions paid -242 -73 -68 -13-13-41-1 -383
Non-life-1 247 -477 -454 -192-99-163-2 -2 179
Of which Non-life claim-related expenses-837 -318 -260 -97-67-95 1 -1 414
Life-203 -54 -39 -13-14-12 0 -296
Net result from reinsurance contracts held -63 61 1 8 3-10-17 -17
Impairment -260 31 -7 -6 17-18-12 -248
on financial assets at amortised cost and at fair value through OCI -246 34 25 23 18-16-12 -199
Share in results of associated companies and joint ventures 80 0 0 0 0 0 0 80
RESULT BEFORE TAX 2 513 1 019 888 407 125 355-479 3 941
Income tax expense -667 -161 -137 -62-24-51 439 -527
Net post-tax result from discontinued operations 0 0 0 0 0 0 0 0
RESULT AFTER TAX 1 846 858 751 345 101 304-40 3 414
attributable to minority interests -1 0 0 0 0 0 0 -1
attributable to equity holders of the parent 1 846 858 751 345 101 304-403 415
a Of which non-cash expenses -54 -118 -119 -62-25-31-89 -380
Depreciation and amortisation of fixed assets -53 -120 -119 -62-25-32-90 -382
Other -1 2 0 0 0 0 0 1
Acquisitions of non-current assets* 829 320 225 125 54 45 157 1 530
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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
Czech International
Belgium Republic Markets Of which
2023 (in millions of EUR) Business Unit Business Unit Business Unit HungarySlovakiaBulgariaGroup Centre IrelandTotal
Net interest income 3 248 1 271 1 179 529254396-225 64 5 473
Insurance revenues before reinsurance 1 637 555 473 1899618914 0 2 679
Non-life 1 387 459 420 1697917214 0 2 280
Life 25096532017160 0 399
Dividend income 53010014 0 59
Net result from financial instruments at fair value through profit or loss and Insurance finance -1986455521388 -4 9
income and expense (for insurance contracts issued)
Net fee and commission income 1 537 324 493 26084149-6 -1 2 349
Net other income 235515-3116400 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 expenses29211110449253020 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 -12-10-33-1 0 -340
Non-life-1 116-368-384-173-80-131-10 -1 870
Of which Non-life claim-related expenses-734-213-211-85-51-7520 -1 157
Life-169-52-30-12-10-800 -251
Net result from reinsurance contracts held -63 -16 -15 -31-134 0 -90
Impairment -114-57-36-386-4-7 -2 -215
on financial assets at amortised cost and at fair value through OCI -82 70 19 11808 9 16
Share in results of associated companies and joint ventures -3 -1 0 0000 0 -4
RESULT BEFORE TAX 2 515 860 789 33613431815 354 4 179
Income tax expense -650-97-112-51-30-3282 -24 -778
Net post-tax result from discontinued operations 0 0 0 0000 0 0
RESULT AFTER TAX 1 865 763 676 28510528697 330 3 401
attributable to minority interests -1000000 0 -1
attributable to equity holders of the parent 1 866 763 676 28510528697 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 -4-200000 0 -5
Acquisitions of non-current assets* 8671632161185742146 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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Note 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
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income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
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financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
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under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
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past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
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around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
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billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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billion euros.
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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
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rate calculations).
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20242023
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR) diaries companies venturesOtherTotaldiaries companies venturesOtherTotal
Assets 125 202 9 0 337 161 100 25 0 287
Loans and advances 8 72 0 0 80 15 81 0 0 96
Equity instruments (including investments
in associated companies and joint 117 130 9 0 256 146 19 25 0 191
ventures)
Other 0 0 0 0 0 0 0 0 0 0
Liabilities 66 92 1 716 875 45 80 0 677 803
Deposits 63 40 1 713 817 41 23 0 674 738
Other financial liabilities 0 0 0 0 0 0 0 0 0 0
Other 3 52 0 3 58 4 58 0 3 65
Income statement -38 2 0 -21 -56 7 -3 0 1 6
Net interest income -1 2 0 -22 -21 0 1 0 0 1
Interest income 0 3 0 0 4 0 2 0 0 2
Interest expense -1 -2 0 -22 -25 -1 -1 0 0 -2
Insurance revenues before reinsurance 0 0 0 0 0 0 0 0 0 0
Insurance service expenses before 0 0 0 0 0 0 0 0 0 0
reinsurance
Dividend income 4 3 0 4 11 10 0 0 4 14
Net fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission expense 0 0 0 0 0 0 0 0 0 0
Net other income 1 0 0 0 1 0 -1 0 0 -1
Total operating expenses excluding bank -42 -3 0 -5 -50 -3 -2 0 -5 -10
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 50 51 0 1 0 150 151
Received by the group 0 0 0 0 0 0 0 0 0 0
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\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag67": { "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 Group
(in millions of EUR) Unit Unit Business Unit HungarySlovakiaBulgariaCentre Total
BALANCE SHEET AT 31-12-2024
Deposits from customers and debt securities 164 483 52 709 32 832 9 6079 36013 86521 063 271 087
(excluding repos)
Demand deposits (incl. special deposits and other 61 493 24 234 24 363 6 570 5 670 12 123 0 110 090
deposits)
Time deposits 27 584 8 821 6 562 2 320 2 499 1 742 0 42 966
Savings accounts 55 297 17 636 1 507 684 823 0 0 74 440
Debt securities (incl. savings certificates) 20 108 2 018 400 33 367 0 21 063 43 590
Loans and advances to customers (excluding reverse 123 887 38 338 29 842 6 85711 88711 098 0 192 067
repos)
Term loans 65 606 13 433 11 716 3 103 3 499 5 113 0 90 755
Mortgage loans 46 297 20 028 11 735 1 937 6 729 3 068 0 78 059
Other 11 984 4 877 6 391 1 817 1 659 2 916 0 23 253
Liabilities under investment contracts 15 671 0 0 0 0 0 0 15 671
Insurance contract liabilities 14 562 1 248 1 281 428 249 605 19 17 111
Non-life 2 371 413 382 119 75 188 19 3 186
Life 12 191 835 899 308 174 417 0 13 925
BALANCE SHEET AT 31-12-2023
Deposits from customers and debt securities 154 238 52 642 31 687 9 610 8 836 13 241 20 924 259 491
(excluding repos)
Demand deposits (incl. special deposits and other 60 531 23 378 23 659 6 645 5 480 11 534 0 107 568
deposits)
Time deposits 19 654 12 058 6 333 2 252 2 382 1 699 0 38 044
Savings accounts 54 074 15 220 1 516 636 872 8 0 70 810
Debt securities (incl. savings certificates) 19 979 1 986 179 76 103 0 20 924 43 068
Loans and advances to customers (excluding reverse 119 168 36 470 27 975 6 764 11 589 9 623 0 183 613
repos)
Term loans 62 573 11 463 11 658 3 279 3 452 4 927 0 85 694
Mortgage loans 45 394 19 641 10 447 1 818 6 451 2 178 0 75 482
Other 11 200 5 366 5 870 1 667 1 686 2 517 0 22 437
Liabilities under investment contracts13 461 0 0 0 0 0 0 13 461
Insurance contract liabilities14 315 1 288 1 162 413 226 524 18 16 784
Non-life 2 204 357 343 114 58 171 18 2 922
Life 12 111 931 820 299 168 353 0 13 862
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
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Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
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etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
\n
losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
\n
collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
\n
large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
\n
which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
\n
are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
\n
SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
\n
purposes and are therefore irrelevant from a capital perspective.
\n
\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
\n
risks?\u2019 section.
\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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
\n
(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
\n
end 2024 (2 808 million euros at year-end 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", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag904": { "value": "\n

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Note 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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billion euros.
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Note 3.2: Dividend income
\n
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(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
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Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
\n
and expense (for insurance contracts issued)
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(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
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\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
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expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
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way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
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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
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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
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loss. 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
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released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
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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
\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
\n
a 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
\n
a 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

\n\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:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag905": { "value": "\n

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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
(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
\n
\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
billion euros.
\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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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
(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
\n\n\n\n\n\n\n
\n
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\n\n\n\n\n\n\n\n\n

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\n\n

\n\n

\n
Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
\n
and expense (for insurance contracts issued)
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n
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\n\n
\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
\n
way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
\n
\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
\n
loss. 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
\n
released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
\n
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
\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
\n
a 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
\n
a 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", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag906": { "value": "\n

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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
(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
\n
\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
billion euros.
\n

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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
(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
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Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
\n
and expense (for insurance contracts issued)
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(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
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\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
\n
way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
\n
\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).
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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
\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
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loss. 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
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released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
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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
\n
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 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
\n
a 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
\n
a 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 3.4: Net fee and commission income
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(in millions of EUR) 20242023
Total 2 578 2 349
Fee and commission income 3 253 2 991
Fee and commission expense -675-642
Breakdown by type
Asset management services 1 421 1 247
Fee and commission income 1 478 1 305
Fee and commission expense -57-59
Banking services 1 1081 057
Fee and commission income 1 721 1 632
Fee and commission expense -613-575
Other 49 45
Fee and commission income 54 53
Fee and commission expense -5-8
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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.
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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
\n
rate calculations).
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Note 3.5: Net other income
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(in millions of EUR) 20242023
Total 181656
of which gains or losses on
Sale of financial assets measured at amortised cost -36-22
Sale of FVOCI debt instruments 2-7
Repurchase of financial liabilities measured at amortised cost 00
Other, including: 215685
Income from operational leasing activities 120101
Income from VAB Group 4739
Legal disputes -28-2
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios 0405
Gain on sale of a participation in Belgium 018
Recovery of Belgian bank and insurance tax from 2016 (incl. moratorium interest) 048
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\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios in 2023, see Note 6.6.
\n
\u2022
\n
Legal disputes: in 2024, this item mainly concerned Hungary.
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Note 3.6.1: Insurance profitability \u2013 P&L
\n
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\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.
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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
\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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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
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\u2022 The column \u2018of which Life direct participation (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
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backing these liabilities;
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- changes in the fair value of underlying liabilities of insurance contracts measured under the VFA, which represents the
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change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
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in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
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P&L\u2019 (see also Note 3.3).
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\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
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in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
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(i.e. mainly interest income from bonds) and income tax.
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\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
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euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
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level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
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an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
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respectively, in 2023).
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Note 3.6.3: Insurance revenues (Life and Non-life) by component
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(in millions of EUR) 20242023
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 472 432 39 406 370 36
Amounts related to changes in liabilities for remaining coverage 447 408 38 390 355 35
Expected claims and other insurance service expenses 262 232 29 226 200 25
Change in risk adjustment for risk expired (non-financial risk) 14 13 2 15 11 3
CSM recognised for services provided 170 163 7 150 143 6
Recovery of insurance acquisition cashflows 25 24 1 16 15 1
Insurance revenues for contracts measured using the PAA 2 483 31 2 452 2 284 30 2 255
Total insurance revenues 2 955 463 2 492 2 690 400 2 290
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Note 3.6.4: Life insurance sales
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(in millions of EUR) 20242023
Total 2 906 2 328
IFRS 17 \u2013 non-unit-linked 1 214 975
IFRS 17 \u2013 unit-linked 158 171
IFRS 17 \u2013 hybrid 197 131
Non-IFRS 17 1 337 1 051
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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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\u2022 Sales of life insurance products in 2024 went up by 25% compared to 2023, largely driven by unit-linked insurance contracts
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in Belgium (non-IFRS 17) as well as by further growth in non-unit-linked insurance contracts (mainly in Belgium).
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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) revenues expenses in P&L reinsuranceheld reinsurance
2024
Personal insurance 308 -243 -8 57 \u2014 \u2014
Motor Third-Party Liability (MTPL) 594 -578 -19 -3 \u2014 \u2014
Liabilities other than MTPL 154 -139 -6 9 \u2014 \u2014
Casco 467 -430 -2 35 \u2014 \u2014
Property incl. other than casco 952 -789 -11 152 \u2014 \u2014
Total primary business 2 474 -2 179 -46 249 -7 242
Accepted reinsurance 18 -3 1 16 -6 10
Total 2 492 -2 181 -45 265 -13 252
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 business 2 272 -1 870 -31 371 -33 338
Accepted reinsurance 18 -2 0 17 -54 -38
Total 2 290 -1 872 -30 388 -87 301
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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", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag907": { "value": "\n

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Note 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
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income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
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under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
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past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
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maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
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around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
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billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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billion euros.
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Note 3.2: Dividend income
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(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
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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-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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
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agricultural sector, and cement and steel producers. See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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Note 4.2.1: Impaired financial assets
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Carrying value before Carrying value after
(in millions of EUR) impairmentImpairmentimpairment
31-12-2024
Financial assets at amortised cost: Loans and advances* 217 093 -2 448 214 645
Stage 1 (12-month ECL) 197 031 -176 196 855
Stage 2 (lifetime ECL) 16 177 -331 15 847
Stage 3 (lifetime ECL) 3 472 -1 803 1 669
Purchased or originated credit impaired assets (POCI) 414 -138 276
Financial assets at amortised cost: Debt securities 50 084 -8 50 075
Stage 1 (12-month ECL) 49 979 -6 49 973
Stage 2 (lifetime ECL) 100 -1 99
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 securities 22 543 -4 22 539
Stage 1 (12-month ECL) 22 543 -4 22 539
Stage 2 (lifetime ECL) 0 0 0
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2023
Financial assets at amortised cost: Loans and advances* 213 531 -2 474 211 057
Stage 1 (12-month ECL) 175 853 -146 175 708
Stage 2 (lifetime ECL) 33 571 -490 33 081
Stage 3 (lifetime ECL) 3 694 -1 750 1 944
Purchased or originated credit impaired assets (POCI) 412 -88 324
Financial assets at amortised cost: Debt securities 51 384 -12 51 372
Stage 1 (12-month ECL) 51 300 -6 51 294
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 securities 16 897 -5 16 892
Stage 1 (12-month ECL) 16 864 -4 16 861
Stage 2 (lifetime ECL) 33 -1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
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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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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily
\n
to:
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- an organic net increase in the loan portfolio (mainly mortgage loans and term loans);
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- a decrease in the carrying value 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 17.4 billion euros in 2024,
\n
due primarily to:
\n
- the release 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 conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic
\n
risks (12.0 billion euros at year-end 2023).
\n
- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying
\n
value of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to
\n
the introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a
\n
lesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk
\n
was updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The
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aim of both adjustments is to better reflect the underlying credit risk after initial recognition.
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- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect
\n
exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks,
\n
which are included in the standard staging assessment since the fourth quarter of 2024.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in
\n
\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly
\n
offset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial
\n
assets at fair value through OCI\u2019 (FVOCI) category.
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\u2022 Impairment: stable in 2024 compared to 2023:
\n
- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2).
\n
\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to
\n
modifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage
\n
1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros
\n
in 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or
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losses are recognised under impairment (see Note 3.9).
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\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure for 2023 was 59 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 1 Stage 2 Stage 3 (purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR) 12-month ECL lifetime ECL lifetime ECL impaired) Total
2024
Impairment on 1 January 146 490 1 750 88 2 474
Movements with an impact on results1 31 -154 334 49 260
Transfer of financial assets
Stage 1 (12-month ECL) -11 76 43 0 108
Stage 2 (lifetime ECL) 19 -112 98 0 4
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 12 -31 -1 -20
New financial assets2 56 14 6 0 76
Changes in risk parameters during the reporting period -23 -81 242 50 188
Changes in the model or methodology 1 -35 -1 0 -35
Derecognised financial assets3-11 -28 -35 -1 -75
Other 0 0 12 1 13
Movements without an impact on results -1 -6 -280 1 -286
Derecognised financial assets3-1 -2 -234 -1 -238
Changes in the scope of consolidation 1 -1 0 0 0
Transfers under IFRS 5 0 0 0 0 0
Other -1 -3 -46 2 -48
Impairment on 31 December 176 331 1 803 138 2 448
2023
Impairment on 1 January 110 635 1 796 77 2 619
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 assets2 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 assets3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets3-2-1-207-1-211
Changes in the scope of consolidation 0 0 0 0 0
Transfers under IFRS 50 0 0 0 0
Other 0019120
Impairment on 31 December 146 490 1 750 88 2 474
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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.
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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 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt
\n
securities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited.
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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 specified in that 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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
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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 2024.
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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 specified in that section.
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\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
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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 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
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collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
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risks?\u2019 section.
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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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
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in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
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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 2024, 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 (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
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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 (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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 at year-end 2024 (the same as at year-end 2023).
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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) 31-12-202431-12-2023
Carrying value Notional amounts* Carrying value Notional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total 4 584 4 679 616 452 615 520 4 618 5 501 598 880 591 923
Interest rate contracts 1 589 1 781 429 232 426 678 1 821 2 252 403 723 395 170
of which interest rate swaps and futures 1 510 1 740 421 656 422 160 1 684 2 169 394 018 389 184
of which options 80 41 7 576 4 518 137 83 9 705 5 986
Foreign exchange contracts 2 193 1 784 172 410 174 374 2 318 2 481 180 438 182 719
of which currency and interest rate swaps, forward 2 101 1 720 167 819 167 306 2 246 2 409 176 708 176 829
foreign exchange transactions and futures
of which options 92 64 4 592 7 067 72 72 3 730 5 890
Equity contracts 799 1 110 14 530 14 191 471 761 14 381 13 698
of which equity swaps 646 692 11 348 10 995 385 393 11 314 11 031
of which options 153 418 3 181 3 196 85 368 3 067 2 667
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 4 3 280 277 8 7 338 336
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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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31-12-2024
(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 strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 37 727 37 727 96 63 281Debt securities held at AC 8 050 -252 17
Currency and 0 0 0 0 0 Loans and advances at AC 569 33 -45
interest rate swaps
Debt securities held at FVOCI 7 254 64 80
Debt securities issued at AC 21 802 -226 -334
Deposits at AC 102 -11 13
Total 37 727 37 727 96 63 281 Total -269 11 -
Portfolio hedge of interest rate risk
Interest rate swaps 141 341 141 341 67 95 -464 Debt securities held at AC 831 -31 -23
Currency and 1 214 0 48 0 -3 Loans and advances at AC 121 621 -1 988 622
interest rate options
Debt securities held at FVOCI 76 0 -3
Debt securities issued at AC 0 0 0
Deposits at AC 17 471 -379 -121
Insurance contract liabilities, Life 161 6 -6
Total 142 555 141 341 115 95 -467Total 469 2 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 17 376 17 376 5 120 22
Currency and 1 830 1 790 19 17 -30
interest rate swaps
Total 19 206 19 166 24 137 -8 Total 8 0 -486
Hedge of net investments in foreign operations
Total3 2 826 2 806 35 518 54 Total -54 0 147
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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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31-12-2023
(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
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 31 864 31 864 97 112 267 Debt securities held at AC 6 547 -300 377
Currency and 0 0 0 0 0 Loans and advances at AC 601 75 3
interest rate swaps
Debt securities held at FVOCI 2 999 -25 124
Debt securities issued at AC 21 285 -560 -774
Deposits at AC 0 0 0
Total 31 86431 864 97 112 267 Total -269 -2 \u2013
Portfolio hedge of interest rate risk
Interest rate swaps 143 932 143 932 93 123 -995 Debt securities held at AC 937 -7 115
Currency and 1 618 0 70 0 -27 Loans and advances at AC 125 541 -2 473 1 841
interest rate options
Debt securities held at FVOCI 85 3 9
Debt securities issued at AC 0 0 0
Deposits at AC 15 938 -507 -936
Total 145 550 143 932 163 123 -1 022 Total 1 029 7 \u2013
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 19 603 19 603 15 127 401
Currency and 1 181 1 205 1 22 -14
interest rate swaps
Total 20 784 20 808 17 149 387 Total -395 -9 -611
Hedge of net investments in foreign operations
Total32 579 2 570 19 460 77 Total -77 0 92
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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 -187 million euros in 2024 (-322 million euros in 2023). The accumulated amount of fair value hedge
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adjustments remaining on the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and
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losses amounted to -99 million euros in 2024 (-82 million euros in 2023). These 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 were less
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negative in 2024 due to the decrease in the risk-free rate and the unwinding effect of the negative accumulated fair value
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adjustment. The \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item on the liabilities
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side of the balance sheet was also less negative for the same reasons.
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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) Inflow Outflow
Not more than three months 21 -38
More than three but not more than six months 46 -54
More than six months but not more than one year 103 -177
More than one but not more than two years 183 -325
More than two but not more than five years 533 -770
More than five years 1 321 -1 572
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Note 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
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income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
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financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
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under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
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past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
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maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
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around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
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billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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Note 3.2: Dividend income
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(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, 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 (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
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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 (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
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financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
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under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
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past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
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around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
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billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
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billion euros.
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Note 3.2: Dividend income
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(in millions of EUR) 20242023
Total 5759
Equity instruments MFVPL other than held for trading 20
Equity instruments held for trading 1514
Equity instruments at FVOCI 3944
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
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Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
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etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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
\n
\n
\u2022 In 2024, 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 (not held for trading): the fair value of loans and advances
\n
increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
\n
307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
\n
offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
\n
changes in market inputs.
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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
\n
following:
\n
- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances
\n
increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
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 the sale of
\n
existing 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 the sale of
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existing 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
\n
and the sale of existing positions.
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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-
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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 3.1: Net interest income
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(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
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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. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
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September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
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certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
billion euros.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
\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 (not held for trading): the fair value of loans and advances
\n
increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
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 the sale of
\n
existing 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 the sale of
\n
existing 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 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

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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", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag912": { "value": "\n

\n\n

\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
(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
\n
\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
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

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\n\n

\n\n

\n
Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
\n
and expense (for insurance contracts issued)
\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
\n\n\n\n\n\n\n
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\n\n\n\n\n\n\n\n\n
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\n\n
\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
\n
way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
\n
\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
\n
loss. 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
\n
released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
\n
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
\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
\n
a 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
\n
a 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", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag914": { "value": "\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
(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
\n
\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
billion euros.
\n

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20242023
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR) diaries companies venturesOtherTotaldiaries companies venturesOtherTotal
Assets 125 202 9 0 337 161 100 25 0 287
Loans and advances 8 72 0 0 80 15 81 0 0 96
Equity instruments (including investments
in associated companies and joint 117 130 9 0 256 146 19 25 0 191
ventures)
Other 0 0 0 0 0 0 0 0 0 0
Liabilities 66 92 1 716 875 45 80 0 677 803
Deposits 63 40 1 713 817 41 23 0 674 738
Other financial liabilities 0 0 0 0 0 0 0 0 0 0
Other 3 52 0 3 58 4 58 0 3 65
Income statement -38 2 0 -21 -56 7 -3 0 1 6
Net interest income -1 2 0 -22 -21 0 1 0 0 1
Interest income 0 3 0 0 4 0 2 0 0 2
Interest expense -1 -2 0 -22 -25 -1 -1 0 0 -2
Insurance revenues before reinsurance 0 0 0 0 0 0 0 0 0 0
Insurance service expenses before 0 0 0 0 0 0 0 0 0 0
reinsurance
Dividend income 4 3 0 4 11 10 0 0 4 14
Net fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission expense 0 0 0 0 0 0 0 0 0 0
Net other income 1 0 0 0 1 0 -1 0 0 -1
Total operating expenses excluding bank -42 -3 0 -5 -50 -3 -2 0 -5 -10
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 50 51 0 1 0 150 151
Received by the group 0 0 0 0 0 0 0 0 0 0
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag915": { "value": "\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
(in millions of EUR) 20242023
Total 5 574 5 473
Interest income 19 746 20 170
Interest income on financial instruments calculated using the effective interest rate method
Financial assets at amortised cost 9 803 10 233
Financial assets at fair value through OCI 507 384
Hedging derivatives 6 011 5 094
Financial liabilities (negative interest rate) 5 11
Other 1 580 2 143
Interest income on other financial instruments
Financial assets MFVPL other than held for trading 70 55
Financial assets held for trading 1 770 2 250
Of which economic hedges 1 566 2 085
Other financial assets at fair value through profit or loss 0 0
Interest expense -14 172 -14 697
Interest expense on financial instruments calculated using the effective interest rate method
Financial liabilities at amortised cost -6 565 -6 757
Hedging derivatives -5 903 -5 277
Financial assets (negative interest rate) -1-1
Other -5-5
Interest expense on other financial instruments
Financial liabilities held for trading -1 641 -2 599
Of which economic hedges -1 596 -2 546
Other financial liabilities at fair value through profit or loss -62-68
Net interest expense relating to defined benefit plans 5 10
\n\n\n\n\n\n\n\n\n
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\u2022 \u2018Interest income on financial instruments calculated using the effective interest rate method, Other\u2019: the decrease in interest
\n
income relates mainly to interest on cash balances with central banks. These cash balances with central banks are mostly
\n
financed using short-term liabilities, such as certificates of deposit and repos. The associated interest expense is recognised
\n
under \u2018Interest expense\u2019, under \u2018Financial liabilities at amortised cost\u2019. The interest margin on this activity is limited. Over the
\n
past few years, several central banks in our core countries decided to increase the minimum amount of reserves to be
\n
maintained or to lower the compensation paid for these reserves. This had a negative impact on our net interest income of
\n
around 190 million euros in 2024 (126 million euros in 2023).
\n
\u2022 At the end of August 2023, the Kingdom of Belgium issued a state note with a term of one year. For KBC, this resulted in a 5.7-
\n
billion-euro outflow of customer deposits in 2023. Thanks to our proactive, multi-phased and multi-product offer, in
\n
September 2024 we managed to attract a total of some 6.5 billion euros in core customer money in Belgium (deposits, savings
\n
certificates, funds, insurance, bonds, etc.), exceeding the 5.7-billion-euro outflow to the state note in September 2023 by 0.8
\n
billion euros.
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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag923": { "value": "\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
\n
and expense (for insurance contracts issued)
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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
(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
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\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
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way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
\n
\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
\n
loss. 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
\n
released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
\n
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
\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
\n
a 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
\n
a 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.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
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Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
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etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
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agricultural sector, and cement and steel producers. See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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
\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
\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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
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in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
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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 2024, 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 (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
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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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- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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 at year-end 2024 (the same as at year-end 2023).
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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) 31-12-202431-12-2023
Carrying value Notional amounts* Carrying value Notional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total 4 584 4 679 616 452 615 520 4 618 5 501 598 880 591 923
Interest rate contracts 1 589 1 781 429 232 426 678 1 821 2 252 403 723 395 170
of which interest rate swaps and futures 1 510 1 740 421 656 422 160 1 684 2 169 394 018 389 184
of which options 80 41 7 576 4 518 137 83 9 705 5 986
Foreign exchange contracts 2 193 1 784 172 410 174 374 2 318 2 481 180 438 182 719
of which currency and interest rate swaps, forward 2 101 1 720 167 819 167 306 2 246 2 409 176 708 176 829
foreign exchange transactions and futures
of which options 92 64 4 592 7 067 72 72 3 730 5 890
Equity contracts 799 1 110 14 530 14 191 471 761 14 381 13 698
of which equity swaps 646 692 11 348 10 995 385 393 11 314 11 031
of which options 153 418 3 181 3 196 85 368 3 067 2 667
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 4 3 280 277 8 7 338 336
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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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31-12-2024
(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 strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 37 727 37 727 96 63 281Debt securities held at AC 8 050 -252 17
Currency and 0 0 0 0 0 Loans and advances at AC 569 33 -45
interest rate swaps
Debt securities held at FVOCI 7 254 64 80
Debt securities issued at AC 21 802 -226 -334
Deposits at AC 102 -11 13
Total 37 727 37 727 96 63 281 Total -269 11 -
Portfolio hedge of interest rate risk
Interest rate swaps 141 341 141 341 67 95 -464 Debt securities held at AC 831 -31 -23
Currency and 1 214 0 48 0 -3 Loans and advances at AC 121 621 -1 988 622
interest rate options
Debt securities held at FVOCI 76 0 -3
Debt securities issued at AC 0 0 0
Deposits at AC 17 471 -379 -121
Insurance contract liabilities, Life 161 6 -6
Total 142 555 141 341 115 95 -467Total 469 2 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 17 376 17 376 5 120 22
Currency and 1 830 1 790 19 17 -30
interest rate swaps
Total 19 206 19 166 24 137 -8 Total 8 0 -486
Hedge of net investments in foreign operations
Total3 2 826 2 806 35 518 54 Total -54 0 147
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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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31-12-2023
(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
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 31 864 31 864 97 112 267 Debt securities held at AC 6 547 -300 377
Currency and 0 0 0 0 0 Loans and advances at AC 601 75 3
interest rate swaps
Debt securities held at FVOCI 2 999 -25 124
Debt securities issued at AC 21 285 -560 -774
Deposits at AC 0 0 0
Total 31 86431 864 97 112 267 Total -269 -2 \u2013
Portfolio hedge of interest rate risk
Interest rate swaps 143 932 143 932 93 123 -995 Debt securities held at AC 937 -7 115
Currency and 1 618 0 70 0 -27 Loans and advances at AC 125 541 -2 473 1 841
interest rate options
Debt securities held at FVOCI 85 3 9
Debt securities issued at AC 0 0 0
Deposits at AC 15 938 -507 -936
Total 145 550 143 932 163 123 -1 022 Total 1 029 7 \u2013
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 19 603 19 603 15 127 401
Currency and 1 181 1 205 1 22 -14
interest rate swaps
Total 20 784 20 808 17 149 387 Total -395 -9 -611
Hedge of net investments in foreign operations
Total32 579 2 570 19 460 77 Total -77 0 92
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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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\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 -187 million euros in 2024 (-322 million euros in 2023). The accumulated amount of fair value hedge
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adjustments remaining on the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and
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losses amounted to -99 million euros in 2024 (-82 million euros in 2023). These 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 were less
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negative in 2024 due to the decrease in the risk-free rate and the unwinding effect of the negative accumulated fair value
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adjustment. The \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item on the liabilities
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side of the balance sheet was also less negative for the same reasons.
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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) Inflow Outflow
Not more than three months 21 -38
More than three but not more than six months 46 -54
More than six months but not more than one year 103 -177
More than one but not more than two years 183 -325
More than two but not more than five years 533 -770
More than five years 1 321 -1 572
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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", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag925": { "value": "\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
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and expense (for insurance contracts issued)
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(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
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\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
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way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
\n
recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
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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
\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).
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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
\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
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loss. 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
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released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
\n
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
\n
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 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%.
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- For cashflow hedges, we compare the designated hedging instrument with a perfect hedge of the hedged cashflows on
\n
a 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
\n
a 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.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
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Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
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collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
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risks?\u2019 section.
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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 on 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
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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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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end 2024 (2 808 million euros at year-end 2023).
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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.
\n
- 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.
\n
\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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
\n
in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
\n
bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
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\u2022 In 2024, 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 (not held for trading): the fair value of loans and advances
\n
increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
\n
purchases.
\n
- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
\n
account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
\n
euros, due mainly to new purchases, partly offset by the sale of existing positions.
\n
- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
\n
market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
\n
market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
\n
307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
\n
offset by new transactions and changes in market inputs.
\n
- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
\n
changes in market inputs.
\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 (not held for trading): the fair value of loans and advances
\n
increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
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 the sale of
\n
existing 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 the sale of
\n
existing 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 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", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag926": { "value": "\n

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Note 3.3: Net result from financial instruments at fair value through profit or loss and Insurance finance income
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and expense (for insurance contracts issued)
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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
(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
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\u2022 Since 2024, \u2018Net result from financial instruments at fair value through profit or loss\u2019 and \u2018Insurance finance income and
\n
expense (for insurance contracts issued)\u2019 are shown on the same line, with retroactive restatement of the 2023 figures. This
\n
way, the change in fair value of liabilities of unit-linked contracts under IFRS 17 (variable fee approach) recognised under
\n
\u2018Insurance finance income and expense\u2019 is offset by the change in fair value of the underlying unit-linked assets, which is
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recognised under \u2018Net result from financial instruments at fair value through profit or loss\u2019. The remaining amount primarily
\n
comprises interest accretion in \u2018Insurance finance income and expense\u2019 (see Note 3.6).
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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).
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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
\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
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loss. 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
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released in profit or loss during the life and until the maturity of the financial instrument. This day 1 profit involves limited
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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
\n
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 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
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a 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
\n
a 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
\n
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-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
\n
collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
\n
risks?\u2019 section.
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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
\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 on 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
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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
\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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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end 2024 (2 808 million euros at year-end 2023).
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
\n
in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
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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 2024, 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 (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
\n
account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
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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 (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
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 the sale of
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existing 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 the sale of
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existing 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 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
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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-
\n
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", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag927": { "value": "\n\n\n\n\n\n\n(in millions of EUR) \n2024\n2023\n\n\n\n\n\n\n\n\nTotal \n-168\n9\n\n\n\n\n\n\n\n\nTotal broken down by type and IFRS portfolio \n\n\n\n\n\n\n\n\n\n\nNet result from financial instruments at fair value through profit or loss \n173\n322\n\n\n\n\n\n\n\n\nFinancial instruments MFVPL other than held for trading \n1 679 \n1 250 \n\n\n\n\n\n\n\n\nTrading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) \n202\n134\n\n\n\n\n\n\n\n\nOther financial instruments at fair value through profit or loss \n-1 598 \n-1 103 \n\n\n\n\n\n\n\n\nForeign exchange trading \n108\n155\n\n\n\n\n\n\n\n\nFair value adjustments in hedge accounting \n-219\n-113\n\n\n\n\n\n\n\n\nInsurance finance income and expense (for insurance contracts issued) \n-341\n-313\n\n\n\n\n\n\n\n\nHedge accounting broken down by type of hedge\n\n\n\n\n\n\n\n\n\n\nFair value micro-hedges \n 11\n-2 \n\n\n\n\n\n\n\n\nChanges in the fair value of the hedged items\n -269 \n-269 \n\n\n\n\n\n\n\n\nChanges in the fair value of the hedging derivatives \n 281 \n267 \n\n\n\n\n\n\n\n\nCashflow hedges \n0\n-9\n\n\n\n\n\n\n\n\nChanges in the fair value of the hedging derivatives, ineffective portion \n0\n-9\n\n\n\n\n\n\n\n\nHedges of net investments in foreign operations, ineffective portion \n 0 \n0 \n\n\n\n\n\n\n\n\nPortfolio hedge of interest rate risk \n2\n7\n\n\n\n\n\n\n\n\nChanges in the fair value of the hedged items\n 469 \n1 029 \n\n\n\n\n\n\n\n\nChanges in the fair value of the hedging derivatives \n-467\n-1 022\n\n\n\n\n\n\n\n\nDiscontinuation of hedge accounting for fair value hedges \n -131 \n-58 \n\n\n\n\n\n\n\n\nDiscontinuation of hedge accounting in the event of cashflow hedges \n-101\n-52\n\n\n\n\n\n\n\n\nTotal broken down by driver \n\n\n\n\n\n\n\n\n\n\nDealing room \n 294 \n288 \n\n\n\n\n\n\n\n\nChange in the value of derivatives used for asset/liability management purposes and other \n-189\n-47\n\n\n\n\n\n\n\n\nMarket value adjustments (xVA) \n-24\n-15\n\n\n\n\n\n\n\n\nInvestment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense \n-249\n-217\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 3.6: Insurance results \n \n\n\n\n\n\n\n\nNote 3.6.1: Insurance profitability \u2013 P&L \n \n\u2022 Unlike the group\u2019s income statement, the figures below include intragroup transactions between bank and insurance entities \nof the group (the results for insurance contracts concluded between the group\u2019s bank and insurance entities, interest that \ninsurance companies receive on their deposits with bank entities, commissions that insurance entities pay to bank branches \nfor 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 \nrelated to intercompany transaction eliminations between bank and insurance entities). As part of our integrated bank-\ninsurance concept, all the other insurance items \u2013 together with the group\u2019s banking activities \u2013 are included in the income \nstatement and related notes. \n \n\n\n\n\n\n\nOf which Life \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ndirect \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nparticipation\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) \nLife \n(VFA) \nNon-life\nNon-technical\nTotal\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance service result \n 168 \n 10\n 310 \n\u2014 \n 478 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance revenues before reinsurance\n 463 \n 24\n 2 492 \n\u2014 \n 2 955 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance service expenses\n-296 \n-14\n-2 181 \n\u2014 \n-2 477 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOf which Non-life claim-related expenses \n\u2014 \n\u2014\n-1 416 \n\u2014 \n-1 416 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result and insurance finance income and expense\n 150 \n 2\n 55 \n 8 \n 213 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result \n 446 \n 92\n 100 \n 8 \n 554 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet interest income \n 325 \n 0\n 91 \n 1 \n 417 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDividend income \n 22 \n 0\n 4 \n 7 \n 34 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet result from financial instruments at fair value through profit or loss \n 92 \n 92\n 0 \n 0 \n 92 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet other income \n 4 \n 0\n 4 \n 1 \n 9 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nImpairment \n 2 \n 0\n 1 \n 0 \n 2 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance finance income and expense, before reinsurance \n-296 \n-91\n-45 \n\u2014 \n-341 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest accretion \n-204 \n\u2014\n-46 \n\u2014 \n-250 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEffect of changes in financial assumptions and foreign exchange \n-2 \n 0\n 1 \n\u2014 \n-1 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ndifferences \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fair value of liabilities of IFRS 17 unit-linked contracts \n-91 \n-91\n\u2014 \n\u2014 \n-91 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result before reinsurance \n 317 \n 12\n 365 \n 8 \n 691 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet result from reinsurance contracts held \n-4 \n\u2014\n-13 \n\u2014 \n-17 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPremiums paid to the reinsurer \n-36\n\u2014\n-121 \n\u2014 \n-157 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFee and commission income \n 9 \n\u2014\n 11 \n\u2014 \n 20 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAmounts recoverable from the reinsurer \n 23 \n\u2014\n 99 \n\u2014 \n 122 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal reinsurance finance income and expense \n 0 \n\u2014\n-1 \n\u2014 \n-2 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result after reinsurance \n 313 \n 12\n 352 \n 8 \n 674 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNon-directly attributable income or expenses \n 23 \n-2\n-56 \n 16 \n-17 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet fee and commission income \n 75 \n 0\n-2 \n 28 \n 102 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet other income \n\u2014 \n\u2014\n\u2014 \n 80 \n 80 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOperating expenses (incl. bank and insurance tax) \n-51 \n-2\n-53 \n-91 \n-196 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nImpairment \u2013 other \n-1 \n 0\n-1 \n 0 \n-3 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nShare in results of associated companies and joint ventures \n\u2014 \n\u2014\n\u2014 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nIncome tax expense \n\u2014 \n\u2014\n\u2014\n-142 \n-142 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nResult after tax \n 336 \n 10\n 296 \n-117 \n 515 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nattributable to minority interests \n\u2014 \n\u2014\n\u2014 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nattributable to equity holders of the parent \n\u2014 \n\u2014\n\u2014 \n\u2014 \n 515 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOf which Life \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ndirect \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nparticipation\n\n\n\n\n\n\n\n\n\n\n\n\n\n(in millions of EUR)\nLife \n(VFA) \nNon-life\nNon-technical\nTotal\n\n\n\n\n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance service result \n 149 \n 12 \n418\n\u2014\n567\n\n\n\n\n\n\n\n\n\n\nInsurance revenues before reinsurance\n 400 \n 25 \n 2 290 \n\u2014 \n 2 690 \n\n\n\n\n\n\n\n\n\n\nInsurance service expenses\n-251 \n-12 \n-1 872 \n\u2014 \n-2 123 \n\n\n\n\n\n\n\n\n\n\nOf which Non-life claim-related expenses \n\u2014 \n\u2014 \n-1 159 \n\u2014 \n-1 159\n\n\n\n\n\n\n\n\n\n\nInvestment result and insurance finance income and expense \n 151 \n 0 \n 63 \n19 \n233 \n\n\n\n\n\n\n\n\n\n\nInvestment result \n 434 \n 96 \n 93 \n 19 \n 546 \n\n\n\n\n\n\n\n\n\n\nNet interest income \n 304 \n 0 \n 87 \n 1 \n 392 \n\n\n\n\n\n\n\n\n\n\nDividend income \n 22 \n 0 \n 4 \n 14 \n 40 \n\n\n\n\n\n\n\n\n\n\nNet result from financial instruments at fair value through profit or loss \n 100 \n 96 \n 0 \n 6 \n 106 \n\n\n\n\n\n\n\n\n\n\nNet other income \n 10 \n 0 \n 2 \n-3 \n 10 \n\n\n\n\n\n\n\n\n\n\nImpairment \n-1 \n 0 \n 0 \n 0 \n-2 \n\n\n\n\n\n\n\n\n\n\nInsurance finance income and expense, before reinsurance \n-283 \n-96 \n-30\n\u2014\n-313\n\n\n\n\n\n\n\n\n\n\nInterest accretion \n-186 \n\u2014 \n-31\n\u2014\n-217\n\n\n\n\n\n\n\n\n\n\nEffect of changes in financial assumptions and foreign exchange \n-1 \n 0 \n 1 \n\u2014 \n-1 \n\n\n\n\n\n\n\n\n\n\ndifferences \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fair value of liabilities of IFRS 17 unit-linked contracts \n-96 \n-96 \n\u2014\n\u2014\n-96\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result before reinsurance \n 300 \n 12 \n 481 \n 19 \n 800 \n\n\n\n\n\n\n\n\n\n\nNet result from reinsurance contracts held \n-3 \n\u2014 \n-87\n\u2014\n-90\n\n\n\n\n\n\n\n\n\n\nPremiums paid to the reinsurer \n-30 \n\u2014 \n-95\n\u2014\n-125\n\n\n\n\n\n\n\n\n\n\nFee and commission income \n 7 \n\u2014 \n 10 \n\u2014 \n 17 \n\n\n\n\n\n\n\n\n\n\nAmounts recoverable from the reinsurer \n 21 \n\u2014 \n 0 \n\u2014 \n 21 \n\n\n\n\n\n\n\n\n\n\nTotal reinsurance finance income and expense \n 0 \n\u2014 \n-2\n\u2014\n-2\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result after reinsurance \n 297 \n 12 \n394 \n 19 \n 710 \n\n\n\n\n\n\n\n\n\n\nNon-directly attributable income or expenses \n 11 \n-1 \n-50\n8\n-31\n\n\n\n\n\n\n\n\n\n\nNet fee and commission income \n 67 \n 0 \n-2 \n 24 \n 90 \n\n\n\n\n\n\n\n\n\n\nNet other income \n\u2014 \n\u2014 \n\u2014\n68\n68\n\n\n\n\n\n\n\n\n\n\nOperating expenses (incl. bank and insurance tax) \n-48 \n-1 \n-48\n-83\n-179\n\n\n\n\n\n\n\n\n\n\nImpairment \u2013 other \n-9 \n 0 \n-1\n0\n-10\n\n\n\n\n\n\n\n\n\n\nShare in results of associated companies and joint ventures \n\u2014 \n\u2014 \n\u2014 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\nIncome tax expense \n\u2014 \n\u2014 \n\u2014\n-152\n-152\n\n\n\n\n\n\n\n\n\n\nResult after tax \n 308 \n 11 \n 344 \n-124 \n 527 \n\n\n\n\n\n\n\n\n\n\nattributable to minority interests \n\u2014\n\u2014 \n\u2014\n\u2014\n0\n\n\n\n\n\n\n\n\n\n\nattributable to equity holders of the parent \n\u2014\n\u2014 \n\u2014\n\u2014\n527\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 column \u2018of which Life direct participation (VFA)\u2019 relates to results of long-term unit-linked contracts in Central and Eastern \nEurope, 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 \nbacking these liabilities; \n- changes in the fair value of underlying liabilities of insurance contracts measured under the VFA, which represents the \nchange in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact \nin the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through \nP&L\u2019 (see also Note 3.3). \n\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included \nin 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity \n(i.e. mainly interest income from bonds) and income tax. \n\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million \neuros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher \nlevel of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having \nan impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros, \nrespectively, in 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\nNote 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI) \n \n\n\n\n\n\n\nOf which Life \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ndirect \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nparticipation\n\n\n\n\n\n\n\n\n\n\n\n\n\n(in millions of EUR) \nLife \n(VFA) \nNon-life\nNon-technical\nTotal\n\n\n\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result (OCI) on financial assets at FVOCI \n 74 \n 0 \n-1 \n 30 \n 103 \n\n\n\n\n\n\n\n\n\n\nChange in Insurance finance income and expense \u2013 OCI, before \n-199 \n 0 \n-26 \n\u2014 \n-225 \n\n\n\n\n\n\n\n\n\n\nreinsurance \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEffect of changes in interest rates and other financial assumptions in OCI, \n-199 \n 0 \n-26 \n\u2014 \n-224 \n\n\n\n\n\n\n\n\n\n\nincl. foreign exchange differences \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fair value of underlying liabilities of contracts measured under \n 0 \n 0 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\n\n\n\n\nVFA \u2013 OCI \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result before reinsurance \u2013 OCI \n-125 \n 0 \n-26 \n 30 \n-122 \n\n\n\n\n\n\n\n\n\n\nChange in reinsurance finance income and expense \u2013 OCI \n 0 \n\u2014 \n 0 \n\u2014 \n 0 \n\n\n\n\n\n\n\n\n\n\nDeferred taxes \n\u2014 \n\u2014 \n\u2014 \n 75 \n 75 \n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result after reinsurance, after tax \u2013 OCI \n-125 \n 0 \n-26 \n 104 \n-47 \n\n\n\n\n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result (OCI) on financial assets at FVOCI \n 594 \n 1 \n 49 \n 0 \n 644 \n\n\n\n\n\n\n\n\n\n\nChange in Insurance finance income and expense \u2013 OCI, before \n-538\n-1 \n-23\n\u2014\n-561\n\n\n\n\n\n\n\n\n\n\nreinsurance\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEffect of changes in interest rates and other financial assumptions in OCI, \n-537 \n 0 \n-23\n\u2014\n-560\n\n\n\n\n\n\n\n\n\n\nincl. foreign exchange differences \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fair value of underlying liabilities of contracts measured under \n-1\n-1 \n\u2014\n\u2014\n-1\n\n\n\n\n\n\n\n\n\n\nVFA \u2013 OCI\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result before reinsurance \u2013 OCI\n 56\n 0 \n 25 \n 0 \n 82 \n\n\n\n\n\n\n\n\n\n\nChange in reinsurance finance income and expense \u2013 OCI\n 0\n\u2014 \n 7 \n\u2014\n 7\n\n\n\n\n\n\n\n\n\n\nDeferred taxes \n\u2014\n\u2014 \n\u2014\n13\n13\n\n\n\n\n\n\n\n\n\n\nNet insurance and investment result after reinsurance, after tax \u2013 OCI\n 56\n 0 \n 33 \n 13\n 102\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \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 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the \n\u2018Effect of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019. \n\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other \ncomprehensive 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 \nrealised on FVOCI equity instruments are recognised directly in equity (see \u2018Transfer from revaluation reserves to retained \nearnings upon realisation\u2019 in \u2018Consolidated statement of changes in equity\u2019). The corresponding figures for 2024 and 2023 \nwere 40 million euros and 24 million euros, respectively, at insurance level of the 47 million euros and 21 million euros at group \nlevel. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 3.6.3: Insurance revenues (Life and Non-life) by component \n \n\n\n\n\n(in millions of EUR) \n\n\n2024\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\nTotal\nLife\nNon-life\nTotal\nLife\nNon-life\n\n\n\n\n\n\n\n\n\n\nInsurance revenues for BBA and VFA contracts \n 472 \n 432 \n 39 \n 406 \n 370 \n 36 \n\n\n\n\n\n\n\n\n\n\nAmounts related to changes in liabilities for remaining coverage \n 447 \n 408 \n 38 \n 390 \n 355 \n 35 \n\n\n\n\n\n\n\n\n\n\nExpected claims and other insurance service expenses \n 262 \n 232 \n 29 \n 226 \n 200 \n 25 \n\n\n\n\n\n\n\n\n\n\nChange in risk adjustment for risk expired (non-financial risk) \n 14 \n 13 \n 2 \n 15 \n 11 \n 3 \n\n\n\n\n\n\n\n\n\n\nCSM recognised for services provided \n 170 \n 163 \n 7 \n 150 \n 143 \n 6 \n\n\n\n\n\n\n\n\n\n\nRecovery of insurance acquisition cashflows \n 25 \n 24 \n 1 \n 16 \n 15 \n 1 \n\n\n\n\n\n\n\n\n\n\nInsurance revenues for contracts measured using the PAA \n 2 483 \n 31 \n 2 452 \n 2 284 \n 30 \n 2 255 \n\n\n\n\n\n\n\n\n\n\nTotal insurance revenues \n 2 955 \n 463 \n 2 492 \n 2 690 \n 400 \n 2 290 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n\n\n\n\n\n\nNote 3.6.4: Life insurance sales \n \n\n\n\n\n(in millions of EUR) \n2024\n2023\n\n\n\n\n\n\n\n\n\n\nTotal \n 2 906 \n2 328 \n\n\n\n\n\n\n\n\n\n\nIFRS 17 \u2013 non-unit-linked \n 1 214 \n975 \n\n\n\n\n\n\n\n\n\n\nIFRS 17 \u2013 unit-linked \n 158 \n171 \n\n\n\n\n\n\n\n\n\n\nIFRS 17 \u2013 hybrid \n 197 \n131 \n\n\n\n\n\n\n\n\n\n\nNon-IFRS 17 \n 1 337 \n1 051 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 \nunder IFRS 9. They concern the unit-linked insurance contracts in Belgium, for which margins are reported under \u2018Net fee and \ncommission income\u2019. \n\u2022 Hybrid products: see Note 5.6.1. \n\u2022 Sales of life insurance products in 2024 went up by 25% compared to 2023, largely driven by unit-linked insurance contracts \nin Belgium (non-IFRS 17) as well as by further growth in non-unit-linked insurance contracts (mainly in Belgium). \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n\n\n\n\n\nNote 3.6.5: Non-life insurance profitability by product (P&L) \n \n\n\n\n\n\n\n\nInsurance \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nfinance \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nincome and \n\nNet result \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nexpense \n\nfrom \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance \nbefore \nTotal \nreinsurance \nTotal \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance \nservice \nreinsurance \nbefore \ncontracts \nafter \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) \nrevenues \nexpenses \nin P&L \nreinsurance\nheld \nreinsurance\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPersonal insurance \n 308 \n-243 \n-8 \n 57 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMotor Third-Party Liability (MTPL) \n 594 \n-578 \n-19 \n-3 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLiabilities other than MTPL \n 154 \n-139 \n-6 \n 9 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCasco \n 467 \n-430 \n-2 \n 35 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nProperty incl. other than casco\n 952 \n-789 \n-11 \n 152 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal primary business \n 2 474 \n-2 179 \n-46 \n 249 \n-7 \n 242 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAccepted reinsurance \n 18 \n-3 \n 1 \n 16 \n-6 \n 10 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 2 492 \n-2 181 \n-45 \n 265 \n-13 \n 252 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPersonal insurance \n 274 \n-211 \n-4 \n 59 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMotor Third-Party Liability (MTPL) \n 562 \n-542 \n-13 \n 7 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLiabilities other than MTPL \n 144 \n-88 \n-4 \n 53 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCasco \n 409 \n-371 \n-2 \n 35 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nProperty incl. other than casco \n 883 \n-658 \n-8 \n 217 \n\u2014 \n\u2014 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal primary business \n 2 272 \n-1 870 \n-31 \n 371 \n-33 \n 338 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAccepted reinsurance \n 18 \n-2 \n 0 \n 17 \n-54 \n -38 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 2 290 \n-1 872 \n-30 \n 388 \n-87 \n 301 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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*) \n2024\n2023\n\n\n\n\n\n\n\n\n\n\nTotal \n-248 \n-215 \n\n\n\n\n\n\n\n\n\n\nImpairment on financial assets at AC and at FVOCI \n-199 \n16 \n\n\n\n\n\n\n\n\n\n\n(impairment on loans) \n\n\n\n\n\n\n\n\n\n\n\n\nBy IFRS category \n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at amortised cost \n-201 \n17 \n\n\n\n\n\n\n\n\n\n\nFinancial assets at fair value through OCI \n2 \n-1 \n\n\n\n\n\n\n\n\n\n\nBy product \n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances \n-224 \n-5 \n\n\n\n\n\n\n\n\n\n\nDebt securities \n4 \n6 \n\n\n\n\n\n\n\n\n\n\nOff-balance-sheet commitments and financial guarantees \n21 \n15 \n\n\n\n\n\n\n\n\n\n\nBy type \n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n-30 \n-41 \n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n162 \n160 \n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n-283 \n-92 \n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets \n-49 \n-11 \n\n\n\n\n\n\n\n\n\n\nBy business unit/country \n\n\n\n\n\n\n\n\n\n\n\n\nBelgium \n-246 \n-82 \n\n\n\n\n\n\n\n\n\n\nCzech Republic \n34 \n70 \n\n\n\n\n\n\n\n\n\n\nInternational Markets \n25 \n19 \n\n\n\n\n\n\n\n\n\n\nSlovakia \n18 \n8 \n\n\n\n\n\n\n\n\n\n\nHungary \n23 \n11 \n\n\n\n\n\n\n\n\n\n\nBulgaria \n-16\n0 \n\n\n\n\n\n\n\n\n\n\nGroup Centre \n-12 \n8 \n\n\n\n\n\n\n\n\n\n\nImpairment on goodwill \n0 \n-109 \n\n\n\n\n\n\n\n\n\n\nImpairment on other \n-49 \n-122 \n\n\n\n\n\n\n\n\n\n\nIntangible fixed assets (other than goodwill) \n-36 \n-77 \n\n\n\n\n\n\n\n\n\n\nProperty and equipment (including investment property) \n-2 \n-15 \n\n\n\n\n\n\n\n\n\n\nAssociated companies and joint ventures \n0 \n0 \n\n\n\n\n\n\n\n\n\n\nOther \n-11 \n-30 \n\n\n\n\n\n\n\n\n\n\n\n\n\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\n\n\n\n\n\n\n\n\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 create the models for the various portfolios using typical PD, EAD and LGD inputs, as well as macro- and microeconomic \nvariables to the extent that there is a statistical relationship. The macroeconomic variables are GDP growth, the \nunemployment rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation. \nMicroeconomic variables include, for example, confidence indicators, the harmonised consumer price index (HICP), the \nproducer price index (PPI), and so on. As a result of regular back-testing, models may change and economic variables may \nbe reassessed. The following table gives the base-case scenario for the three key indicators (GDP growth, unemployment \nrate and house price index) for each of our core countries for the coming years. After that, we take into account a gradual \nlinear transition towards a stable situation. \n\n\n\n\nMacroeconomic base-case scenario \u2013 key indicators \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n(used for situation at year-end 2024)* \n2024\n2025\n2026\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nReal GDP growth \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBelgium \n1.0% \n0.6% \n0.9% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCzech Republic \n1.0% \n2.3% \n2.3% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHungary \n0.4% \n2.1% \n3.1% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSlovakia \n2.2% \n2.0% \n2.6% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBulgaria \n2.2% \n2.1% \n2.4% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nUnemployment rate \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBelgium \n5.8% \n6.0% \n5.9% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCzech Republic \n2.9% \n3.2% \n3.1% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHungary \n4.6% \n4.3% \n3.9% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSlovakia \n5.5% \n5.5% \n5.5% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBulgaria \n4.2% \n4.2% \n4.0% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHouse price index \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBelgium \n2.9% \n3.0% \n3.0% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCzech Republic \n3.9% \n4.2% \n3.5% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHungary \n7.0% \n4.5% \n4.0% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSlovakia \n3.0% \n3.0% \n3.5% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBulgaria \n12.2% \n5.0% \n3.5% \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* 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 2024\u2019 and \u2018Our business units\u2019 sections. \n \n\n\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 use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The \nweightings at year-end 2024 were 60% for the \u2018base\u2019 scenario, 20% for the optimistic \u2018up\u2019 scenario and 20% for the pessimistic \n\u2018down\u2019 scenario. The forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on \nthe collectively assessed ECL (i.e. without the ECL for individually assessed loans of 1.65 billion euros at the end of 2024 and \n1.56 billion euros at the end of 2023) shows that the \u2018base\u2019 scenario generates an ECL of 0.81 billion euros (0.91 billion euros in \n2023), which is 0.02 billion euros lower than for the \u2018down\u2019 scenario (0.07 billion euros in 2023) and 0.01 billion euros higher than \nfor the \u2018up\u2019 scenario (0.03 billion euros in 2023). The assessed scenario-weighted collective ECL results (that were recognised) \namounted to 0.81 billion euros (0.93 billion euros in 2023). These amounts include the ECL related to geopolitical and \nmacroeconomic uncertainties.\n \n \n\n\n\n\n\n100% \n100% \n100% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCollectively assessed ECL by country (2024, in billions of EUR) \nbase-case scenario \noptimistic scenario \n pessimistic \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nscenario \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n0.81 \n0.79 \n0.83 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBelgium \n0.26 \n0.26\n0.27 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCzech Republic \n0.27 \n0.27 \n0.27 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSlovakia \n0.08\n0.08 \n0.08 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHungary \n0.04 \n0.04 \n0.05 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBulgaria \n0.15 \n0.14 \n0.15 \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\u2022 The management of ESG risks is an integral part of the Credit Risk Management Framework (CRMF; see \u2018How do we manage \nour risks?\u2019 (under \u2018Credit risk\u2019)). Dedicated processes have been developed focusing on the risk management of ESG-related \ncredit risks, and in particular on identification measurement, risk appetite and follow-up. A detailed explanation of the Credit \nRisk Management Framework is provided in the \u2018ESG in credit risk management\u2019 section of the Risk Report, which is available \nat www.kbc.com. The main elements of this management framework are as follows: \n- In order to identify ESG-related credit risks, we use the Environmental Risk Impact Map (ERIM) to assess the impact of \nvarious climate and environmental risk drivers on the credit risk profile. Additionally, regular thematic analyses are also \ncarried out (so-called \u2018White Papers\u2019). In the loan origination and review process, a sector-based environmental and social \n(E&S) heat map is used. This is a screening tool to identify the risks involved in the portfolio of loans to corporate entities \nand SMEs. For material credit files in scope of high E&S Risk sectors, an ESG assessment is performed at counterparty level. \n- In the context of risk quantification, specific measurement techniques are being developed to assess the impact of ESG \nrisks on our loan portfolio. For example, KBC is exploring the possibility of assessing sectoral climate impacts on Probability \nof Default (PD) based on climate scenarios from the Network for Greening the Financial System (NGFS). The quantifiability \nof ESG-related risks will gradually increase with the improved availability of data and measurement methodologies. \n- As regards risk appetite, KBC aims to limit the adverse impact of its activities on the environment and society and to \nencourage a positive impact, based on a responsible lending culture, the principles of which are laid out in a group-wide \nsustainability policy. KBC\u2019s commitment to consider climate and environmental risks is reflected in standards and policies \naddressing credit risk. These standards and policies apply in every step of the credit process, including, for instance, in \nloan pricing and collateral valuation. Furthermore, climate-related Key Risk Indicators (KRIs) were introduced in the Risk \nAppetite Process. These KRI\u2019s are monitored on a semi-annual basis by the Group Lending Committee and integrated in \nthe Climate Risk Dashboard. \n\u2022 KBC is gradually incorporating climate-related risks in the ECL process. This is reflected in our commitment, as described \nabove, to consider climate-related risks in our collateral valuation process and in the ESG assessment of the relevant \ncounterparty. KBC is also looking into the possibilities of a portfolio approach, which involves studying new methods to \ndetermine any relationship between the expected evolution of the climate and credit risk. As stated above, KBC is \ninvestigating whether a practicable model can be built to assess sectoral climate impacts based on climate scenarios \ndeveloped by the NGFS. At this stage of the investigation, it is too early to include any impacts in the accounting policies. \nManagement has the ability to overrule the expected credit losses and to capture the growing insights into ESG and climate-\nrelated 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\u2022 Impairment on goodwill in 2023: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the \nreduction of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future \nprojected earnings. This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros \n(based on the exchange rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of \n\u010cSOB Stavebn\u00ed (the former \u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time, \nwhich resulted in a one-off gain of 82 million euros. \n\u2022 Reserve for geopolitical and macroeconomic uncertainties (referred to as the \u2018reserve for geopolitical and emerging risks\u2019 up \nuntil year-end 2023): the outstanding balance of the ECL for geopolitical and macroeconomic uncertainties came to 117 million \neuros at year-end 2024; the corresponding figure at year-end 2023 was 256 million euros. This ECL is determined based on \nindividual counterparties and sectors in our portfolio which are deemed to have incurred an increase in credit risk because \nthey are either (\u00b0) exposed to the macroeconomic risks (e.g., high(er) inflation and interest rates, high(er) energy prices) or (\u00b0) \nindirectly exposed to ongoing military conflict, such as the one in Ukraine. The decline is largely attributable to the improved \nmicro- and macroeconomic outlook and the reversal of a collective migration of \u2018Stage 1\u2019 positions to \u2018Stage 2\u2019 for positions \nwhose credit risk has increased significantly, which are included in the standard staging assessment since the fourth quarter \nof 2024. At year-end 2023, 12 billion euros\u2019 worth of \u2018Stage 1\u2019 positions were collectively migrated to \u2018Stage 2\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\nNote 4.2: Financial assets and liabilities, breakdown by portfolio and quality \n\n\n\n\n\nNote 4.2.1: Impaired financial assets \n \n\n\n\n\n\nCarrying value before \n\nCarrying value after \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n(in millions of EUR) \nimpairment\nImpairment\nimpairment \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n31-12-2024 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at amortised cost: Loans and advances* \n 217 093 \n-2 448 \n 214 645 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 197 031 \n-176 \n 196 855 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 16 177 \n-331 \n 15 847 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 3 472 \n-1 803 \n 1 669 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 414 \n-138 \n 276 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at amortised cost: Debt securities \n 50 084 \n-8 \n 50 075 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 49 979 \n-6 \n 49 973 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 100 \n-1 \n 99 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 5 \n-2 \n 3 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at fair value through OCI: Debt securities \n22 543 \n-4 \n22 539 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 22 543 \n-4 \n 22 539 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 0 \n0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n31-12-2023 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at amortised cost: Loans and advances* \n 213 531 \n-2 474 \n 211 057 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 175 853 \n-146 \n 175 708 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 33 571 \n-490 \n 33 081 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 3 694 \n-1 750 \n 1 944 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 412 \n-88 \n 324 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at amortised cost: Debt securities \n 51 384 \n-12 \n 51 372 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 51 300 \n-6 \n 51 294 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 80 \n-4 \n 76 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 5 \n-2 \n 3 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFinancial assets at fair value through OCI: Debt securities \n 16 897 \n-5 \n 16 892 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n 16 864 \n-4 \n 16 861 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 33 \n-1 \n 32 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStage 3 (lifetime ECL) \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPurchased or originated credit impaired assets (POCI) \n 0 \n 0 \n 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\n\n\n\n\n\n\n\n\n\n\n\n\n\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 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 \ncustomers (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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily \nto: \n- an organic net increase in the loan portfolio (mainly mortgage loans and term loans); \n- a decrease in the carrying value 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 17.4 billion euros in 2024, \ndue primarily to: \n- the release of the migration to \u2018Stage 2\u2019 based on a collective approach of \u2018Stage 1\u2019 loans (see also Note 3.9) that have \nindirect exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic \nrisks (12.0 billion euros at year-end 2023). \n- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying \nvalue of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to \nthe introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a \nlesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk \nwas updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The \naim of both adjustments is to better reflect the underlying credit risk after initial recognition. \n- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect \nexposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks, \nwhich are included in the standard staging assessment since the fourth quarter of 2024. \n\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in \n\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly \noffset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial \nassets at fair value through OCI\u2019 (FVOCI) category. \n\u2022 Impairment: stable in 2024 compared to 2023: \n- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2). \n\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to \nmodifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage \n1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros \nin 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or \nlosses are recognised under impairment (see Note 3.9). \n\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject \nto enforcement activities; the corresponding figure for 2023 was 59 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.2.2: Impairment details for loans and advances at amortised cost \n \n\n\n\n\n\n\n\n\nSubject to \n\n\n\n\n\n\n\n\n\n\n\n\nlifetime ECL \n\n\n\n\n\n\n\n\n\nStage 1 \nStage 2 \nStage 3 \n(purchased or \n\n\n\n\n\n\n\n\n\nSubject to \nSubject to \nSubject to \noriginated credit \n\n\n\n\n\n\n\n\n(in millions of EUR) \n12-month ECL \nlifetime ECL \nlifetime ECL \nimpaired) \nTotal \n\n\n\n\n\n\n\n2024 \n\n\n\n\n\n\n\n\n\n\n\n\nImpairment on 1 January \n 146 \n 490 \n 1 750 \n 88 \n 2 474 \n\n\n\n\n\n\n\nMovements with an impact on results1\n 31 \n-154 \n 334 \n 49 \n 260 \n\n\n\n\n\n\n\nTransfer of financial assets \n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n-11 \n 76 \n 43 \n 0 \n 108 \n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 19 \n-112 \n 98 \n 0 \n 4 \n\n\n\n\n\n\n\nStage 3 \u2018non-performing\u2019 (lifetime ECL) \n 0 \n 12 \n-31 \n-1 \n-20 \n\n\n\n\n\n\n\nNew financial assets2\n 56 \n 14 \n 6 \n 0 \n 76 \n\n\n\n\n\n\n\nChanges in risk parameters during the reporting period \n-23 \n-81 \n 242 \n 50 \n 188 \n\n\n\n\n\n\n\nChanges in the model or methodology \n 1 \n-35 \n-1 \n 0 \n-35 \n\n\n\n\n\n\n\nDerecognised financial assets3\n-11 \n-28 \n-35 \n-1 \n-75 \n\n\n\n\n\n\n\nOther \n 0 \n 0 \n 12 \n 1 \n 13 \n\n\n\n\n\n\n\nMovements without an impact on results \n-1 \n-6 \n-280 \n 1 \n-286 \n\n\n\n\n\n\n\nDerecognised financial assets3\n-1 \n-2 \n-234 \n-1 \n-238 \n\n\n\n\n\n\n\nChanges in the scope of consolidation \n 1 \n-1 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nTransfers under IFRS 5\n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nOther \n-1 \n-3 \n-46 \n 2 \n-48 \n\n\n\n\n\n\n\nImpairment on 31 December \n 176 \n 331 \n 1 803 \n 138 \n 2 448 \n\n\n\n\n\n\n\n2023 \n\n\n\n\n\n\n\n\n\n\n\n\nImpairment on 1 January \n110 \n635 \n1 796 \n77 \n2 619 \n\n\n\n\n\n\n\nMovements with an impact on results1\n 37 \n-144 \n 141 \n 11 \n 46 \n\n\n\n\n\n\n\nTransfer of financial assets \n\n\n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n-12 \n 86 \n 41 \n 0 \n 115 \n\n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 14 \n-125\n 95 \n 0 \n-16 \n\n\n\n\n\n\n\nStage 3 \u2018non-performing\u2019 (lifetime ECL) \n 0 \n 17 \n-34 \n-1 \n-18 \n\n\n\n\n\n\n\nNew financial assets2\n 60 \n 22 \n 7 \n 0 \n 89 \n\n\n\n\n\n\n\nChanges in risk parameters during the reporting period \n-10 \n-98\n 76 \n 15 \n-17 \n\n\n\n\n\n\n\nChanges in the model or methodology \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nDerecognised financial assets3\n-15\n-45\n-58\n-2\n-121\n\n\n\n\n\n\n\nOther \n 0 \n 0 \n 14 \n 0 \n 14 \n\n\n\n\n\n\n\nMovements without an impact on results\n-2\n-1\n-187\n-1\n-191\n\n\n\n\n\n\n\nDerecognised financial assets3\n-2\n-1\n-207\n-1\n-211\n\n\n\n\n\n\n\nChanges in the scope of consolidation \n0 \n0 \n0 \n0 \n0 \n\n\n\n\n\n\n\nTransfers under IFRS 5\n0 \n0 \n0 \n0 \n0 \n\n\n\n\n\n\n\nOther \n0\n0\n19\n1\n20\n\n\n\n\n\n\n\nImpairment on 31 December \n146 \n490 \n1 750 \n88 \n2 474 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n1 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 \nfair 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. \n2 Also includes impairment related to new financial assets resulting from off-balance-sheet commitments and financial guarantees already given being called. \n3 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 \nbefore 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 \n\u2022 The table is limited to impairment on loans and advances at amortised cost, as impairment and the movements in impairment \non debt securities at amortised cost (from 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt \nsecurities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited. \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 \ncomposition and quality of the loan portfolio is set out in detail in the \u2018How do we manage our risks?\u2019 section (under \u2018Credit \nrisk\u2019). All parts of that particular section which have been audited by the statutory auditor are specified in that 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.4: Fair value of financial assets and liabilities \u2013 general \n\n\n\n\nFair value of financial instruments that are not measured at fair value \nFinancial assets at amortised \nFinancial liabilities at amortised \n\n\n\n\n\n\n\n\n\n\nin the balance sheet \ncost \ncost \n\n\n\n\n\n\n\n\n\n\n\nCarrying \n\n\n\n\n\n\n\n\n\n\n\n\n\n(in millions of EUR) \nvalue \nFair value \nCarrying value \nFair value \n\n\n\n\n\n\n\n\n\n\n31-12-2024 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFINANCIAL ASSETS \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to credit institutions and investment firms (incl. reverse repos) \n 23 360 \n 23 635 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLoans and advances to customers (incl. reverse repos) \n 191 285 \n 186 569 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nDebt securities \n 50 075 \n 48 205 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nOther \n 1 154 \n 1 154 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nAdjustment for fair value hedges for a portfolio of interest rate risk \n-1 930 \n\u2013 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nTotal \n 263 945 \n 259 564 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLevel 1 \n\u2013 \n 44 892 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLevel 2 \n\u2013 \n 25 400 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLevel 3 \n\u2013 \n 189 272 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nFINANCIAL LIABILITIES \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits from credit institutions and investment firms (incl. repos)\n\u2013 \n\u2013 \n 31 439 \n 31 263 \n\n\n\n\n\n\n\n\n\n\nDeposits from customers and debt securities (incl. repos)\n\u2013 \n\u2013 \n 272 428\n 272 595 \n\n\n\n\n\n\n\n\n\n\nLiabilities under investment contracts \n\u2013 \n\u2013 \n 27 \n 27 \n\n\n\n\n\n\n\n\n\n\nOther \n\u2013 \n\u2013 \n 2 157 \n 2 153 \n\n\n\n\n\n\n\n\n\n\nTotal \n\u2013 \n\u2013 \n 306 050 \n 306 038 \n\n\n\n\n\n\n\n\n\n\nLevel 1 \n\u2013 \n\u2013 \n\u2013 \n 16 \n\n\n\n\n\n\n\n\n\n\nLevel 2 \n\u2013 \n\u2013 \n\u2013 \n 101 305 \n\n\n\n\n\n\n\n\n\n\nLevel 3 \n\u2013 \n\u2013 \n\u2013 \n 204 717 \n\n\n\n\n\n\n\n\n\n\n31-12-2023 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFINANCIAL ASSETS \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to credit institutions and investment firms (incl. reverse repos) \n28 135 \n 28 100 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLoans and advances to customers (incl. reverse repos) \n182 921 \n 175 381 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nDebt securities \n51 372 \n 48 976 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nOther \n1 196 \n 1 196 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nAdjustment for fair value hedges for a portfolio of interest rate risk \n-2 402 \n\u2013 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nTotal \n261 223 \n 253 653 \n\u2013 \n\u2013 \n\n\n\n\n\n\n\n\n\n\nLevel 1 \n\u2013\n 45 992 \n\u2013\n\u2013\n\n\n\n\n\n\n\n\n\n\nLevel 2 \n\u2013\n31 953 \n\u2013\n\u2013\n\n\n\n\n\n\n\n\n\n\nLevel 3 \n\u2013\n 175 708 \n\u2013\n\u2013\n\n\n\n\n\n\n\n\n\n\nFINANCIAL LIABILITIES \n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits from credit institutions and investment firms (incl. repos)\n\u2013 \n\u2013 \n18 272 \n 18 142 \n\n\n\n\n\n\n\n\n\n\nDeposits from customers and debt securities (incl. repos)\n\u2013 \n\u2013 \n260 028 \n259 713 \n\n\n\n\n\n\n\n\n\n\nLiabilities under investment contracts \n\u2013\n\u2013\n29\n29\n\n\n\n\n\n\n\n\n\n\nOther \n\u2013 \n\u2013 \n2 546 \n 2 533 \n\n\n\n\n\n\n\n\n\n\nTotal \n\u2013 \n\u2013 \n280 874 \n 280 417 \n\n\n\n\n\n\n\n\n\n\nLevel 1 \n\u2013\n\u2013\n\u2013\n 119 \n\n\n\n\n\n\n\n\n\n\nLevel 2 \n\u2013\n\u2013\n\u2013\n 99 879 \n\n\n\n\n\n\n\n\n\n\nLevel 3 \n\u2013\n\u2013\n\u2013\n 180 418 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised \nlosses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-\ncollect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s \nlarge stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds \nwhich can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC \nare covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and \nSME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity \npurposes and are therefore irrelevant from a capital perspective. \n\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our \nrisks?\u2019 section. \n\u2022 All internal valuation models are validated by an independent Risk Validation Unit. In addition, the Executive Committee has \nappointed a Group Valuation Committee (GVC) to ensure that KBC meets all the legal requirements for measuring financial \nassets and liabilities at fair value. The GVC monitors consistent implementation of the KBC Valuation Framework, which \nconsists of various guidelines, including the Group Valuation Policy, the Group Market Value Adjustments Policy and the Group \nParameter 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 \nliabilities measured at fair value. The committee is made up of members from Finance, Risk Management and the Middle \nOffice. Valuation uncertainty measurements are made and reported to the GVC every three months. Certain fair values \ngenerated 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 on the balance sheet (see table) is calculated by \ndiscounting contractual cashflows at the risk-free rate. This calculation is then adjusted for credit risk by taking account of \nmargins obtained on similar, but recently issued, loans or by using a spread derived from the listed-bond spread. The fair \nvalue of the main portfolios takes account of prepayment risks and cap options. The fair value of time deposits is calculated \nby discounting contractual cashflows at the risk-free rate. The fair value of demand and savings deposits is presumed to be \nequal 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 \neuros have been reclassified from \u2018Available-for-sale assets\u2019 to \u2018Financial assets held at amortised cost\u2019. Due to this \nreclassification, changes in fair value (before tax) totalling 20 million euros were not recorded in the revaluation reserve in 2024 \n(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-\nend 2024 (2 808 million euros 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\nNote 4.5: Financial assets and liabilities measured at fair value \u2013 fair value hierarchy\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n\n\nFair value hierarchy \n31-12-2024\n31-12-2023\n\n\n\n\n\n(in millions of EUR) \nLevel 1 \nLevel 2 \nLevel 3 \nTotal \nLevel 1 \nLevel 2 \nLevel 3 \nTotal \n\n\n\n\n\nFINANCIAL ASSETS AT FAIR VALUE \n\n\n\n\n\n\n\n\n\n\n\n\n\nMandatorily measured at fair value through profit or loss other than held for trading \n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to credit institutions and investment firms (incl. \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\nreverse repos) \n\n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to customers (incl. reverse repos) \n 0 \n 0 \n 943 \n 943 \n 0 \n 0 \n 836 \n 836 \n\n\n\n\n\nEquity instruments \n 0 \n 0 \n 10 \n 10 \n 0 \n 0 \n 14 \n 14 \n\n\n\n\n\nInvestment contracts (insurance) \n 16 527 \n 75 \n 0 \n 16 602 \n 14 241 \n 107 \n 0 \n 14 348 \n\n\n\n\n\nDebt securities \n 13 \n 0 \n 57 \n 70 \n 13 \n 0 \n 1 \n 14 \n\n\n\n\n\nof which sovereign bonds\n 0 \n 0 \n 0 \n 0 \n 0\n 0\n 0\n 0\n\n\n\n\n\nHeld for trading \n\n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to credit institutions and investment firms (incl. \n 0 \n 1 \n 0 \n 1 \n 0 \n 1 \n 0 \n 1 \n\n\n\n\n\nreverse repos) \n\n\n\n\n\n\n\n\n\n\n\n\n\nLoans and advances to customers (incl. reverse repos) \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\nEquity instruments \n 902 \n 0 \n 0 \n 902 \n 567 \n 0 \n 2 \n 570 \n\n\n\n\n\nDebt securities \n 2 451 \n 2 570 \n 0 \n 5 021 \n 2 420 \n 717 \n 1 \n 3 138 \n\n\n\n\n\nof which sovereign bonds\n 2 397 \n 963 \n 0 \n 3 360 \n 2 364 \n 602 \n 0 \n 2 966 \n\n\n\n\n\nDerivatives \n 1 \n 3 527 \n 1 057 \n 4 584 \n 3 \n 3 908 \n 708 \n 4 618 \n\n\n\n\n\nAt fair value through OCI \n\n\n\n\n\n\n\n\n\n\n\n\n\nEquity instruments \n 1 219 \n 1 \n 501 \n 1 722 \n 1 212 \n 1 \n 483 \n 1 695 \n\n\n\n\n\nDebt securities \n 20 190 \n 2 199 \n 150 \n 22 539 \n 14 079 \n 2 628 \n 186 \n 16 892 \n\n\n\n\n\nof which sovereign bonds\n 16 892 \n 1 273 \n 0 \n 18 165 \n 11 679\n 1 501\n 26\n 13 206\n\n\n\n\n\nHedging derivatives\n\n\n\n\n\n\n\n\n\n\n\n\n\nDerivatives \n 0 \n 271\n 0 \n 271 \n0 \n295 \n0 \n295 \n\n\n\n\n\nTotal \n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal financial assets at fair value \n 41 303 \n 8 644 \n 2 717 \n 52 665 \n 32 534 \n 7 656 \n 2 231 \n 42 422 \n\n\n\n\n\nFINANCIAL LIABILITIES AT FAIR VALUE \n\n\n\n\n\n\n\n\n\n\n\n\n\nHeld for trading \n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits from credit institutions and investment firms (incl. repos) \n 0 \n 94 \n 0 \n 94 \n 0 \n 40 \n 0 \n 40 \n\n\n\n\n\nDeposits from customers and debt securities (incl. repos) \n 0 \n 22 \n 0 \n 22 \n 0 \n 81 \n 0 \n 81 \n\n\n\n\n\nDerivatives \n 1 \n 3 271 \n 1 406 \n 4 679 \n 2\n 4 460 \n 1 039 \n 5 501 \n\n\n\n\n\nShort positions \n 882 \n 0 \n 0 \n 882 \n 1 428 \n 0 \n 0 \n 1 428 \n\n\n\n\n\nDesignated upon initial recognition at fair value through profit or loss (FVO) \n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits from credit institutions and investment firms (incl. repos) \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\nDeposits from customers and debt securities (incl. repos) \n 0 \n 186 \n 850 \n 1 035 \n 0 \n 202 \n 1 157 \n 1 359 \n\n\n\n\n\nLiabilities under investment contracts \n 15 644 \n 0 \n 0 \n 15 644 \n 13 432 \n 0 \n 0 \n 13 432 \n\n\n\n\n\nHedging derivatives\n\n\n\n\n\n\n\n\n\n\n\n\n\nDerivatives \n 0 \n 265 \n 51 \n 316 \n 0 \n 306 \n 95 \n 401 \n\n\n\n\n\nTotal \n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal financial liabilities at fair value \n 16 527 \n 3 838 \n 2 307 \n 22 673\n 14 862 \n 5 090 \n 2 290\n 22 242 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 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 \nprices have to be used to measure the financial assets or liabilities at fair value. Level 1 inputs are prices that are readily \nand regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency (and that \nare quoted in active markets accessible to KBC). They represent actual and regularly occurring market transactions on an \narm\u2019s length basis. The fair value is then based on a mark-to-market valuation derived from currently available transaction \nprices. 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 \nor unobservable inputs. The use of observable inputs must be maximised. Observable inputs are also referred to as \u2018level \n2 inputs\u2019 and reflect the assumptions market participants would use in pricing the asset or liability based on market data \nobtained from sources independent of the reporting entity. Examples of observable inputs are the risk-free rate, exchange \nrates, stock prices and implied volatility. Valuation techniques based on observable inputs include discounted cashflow \nanalysis, or reference to the current or recent fair value of a similar instrument. \n- Unobservable inputs are also referred to as \u2018level 3 inputs\u2019 and reflect the reporting entity\u2019s own assumptions about the \nassumptions that market participants would use in pricing the asset or liability (including assumptions regarding the risks \ninvolved). Unobservable inputs reflect a market that is not active. For example, proxies and correlation factors can be \nconsidered to be unobservable in the market. \n\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 \nvalue hierarchy, the fair value measurement is classified in its entirety into the same level as the lowest level input that is \nsignificant to the entire fair value measurement. For example, if a fair value measurement uses observable inputs that require \nsignificant 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 \nfinancial instruments are summarised in the table. Whereas the majority of instruments of a certain type are within the level \nindicated 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 \nperiod. Transfers between the various levels are dealt with in more detail in Note 4.6 and Note 4.7. \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInstrument type \nProducts\nValuation technique\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLiquid financial instruments \nFX spots, exchange traded financial futures, exchange traded options, \nMark-to-market (quoted prices in active \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLevel 1 \nfor which quoted prices are \nexchange traded stocks, exchange traded funds, liquid government \nmarkets), for bonds: BVAL or vendor data \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nregularly available \nbonds, other liquid bonds, liquid asset backed securities (ABS) in active \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nmarkets \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPlain vanilla/liquid \n(Cross-currency) interest rate swaps (IRS), FX swaps, FX forwards, forward \nDiscounted cashflow analysis based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nderivatives \nrate agreements (FRA), inflation swaps, dividend swaps and futures, \ndiscount and estimation curves (derived \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nreverse floaters, bond future options, interest rate future options, overnight \nfrom quoted deposit rates, FX swaps and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nindex swaps (OIS), FX resets \n(CC)IRS) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCaps & floors, interest rate options, European stock options, European & \nOption pricing model based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAmerican FX options, forward starting options, digital FX options, FX strips \nobservable inputs (e.g., volatilities) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof simple options, European swaptions, European cancellable IRS \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLinear financial liabilities \nDeposits, simple cashflows, repo transactions \nDiscounted cashflow analysis based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n(without optional features) \u2013 \n\ndiscount and estimation curves (derived \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ncash instruments \n\nfrom quoted deposit rates, FX swaps and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLevel 2 \n\n\n(CC)IRS) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nSemi-liquid bonds/asset \nSemi-liquid bonds/asset backed securities \nBVAL, prices corroborated by alternative \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nbacked securities \n\nobservable market data, or using \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ncomparable spread method \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt instruments \nKBC IFIMA own issues (liabilities) \nDiscounted cashflow analysis and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nvaluation of related derivatives based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nobservable inputs \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLinear financial assets (cash \nLoans, commercial paper \nDiscounted cashflow analysis based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninstruments) \n\ndiscount and estimation curves (derived \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nfrom quoted deposit rates, FX swaps and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n(CC)IRS) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nExotic derivatives \nTarget profit forwards, flexible forwards, American & Asian stock options, \nOption pricing model based unobservable \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nBermudan swaptions, digital interest rate options, quanto interest rate \ninputs (e.g., correlation) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\noptions, digital stock options, composite stock options, barrier stock \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\noptions, quanto digital FX options, FX Asian options, FX European barrier \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\noptions, FX simple digital barrier options, FX touch rebates, inflation \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\noptions, Bermudan cancellable IRS, constant maturity swaps (CMS), CMS \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nspread swaps, CMS spread options, CMS interest rate caps/floors, \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nLevel 3 \n\n(callable) range accruals, auto-callable options, lookback options, \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ncommodity swaps and forwards \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nIlliquid credit-linked \nCollateralised debt obligations (notes) \nValuation model based on correlation of \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninstruments \n\nprobability of default of underlying assets \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPrivate equity investments \nPrivate equity and non-quoted participations \nBased on the valuation guidelines of the \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEuropean Private Equity & Venture Capital \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAssociation \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nIlliquid bonds/asset backed \nIlliquid (mortgage) bonds/asset backed securities that are indicatively \nBVAL, third-party pricing (e.g., lead \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nsecurities \npriced by a single pricing provider in an inactive market \nmanager), where prices cannot be \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ncorroborated due to a lack of \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\navailable/reliable alternative market data \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt instruments \nKBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB \nDiscounted cashflow analysis and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nvaluation of related derivatives based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nunobservable inputs (indicative pricing by \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nthird parties for derivatives) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nStructured loans \nGovernment-regulated loans with leveraged interest rates and exotic \nDiscounted cashflow analysis and \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nearly repayment options (K&H) \nvaluation of related derivatives based on \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nunobservable inputs \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.6: Financial assets and liabilities measured at fair value \u2013 transfers between levels 1 and 2 \n\u2022 In 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million \neuros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively, \nin 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate \nbonds. \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3 \n \n\u2022 In 2024, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the \nfollowing: \n- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances \nincreased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by \ninstruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new \npurchases. \n- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on \naccount of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million \neuros, due mainly to new purchases, partly offset by the sale of existing positions. \n- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in \nmarket inputs and new purchases, partly offset by the sale of existing positions. \n- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in \nmarket inputs and new transactions, partly offset by the settlement of existing positions. \n- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by \n307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly \noffset by new transactions and changes in market inputs. \n- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to \nchanges in market inputs. \n\u2022 In 2023, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the \nfollowing: \n- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances \nincreased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by \ninstruments 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 \naccount of instruments reaching maturity and the sale of existing positions. The fair value of the equity instruments rose \nby 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 the sale of \nexisting 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 the sale of \nexisting 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 \neuros, primarily on account of purchases and changes in market inputs, only partly offset by transactions reaching maturity \nand the sale of existing positions. \n\u2022 Some level 3 assets are associated or economically hedged with identical level 3 liabilities, which means that KBC\u2019s exposure \nto unobservable inputs is lower than would appear from the gross figures. Most of the level 3 instruments are also valued using \nthird-party pricing sources, with KBC not developing any unobservable inputs itself. The main unobservable inputs applied by \nKBC to the valuation of exotic derivatives include: mean reversion parameter on Bermudan swaptions, equity cross-\ncorrelations and volatilities for certain stock options, interest-rate correlations for CMS spread options, and the funding costs \nused to determine the forward equity prices as part of the valuation of certain equity derivatives. The change in fair value \nresulting 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.8: Derivatives \n \n\u2022 In terms of volume of the notional amounts of the derivatives, approximately 75% are trading derivatives and approximately \n25% are hedging derivatives at year-end 2024 (the same as at year-end 2023). \n\u2022 The majority of trading derivatives are effectively included in the trading book but are largely economically hedged (limited \nopen positions) by other trading derivatives (such as derivative transactions initiated by commercial clients that are \neconomically hedged) or by balance sheet positions (such as currency positions), which leads to large volumes of notional \namounts 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 \nrisk. These are not subject to hedge accounting. Hedge accounting is applied to most of the ALM interest rate contracts. Only \na limited number of the ALM derivatives for foreign currencies are included in hedge accounting. \nNote 4.8.1: Trading derivatives \n\n\n\n\n(in millions of EUR) \n\n\n\n31-12-2024\n\n\n\n31-12-2023\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCarrying value \nNotional amounts* \nCarrying value \nNotional amounts* \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAssets\nLiabilities\nPurchased\nSold\nAssets\nLiabilities\nPurchased\nSold\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 4 584 \n 4 679 \n 616 452 \n 615 520 \n 4 618 \n 5 501 \n 598 880 \n 591 923 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate contracts \n 1 589 \n 1 781 \n 429 232 \n 426 678 \n 1 821 \n 2 252 \n 403 723 \n 395 170 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which interest rate swaps and futures \n 1 510 \n 1 740 \n 421 656 \n 422 160 \n 1 684 \n 2 169 \n 394 018 \n 389 184 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which options \n 80 \n 41 \n 7 576 \n 4 518 \n 137 \n 83 \n 9 705 \n 5 986 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nForeign exchange contracts \n 2 193 \n 1 784 \n 172 410 \n 174 374 \n 2 318 \n 2 481 \n 180 438 \n 182 719 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which currency and interest rate swaps, forward \n 2 101 \n 1 720 \n 167 819 \n 167 306 \n 2 246 \n 2 409 \n 176 708 \n 176 829 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nforeign exchange transactions and futures \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which options \n 92 \n 64 \n 4 592 \n 7 067 \n 72 \n 72 \n 3 730 \n 5 890 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nEquity contracts \n 799 \n 1 110 \n 14 530 \n 14 191 \n 471 \n 761 \n 14 381 \n 13 698 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which equity swaps \n 646 \n 692 \n 11 348 \n 10 995 \n 385 \n 393 \n 11 314 \n 11 031 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which options \n 153 \n 418 \n 3 181 \n 3 196 \n 85 \n 368 \n 3 067 \n 2 667 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCredit contracts\n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nof which credit default swaps \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCommodity and other contracts \n 4 \n 3 \n 280 \n 277 \n 8 \n 7 \n 338 \n 336 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 this table, both legs of the derivatives are reported in the notional amounts. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 4.8.2: Hedging derivatives \n \n\n\n\n\n31-12-2024 \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(in millions of EUR) \n\n\n\nHedging instrument\n\n\n\nHedged item\nImpact on 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\nChange in fair \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChange in fair \n\n\n\nvalue of hedged \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nvalue of hedging \n\n\n\ninstruments used\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninstruments used \n\n\n\nas basis for \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nas basis for \n\n\n\nrecognising \nIneffective \nEffective \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nrecognising hedge \n\n\n\nhedge \nportion \nportion \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nineffectiveness for \n\n\n\nineffectiveness \nrecognised in \nrecognised in \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNotional amounts1\nCarrying value\nthe period2\nType\n\n\nfor the period2\nprofit or loss \nOCI \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOf which \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal (including \naccumulated \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nfair value \nfair value \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHedging strategy \nPurchased \nSold \nAssets \nLiabilities \n\n\nchanges) \nadjustments \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFair value micro hedge \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n 37 727 \n 37 727 \n 96 \n 63 \n 281\nDebt securities held at AC \n 8 050 \n-252 \n 17 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n 0 \n 0 \n 0 \n 0 \n 0 \nLoans and advances at AC \n 569 \n 33 \n-45 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate swaps \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities held at FVOCI \n 7 254 \n 64 \n 80 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities issued at AC \n 21 802 \n-226 \n-334 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits at AC \n 102 \n-11 \n 13 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 37 727 \n 37 727 \n 96 \n 63 \n 281 \nTotal \n\n\n-269 \n 11 \n- \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPortfolio hedge of interest rate risk \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n 141 341 \n 141 341 \n 67 \n 95 \n-464 \nDebt securities held at AC \n 831 \n-31 \n-23 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n 1 214 \n 0 \n 48 \n 0 \n-3 \nLoans and advances at AC \n 121 621 \n-1 988 \n 622 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate options \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities held at FVOCI \n 76 \n 0 \n-3 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities issued at AC \n 0 \n 0 \n 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\nDeposits at AC \n 17 471 \n-379 \n-121 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInsurance contract liabilities, Life \n 161 \n 6 \n-6 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 142 555 \n 141 341 \n 115 \n 95 \n-467\nTotal \n\n\n 469 \n 2 \n- \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCashflow hedge (micro hedge and portfolio hedge) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n 17 376 \n 17 376 \n 5 \n 120 \n 22 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n 1 830 \n 1 790 \n 19 \n 17 \n-30 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate swaps \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n 19 206 \n 19 166 \n 24 \n 137 \n-8 \nTotal \n\n\n 8 \n 0 \n-486 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHedge of 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\nTotal3\n 2 826 \n 2 806 \n 35 \n 518 \n 54 \nTotal \n\n\n-54 \n 0 \n 147 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n1 In this table, both legs of the derivatives are reported in the notional amounts. \n2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3). \n3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits. \n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n31-12-2023 \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(in millions of EUR) \n\n\n\n\nHedging instrument \n\n\n\nHedged item \nImpact on 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\nChange in fair \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nChange in fair \n\n\n\nvalue of hedged \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nvalue of hedging \n\n\n\ninstruments used\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninstruments used \n\n\n\nas basis for \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nas basis for \n\n\n\nrecognising \nIneffective \nEffective \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nrecognising hedge \n\n\n\nhedge \nportion \nportion \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nineffectiveness for \n\n\n\nineffectiveness \nrecognised in \nrecognised in \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNotional amounts1\nCarrying value\nthe period2\nType\n\n\nfor the period2\nprofit or loss \nOCI \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nOf which \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal (including \naccumulated \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nfair value \nfair value \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHedging strategy \nPurchased \nSold \nAssets \nLiabilities \n\n\nchanges) \nadjustments\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nFair value micro hedge \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n31 864 \n31 864 \n97 \n112 \n267 \nDebt securities held at AC \n6 547 \n-300 \n377 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n0 \n0 \n0 \n0 \n0 \nLoans and advances at AC \n601 \n75 \n3 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate swaps \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities held at FVOCI \n2 999 \n-25 \n124 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities issued at AC \n21 285 \n-560 \n-774 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits at AC \n0 \n0 \n0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n31 864\n31 864 \n97 \n112 \n267 \nTotal \n\n\n-269 \n-2 \n\u2013 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nPortfolio hedge of interest rate risk \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n143 932 \n143 932 \n93 \n123 \n-995 \nDebt securities held at AC \n937 \n-7 \n115 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n1 618 \n0 \n70 \n0 \n-27 \nLoans and advances at AC \n125 541 \n-2 473 \n1 841 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate options \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities held at FVOCI \n85 \n3 \n9 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDebt securities issued at AC \n0 \n0 \n0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nDeposits at AC \n15 938 \n-507 \n-936 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n145 550 \n143 932 \n163 \n123 \n-1 022 \nTotal \n\n\n1 029 \n7 \n\u2013 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCashflow hedge (micro hedge and portfolio hedge) \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nInterest rate swaps \n19 603 \n19 603 \n15 \n127 \n401 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nCurrency and \n1 181 \n1 205 \n1 \n22 \n-14 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\ninterest rate swaps \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nTotal \n20 784 \n20 808 \n17 \n149 \n387 \nTotal \n\n\n-395 \n-9 \n-611 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nHedge of 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\nTotal3\n2 579 \n2 570 \n19 \n460 \n77 \nTotal \n\n\n-77 \n0 \n92 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n1 In this table, both legs of the derivatives are reported in the notional amounts. \n2 Ineffectiveness is recognised in \u2018Net result from financial instruments at fair value through profit or loss\u2019 (also see Note 3.3). \n3 Carrying value liabilities: hedging instruments mostly in the form of foreign currency deposits. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 Treasury departments of the various entities manage the interest rate risk. To prevent rate movements from having a \nnegative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other \nderivatives. \n\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority \nand risks are hedged in accordance with the general ALM framework. Only then is a decision made on which, if any, of these \ntechniques will be used to limit any resulting accounting mismatch. \n\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer \napplied came to -187 million euros in 2024 (-322 million euros in 2023). The accumulated amount of fair value hedge \nadjustments remaining on the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and \nlosses amounted to -99 million euros in 2024 (-82 million euros in 2023). These adjustments are amortised to profit or loss. \n\u2022 The difference between the \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item and \naccumulated fair value adjustments following portfolio hedges of interest rate risk as included in Note 4.8.2 is attributable to \naccumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the \nbalance sheet. \n\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk were less \nnegative in 2024 due to the decrease in the risk-free rate and the unwinding effect of the negative accumulated fair value \nadjustment. The \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item on the liabilities \nside of the balance sheet was also less negative for the same reasons. \n\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3. \n \n \n\n\n\n\nEstimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR) \nInflow \nOutflow \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNot more than three months \n 21 \n-38 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMore than three but not more than six months \n 46 \n-54 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMore than six months but not more than one year \n 103 \n-177 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMore than one but not more than two years \n 183 \n-325 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMore than two but not more than five years \n 533 \n-770 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nMore than five years \n 1 321 \n-1 572 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.2: Tax assets and tax liabilities \n\n\n\n\n(in millions of EUR) \n31-12-2024\n31-12-2023\n\n\n\n\n\nCURRENT TAXES \n\n\n\n\n\n\n\nCurrent tax assets \n 59 \n176 \n\n\n\n\n\nCurrent tax liabilities \n 121 \n99 \n\n\n\n\n\nDEFERRED TAXES \n 593 \n351 \n\n\n\n\n\nDeferred tax assets by type of temporary difference \n1 382 \n1 134 \n\n\n\n\n\nEmployee benefits \n 80 \n85 \n\n\n\n\n\nLosses carried forward \n 366 \n103 \n\n\n\n\n\nTangible and intangible fixed assets \n 98 \n80 \n\n\n\n\n\nProvisions for risks and charges \n 18 \n19 \n\n\n\n\n\nImpairment for losses on loans and advances \n 212 \n207 \n\n\n\n\n\nFinancial instruments at fair value through profit or loss and fair value hedges\n 86 \n92 \n\n\n\n\n\nFair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations \n 426 \n445 \n\n\n\n\n\nInsurance contract liabilities \n 33 \n36 \n\n\n\n\n\nOther, incl. reinsurance contracts \n 64 \n68 \n\n\n\n\n\nDeferred tax liabilities by type of temporary difference \n 789 \n784 \n\n\n\n\n\nEmployee benefits \n 113 \n95 \n\n\n\n\n\nLosses carried forward \n 0 \n0 \n\n\n\n\n\nTangible and intangible fixed assets \n 57 \n43 \n\n\n\n\n\nProvisions for risks and charges \n 9 \n9 \n\n\n\n\n\nImpairment for losses on loans and advances \n 3 \n3 \n\n\n\n\n\nFinancial instruments at fair value through profit or loss and fair value hedges\n 85 \n76 \n\n\n\n\n\nFair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations \n 21 \n41 \n\n\n\n\n\nInsurance contract liabilities \n 452 \n467 \n\n\n\n\n\nOther, incl. reinsurance contracts \n 50 \n50 \n\n\n\n\n\nRecognised as a net amount in the balance sheet as follows: \n\n\n\n\n\n\n\nDeferred tax assets \n 942 \n724 \n\n\n\n\n\nDeferred tax liabilities \n 349 \n373 \n\n\n\n\n\nUnused tax losses and unused tax credits \n 95 \n117 \n\n\n\n\n\n\n\n\n\n\n\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 \nprofit will be available against which the deductible temporary differences can be utilised in the foreseeable future (limited to \na 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 \nproof 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 (+242 million euros in 2024) breaks down as follows: \n- The change in deferred tax assets of +248 million euros was primarily due to: \n- an increase in deferred tax assets via the income statement (+235 million euros), due mainly to losses carried forward \n(+263 million euros). This increase includes the recognition of a deferred tax asset for KBC Bank NV of 318 million euros \nrelating to the imminent liquidation of Exicon (formerly KBC Bank Ireland) in the fourth quarter of 2024, partly offset by \nusing deferred tax assets previously created due to taxable profits; \n- a decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments measured \nat fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-19 million euros). \n- The change in deferred tax liabilities of +6 million euros was accounted for chiefly by: \n- an increase in deferred tax liabilities for employee benefit liabilities mainly recorded through OCI (+17 million euros), \ntangible and intangible fixed assets (+14 million euros) and reinforced by financial instruments at fair value through \nprofit or loss and fair value hedges (+9 million euros); \n- a decrease in deferred tax liabilities on account of changes in the revaluation reserve for financial instruments \nmeasured at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-19 million \neuros); \n- a decrease in deferred tax liabilities for insurance contract liabilities (-15 million euros), with an amount of +64 million \neuros being recorded through OCI and -49 million euros being recorded via the income statement. \n\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank and \u010cSOB in the Czech \nRepublic.\n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.5: Goodwill and other intangible assets \n\n\n\n\n\n\n\n\n\n\nSoftware \nSoftware \n\n\n\n\n\n\n\n\n\ndeveloped \ndeveloped \n\n\n\n\n\n\n\n(in millions of EUR) \nGoodwill \nin-house \nexternally\nOther\nTotal\n\n\n\n\n\n2024 \n\n\n\n\n\n\n\n\n\n\nOpening balance \n1 240\n829 \n266 \n20 \n2 355 \n\n\n\n\n\nAcquisitions \n 0 \n 311 \n 69 \n 7 \n 387 \n\n\n\n\n\nDisposals \n 0 \n 0 \n-7 \n-6 \n-14 \n\n\n\n\n\nAmortisation\n - \n-124 \n-63 \n-2 \n-188 \n\n\n\n\n\nOther movements \n-18 \n-44 \n 2 \n-4 \n-65 \n\n\n\n\n\nClosing balance \n 1 221 \n 972 \n 266 \n 15 \n 2 475 \n\n\n\n\n\nAccumulated amortisation and impairment \n 369 \n 1 006 \n 886 \n 24 \n 2 286 \n\n\n\n\n\n2023 \n\n\n\n\n\n\n\n\n\n\nOpening balance \n1 346 \n719 \n250 \n16 \n2 331 \n\n\n\n\n\nAcquisitions \n0\n271\n87\n11\n370\n\n\n\n\n\nDisposals \n0\n0\n0\n-2\n-2\n\n\n\n\n\nAmortisation\n-\n-113\n-64\n-2\n-179\n\n\n\n\n\nOther movements \n-106\n-48\n-7\n-3\n-164\n\n\n\n\n\nClosing balance \n1 240 \n829 \n266 \n20 \n2 355 \n\n\n\n\n\nAccumulated amortisation and impairment \n369 \n806 \n909 \n31 \n2 115 \n\n\n\n\n\n\n\n\n\n\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 \nactivities. Goodwill paid on associated companies: included in the nominal value of \u2018Investments in associated companies\u2019 \nshown on the balance sheet. \n\u2022 Impairment testing: a test was carried out to establish whether impairment on goodwill had to be recognised (see table and \nNote 3.9). This impairment test is performed at least once a year. We also carry out a high-level assessment on a quarterly \nbasis to see whether there is an indication of impairment. In the test, each entity is regarded as a separate cash-generating \nunit. This is because 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 \ncarrying value. The recoverable amount is defined as the higher of the value in use (calculated based on discounted cashflow \nanalysis) 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 \nthe discounted cashflow method. The discounted cashflow method calculates the recoverable amount of an investment as \nthe present value of all future free cashflows of the business. This method is based on long-term projections about the \ncompany\u2019s business and the resulting cashflows (i.e. projections for a number of years ahead and the residual value of the \nbusiness at the end of the specific projection period). These long-term projections are the result of an assessment of past \nand present performances combined with external sources of information on future performances in the respective markets \nand the global macroeconomic environment. Consequently, in cases where sustainability aspects and products/projects \nhave been factored into the underlying financial projections, this will also affect the valuation. The ultimate growth rate is \ndetermined using a long-term average market growth rate. The present value of these future cashflows is calculated using a \ncompound discount rate which is based on the capital asset pricing model (CAPM). A country-specific risk-free rate and a \nmarket-risk premium (multiplied by an activity beta) are also used in the calculation. KBC has developed two distinct \ndiscounted cashflow models, viz. a bank model and an insurance model. Free cashflows in both cases are the dividends that \ncan 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\nDiscount rates throughout the specific period \n\n\n\n\n\nGoodwill outstanding\n\n\n\nof cashflow projections \n\n\n\n\n\n(in millions of EUR) \n31-12-2024 \n31-12-2023\n31-12-2024\n31-12-2023\n\n\n\n\n\nK&H Bank \n169\n181\n14.7% \u2013 13.5% \n15.2% \u2013 13.7% \n\n\n\n\n\n\u010cSOB (Czech Republic) \n248\n252\n12.7% \u2013 12.6% \n13.0% \u2013 12.8% \n\n\n\n\n\n\u010cSOB Stavebn\u00ed sporitelna\n65\n66\n12.7% \u2013 12.6%\n13.0% \u2013 12.8% \n\n\n\n\n\nUnited Bulgarian Bank \n546\n546\n12.4% \u2013 12.3% \n13.3% \u2013 12.5% \n\n\n\n\n\nDZI Insurance \n75\n75\n10.1%\n11.2% \u2013 10.4%\n\n\n\n\n\nKBC Commercial Finance \n21\n21\n11.6% \u2013 12.2% \n12.0% \n\n\n\n\n\nPension Insurance Company UBB \n56\n56\n7.3% \u2013 7.8% \n8.3% \u2013 8.4% \n\n\n\n\n\nRest \n42\n42\n\u2013\n\u2013\n\n\n\n\n\nTotal \n1 221 \n1 240 \n\u2013\n\u2013\n\n\n\n\n\n\n\n\n\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 \naccount of current strong growth in the Central and Eastern European countries, where the growth rate is expected to \ndevelop 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 \nrate of the gross domestic product. This rate depends on the country and varied between 3.2% and 4.7% in 2024 (between \n3.2% and 4.7% in 2023). \n\u2022 For all entities, at year-end 2024 the recoverable amount exceeded the carrying value to such a large extent that no \nreasonably possible change in the key assumptions would result in the recoverable amount being less than or equal to the \ncarrying value. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.6: Insurance \u2013 balance sheet \n\n\nNote 5.6.1: Breakdown of (re)insurance contract assets and liabilities \n\n\n\n\n(in millions of EUR) \n\n\n\n2024\n\n\n\n2023\n\n\n\n\n\n\n\n\nTotal\nPAA\nBBA\nVFA\nTotal\nPAA\nBBA\nVFA\n\n\n\n\n\n\n\nLife \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nReinsurance assets \n 20 \n 20 \n\u2014 \n\u2014\n0\n0\n\u2014\n\u2014\n\n\n\n\n\n\n\nInsurance contract liabilities \n13 925 \n 57 \n12 899 \n 969 \n13 862 \n 55 \n12 878 \n 928 \n\n\n\n\n\n\n\nLRC (liability for remaining coverage) \n13 718 \n 2 \n12 769 \n 948 \n13 674 \n 2 \n12 762 \n 910 \n\n\n\n\n\n\n\nUnit-linked \n 823 \n 0 \n\u2014 \n 823 \n 798 \n 0 \n\u2014 \n 798 \n\n\n\n\n\n\n\nNon-unit-linked \n11 931 \n 2 \n11 929 \n\u2014 \n12 651 \n 2 \n12 650 \n\u2014 \n\n\n\n\n\n\n\nHybrid \n 964 \n 0 \n 840 \n 125 \n 225 \n 0 \n 112 \n 112 \n\n\n\n\n\n\n\nAccepted reinsurance \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nLIC (liability for incurred claims) \n 207 \n 55 \n 130 \n 22\n 188 \n 53 \n 116 \n 18 \n\n\n\n\n\n\n\nUnit-linked \n 19 \n 0 \n\u2014 \n 19 \n 13 \n 0 \n\u2014 \n 13 \n\n\n\n\n\n\n\nNon-unit-linked \n 168 \n 55 \n 112 \n\u2014 \n 153 \n 53 \n 99 \n\u2014 \n\n\n\n\n\n\n\nHybrid \n 21\n 0 \n 18 \n 3 \n 21 \n 0 \n 17 \n 4 \n\n\n\n\n\n\n\nAccepted reinsurance \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nAssets for acquisition cost \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\n\nNon-life \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nReinsurance assets \n 98 \n 98 \n\u2014 \n\u2014 \n 64 \n64 \n\u2014\n\u2014\n\n\n\n\n\n\n\nInsurance contract liabilities \n3 186 \n2 971 \n 214 \n\u2014 \n2 922 \n2 716 \n 206 \n\u2014 \n\n\n\n\n\n\n\nLRC (liability for remaining coverage) \n 744 \n 547 \n 196 \n\u2014 \n 701 \n 512 \n 190 \n\u2014 \n\n\n\n\n\n\n\nPersonal insurance \n 211 \n 14 \n 196 \n\u2014 \n 205 \n 16 \n 190 \n\u2014 \n\n\n\n\n\n\n\nMotor Third-Party Liability (MTPL) \n 156 \n 156 \n\u2014 \n\u2014 \n 160 \n 160 \n\u2014\n\u2014\n\n\n\n\n\n\n\nLiabilities other than MTPL \n 25 \n 25 \n\u2014 \n\u2014 \n 25 \n 25 \n\u2014\n\u2014\n\n\n\n\n\n\n\nCasco \n 118 \n 118 \n\u2014 \n\u2014 \n 96 \n 96 \n\u2014\n\u2014\n\n\n\n\n\n\n\nProperty other than casco \n 234 \n 234 \n\u2014 \n\u2014 \n 216 \n 216 \n\u2014\n\u2014\n\n\n\n\n\n\n\nAccepted reinsurance \n-1 \n-1 \n 0 \n\u2014 \n 0 \n 0 \n 0 \n\u2014 \n\n\n\n\n\n\n\nLIC (liability for incurred claims) \n2 442 \n2 424 \n 18 \n\u2014 \n2 220 \n2 204 \n 16 \n\u2014 \n\n\n\n\n\n\n\nPersonal insurance \n 656 \n 638 \n 18 \n\u2014 \n 610 \n 594 \n 16 \n\u2014 \n\n\n\n\n\n\n\nMotor Third-Party Liability (MTPL) \n 935 \n 935 \n\u2014 \n\u2014 \n 863 \n 863 \n\u2014\n\u2014\n\n\n\n\n\n\n\nLiabilities other than MTPL \n 401 \n 401 \n\u2014 \n\u2014 \n 357 \n 357 \n\u2014\n\u2014\n\n\n\n\n\n\n\nCasco \n 66 \n 66 \n\u2014 \n\u2014 \n 53 \n 53 \n\u2014\n\u2014\n\n\n\n\n\n\n\nProperty other than casco \n 364 \n 364 \n\u2014 \n\u2014 \n 319 \n 319 \n\u2014\n\u2014\n\n\n\n\n\n\n\nAccepted reinsurance \n 20 \n 20 \n 0 \n\u2014 \n 18 \n 18 \n 0 \n\u2014 \n\n\n\n\n\n\n\nAssets for acquisition cost \n 0 \n 0 \n 0 \n\u2014 \n 0 \n 0 \n 0 \n\u2014 \n\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 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 \nare 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 \nare based on various internal and external sources of information. These liabilities are generally calculated using assumptions \nthat were applicable at the inception of the insurance contracts and as such determine the CSM at initial recognition. The \nkey assumptions are: \n- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on \nstandard mortality tables and adapted where necessary to reflect the group\u2019s own experience. \n- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and \nassociated overhead expenses which are considered directly attributable. Expenses are considered directly attributable \nif they are 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 \nis entered into and the applicable terms and conditions) and the country, making it impossible to quantify these \nassumptions for the entire group. \n\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling \ncosts, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors \nsuch as court awards, legislation and discounting. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 \nservices, \u2018multivariate coverage units\u2019 are used, taking into consideration that (a) coverage units are determined based on \nthe individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate \nlevel of service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits \nprovided for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting \nperiod. \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 \nallocated 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 \nthe 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 \nlocal product mix and the way in which the insurance business is managed locally. The table presents a high-level breakdown \nby product. \n\u2022 Within hybrid products, the policyholder can switch within the same contract, containing the coverage of significant insurance \nrisk, from the unit-linked to the non-unit-linked component and vice versa. \n\u2022 Non-life LRC BBA (196 million euros in 2024, 190 million euros in 2023) represents the LRC health insurance (as part of personal \ninsurance) as they are mostly long-term contracts and are therefore measured according to the BBA. Non-life LIC PAA for \npersonal insurance (638 million euros in 2024, 594 million euros in 2023) represents the incurred claims under personal insurance \nwith 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. \nTherefore, the reinsurance result is not in the same order of magnitude as the direct insurance result, which means the \nmovements in reinsurance contract assets are limited. \n\u2022 Current account transactions with intermediaries and reinsurers are not included in the measurement of insurance liabilities \nbut treated as a separate asset measured under IFRS 9. \n\u2022 The following yield curves are used to discount cashflows that do not vary based on the returns of underlying items. As these \nbottom-up discount curves are not entity-specific but currency-dependent, two curves are included for each currency, one \nwith Solvency II volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other \nliabilities for which bottom-up curves are used). \n\n\n\n\nYield curve used to discount cashflows not varying based on underlying items; bottom-up method (forward rates) \n\n\n\n\n\n\n\n\nCurrency\nIlliquidity premium\n\n\n\nPortfolio duration\n\n\n\n\n\n\n\n\n1 year \n5 years \n10 years \n20 years \n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\nEUR \nwith volatility adjustment \n1.91% \n2.61% \n2.84% \n2.14% \n\n\n\n\n\n\n\nwithout volatility adjustment \n1.67% \n2.37% \n2.60% \n1.91% \n\n\n\n\n\n\nCZK \nwith volatility adjustment \n4.01% \n3.93% \n4.30% \n4.20% \n\n\n\n\n\n\n\nwithout volatility adjustment \n3.84% \n3.76% \n4.12% \n4.03% \n\n\n\n\n\n\nHUF\nwith volatility adjustment\n6.92% \n6.93% \n7.39% \n6.55% \n\n\n\n\n\n\n\nwithout volatility adjustment \n6.84% \n6.85% \n7.30% \n6.48% \n\n\n\n\n\n\nBGN \nwith volatility adjustment \n1.94% \n2.58% \n2.83% \n2.19% \n\n\n\n\n\n\n\nwithout volatility adjustment \n1.78% \n2.42% \n2.67% \n2.03% \n\n\n\n\n\n\n2023 \n\n\n\n\n\n\n\n\n\n\n\nEUR\nwith volatility adjustment\n3.14%\n2.51%\n2.96%\n2.34%\n\n\n\n\n\n\n\nwithout volatility adjustment \n2.92% \n2.29% \n2.74% \n2.13% \n\n\n\n\n\n\nCZK \nwith volatility adjustment \n4.83% \n3.19% \n3.70% \n3.98% \n\n\n\n\n\n\n\nwithout volatility adjustment \n4.67%\n3.03% \n3.54% \n3.82% \n\n\n\n\n\n\nHUF \nwith volatility adjustment \n5.55% \n5.25% \n6.29% \n5.49% \n\n\n\n\n\n\n\nwithout volatility adjustment \n5.44% \n5.14% \n6.18% \n5.38% \n\n\n\n\n\n\nBGN \nwith volatility adjustment \n3.16% \n2.50% \n3.00% \n2.43% \n\n\n\n\n\n\n\nwithout volatility adjustment \n2.84% \n2.18%\n2.68% \n2.11% \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\n\n\n\n\nNote 5.6.2: Movements in Life insurance contract liabilities \n\n\n\n\n(in millions of EUR) \nLiabilities for remaining coverage \nLiabilities for incurred claims \nTotal \n\n\n\n\n\n\n\nExcl. loss \n\nContracts not \nContracts measured under \n\n\n\n\n\n\n\n\ncomponent \nLoss component \nmeasured \n\nPAA \n\n\n\n\n\n\n\n\n\n\nunder PAA \n\n\n\n\n\n\n\n\n\n\n\n\n\nPresent value \nRisk \n\n\n\n\n\n\n\n\n\n\n\nof future \nadjustment \n\n\n\n\n\n\n\n\n\n\n\ncashflows \n\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance \n13 667 \n7 \n134 \n50 \n3 \n13 862 \n\n\n\n\n\n\nInsurance service result \n-435 \n 24 \n 225 \n 19 \n 0 \n-168 \n\n\n\n\n\n\nInsurance revenues \n-463 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-463 \n\n\n\n\n\n\nBBA + VFA by transition method \n-432 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-432 \n\n\n\n\n\n\nModified retrospective approach \n-9 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-9 \n\n\n\n\n\n\nFair value approach \n-280 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-280 \n\n\n\n\n\n\nOther \n-143 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-143 \n\n\n\n\n\n\nPAA \n-31 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-31 \n\n\n\n\n\n\nInsurance service expenses \n 28 \n 24 \n 225\n 19 \n 0 \n 296 \n\n\n\n\n\n\nIncurred claims (excl. repayments of investment components) \n\u2014 \n-2 \n 156 \n 14 \n 1 \n 169 \n\n\n\n\n\n\nIncurred costs other than claims \n 0 \n-2 \n 99 \n 3 \n 0 \n 100 \n\n\n\n\n\n\nAmortised acquisition expenses \n 28 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n 28 \n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to future service \u2013 loss on \n\u2014 \n 28 \n\u2014 \n\u2014 \n\u2014 \n 28 \n\n\n\n\n\n\nand reversal of loss on onerous contracts \n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to past service \n\u2014 \n\u2014 \n-29 \n 1 \n-1 \n-29 \n\n\n\n\n\n\nInvestment components \n-2 591 \n\u2014 \n2 591 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nInvestment result \n 6 \n 0 \n\u2014 \n\u2014 \n\u2014 \n 6 \n\n\n\n\n\n\nNet result from financial instruments at fair value through profit or loss\n 6 \n 0 \n\u2014 \n\u2014 \n\u2014 \n 6 \n\n\n\n\n\n\nInsurance finance income and expense \n 490 \n 1 \n 2 \n 2 \n 0 \n 495 \n\n\n\n\n\n\nIn P&L \n 292 \n 1 \n 2 \n 1 \n 0 \n 296 \n\n\n\n\n\n\nIn OCI \n 198 \n 0 \n 0 \n 1 \n 0 \n 199 \n\n\n\n\n\n\nTotal changes in comprehensive income \n-2 529 \n 25 \n2 818 \n 20 \n 0 \n 334 \n\n\n\n\n\n\nTotal cashflows \n2 585 \n\u2014 \n-2 798 \n-19 \n\u2014 \n-232 \n\n\n\n\n\n\nPremiums received\n2 712 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n2 712 \n\n\n\n\n\n\nClaims paid \n\u2014 \n\u2014 \n-2 699 \n-16 \n\u2014 \n-2 715 \n\n\n\n\n\n\nCosts other than claims paid \n\u2014 \n\u2014 \n-99 \n-3 \n\u2014 \n-102 \n\n\n\n\n\n\nAcquisition costs paid \n-127 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-127 \n\n\n\n\n\n\nOther \n-37 \n 0 \n-2 \n 0 \n 0 \n-39 \n\n\n\n\n\n\nClosing balance \n13 686 \n 32 \n 152 \n 52 \n 4 \n13 925 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance\n13 258 \n10\n126\n47\n3\n13 444\n\n\n\n\n\n\nInsurance service result \n-381 \n-2 \n218 \n16 \n1 \n-149 \n\n\n\n\n\n\nInsurance revenues\n-399\n\u2013\n\u2013\n\u2013\n\u2013\n-399\n\n\n\n\n\n\nBBA + VFA by transition method\n-370\n\u2013\n\u2013\n\u2013\n\u2013\n-370\n\n\n\n\n\n\nModified retrospective approach\n-10\n\u2013\n\u2013\n\u2013\n\u2013\n-10\n\n\n\n\n\n\nFair value approach\n-267\n\u2013\n\u2013\n\u2013\n\u2013\n-267\n\n\n\n\n\n\nOther\n-93\n\u2013\n\u2013\n\u2013\n\u2013\n-93\n\n\n\n\n\n\nPAA \n-30\n\u2013\n\u2013\n\u2013\n\u2013\n-30\n\n\n\n\n\n\nInsurance service expenses \n19\n-2\n218\n16\n1\n251\n\n\n\n\n\n\nIncurred claims (excl. repayments of investment components)\n\u2013\n-1\n156\n13\n1\n169\n\n\n\n\n\n\nIncurred costs other than claims\n0\n-7\n92\n2\n\u2013\n87\n\n\n\n\n\n\nAmortised acquisition expenses\n19\n\u2013\n\u2013\n\u2013\n\u2013\n19\n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to future service \u2013 loss on \n\u2013\n6\n\u2013\n\u2013\n\u2013\n6\n\n\n\n\n\n\nand reversal of loss on onerous contracts\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to past service\n\u2013\n\u2013\n-30\n1\n1\n-30\n\n\n\n\n\n\nInvestment components \n-1 284 \n\u2013 \n1 284 \n\u2013 \n\u2013 \n0 \n\n\n\n\n\n\nInvestment result \n0 \n 0 \n\u2014 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nNet result from financial instruments at fair value through profit or loss\n 0\n 0\n\u2014\n\u2014\n\u2014\n 0\n\n\n\n\n\n\nInsurance finance income and expense \n815 \n0 \n3 \n3 \n0 \n821 \n\n\n\n\n\n\nIn P&L\n281\n0\n1\n0\n0\n283\n\n\n\n\n\n\nIn OCI\n534\n0\n2\n3\n0\n538\n\n\n\n\n\n\nTotal changes in comprehensive income\n-850\n-2\n1 505\n19\n1\n672\n\n\n\n\n\n\nTotal cashflows \n1 271 \n\u2013 \n-1 497 \n-16 \n\u2013 \n-242 \n\n\n\n\n\n\nPremiums received\n1 401 \n\u2013 \n\u2013 \n\u2013 \n\u2013 \n1 401 \n\n\n\n\n\n\nClaims paid\n\u2013 \n\u2013 \n-1 404 \n-14 \n\u2013 \n-1 419 \n\n\n\n\n\n\nCosts other than claims paid\n\u2013\n\u2013\n-92\n-2\n\u2013\n-94\n\n\n\n\n\n\nAcquisition costs paid\n-130\n\u2013\n\u2013\n\u2013\n\u2013\n-130\n\n\n\n\n\n\nOther \n-12\n0\n0\n0\n0\n-13\n\n\n\n\n\n\nClosing balance \n13 667 \n7 \n134 \n50 \n3 \n13 862 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\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 In the transition from IFRS 4 to IFRS 17 on 1 January 2022, KBC applied the Full Retrospective Approach (FRA) for recent years. \nApplying the FRA for non-recent years was impracticable due to either a lack of historical data (data and hypotheses) or high \ncosts associated with making information from the past available for FRA transition calculations. Where the FRA was \nimpracticable, the Fair Value Approach (FVA) was predominantly used to determine the CSM on the transition date. The \nModified Retrospective Approach (MRA) was rarely applied as this transition approach was overly complex and the costs did \nnot outweigh the benefits. KBC calculated a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently \nadjusted a few assumptions or parameters. The adjustments related to the inclusion in the IFRS 13 fair value of total expenses, \ni.e. including non-directly attributable expenses, and to the inclusion of a risk premium that covers not only non-financial risk, \nbut also system and integration expenses and capital funding costs. All past years were combined into a single cohort for the \nFVA transition calculations. The FVA CSM ensued from cost and risk margin differences under IFRS 17 and IFRS 13 measurement \napproaches. Due to the application of the FVA on the transition date in accordance with the transition exemptions provided \nin IFRS 17, the OCI amount was set at nil. \n\u2022 Movement in insurance liabilities in 2024: \n- Due to the further decrease in market interest rates during 2024, an expense in OCI of 199 million euros before tax is \nrecognised as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance \nincome and expense between P&L and OCI. \n- The movement in the investment component of 2 591 million euros from LRC to LIC indicates the amounts of contracts \ncoming at maturity or lapsed and includes 866 million euros resulting from the surrender in 2024 of individual pension \nagreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the \npolicyholders of the relevant contracts were given the opportunity to invest in unit-linked products. \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 \nas KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income \nand 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 \ncoming 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 \nthey 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 \nlatter is only applied within Central and Eastern European entities for unit-linked contracts or hybrid products as these sold \ncontracts mandatorily contain insurance risk cover. \n\u2022 Some insurance contracts may specify amounts that are payable when no insured event occurs, and are repayable under all \ncircumstances and as such include an investment component. For defining the investment component, an investigation based \non the contract\u2019s characteristics needs to be conducted. Within KBC, only investment components are identified within Life \ninsurance, such as life-long death cover. When an insurance contract allows surrender, the gross surrender value is considered \nan investment component. Any associated surrender fees resulting from surrender are considered insurance components. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.6.3: Movements in Non-life insurance contract liabilities \n\n\n\n\n(in millions of EUR) \nLiabilities for remaining coverage \nLiabilities for incurred claims \nTotal \n\n\n\n\n\n\n\nExcl. loss \n\nContracts not \nContracts measured under \n\n\n\n\n\n\n\n\ncomponent \nLoss component \nmeasured under \n\nPAA \n\n\n\n\n\n\n\n\n\n\nPAA \n\n\n\n\n\n\n\n\n\n\n\n\n\nPresent value \nRisk \n\n\n\n\n\n\n\n\n\n\n\nof future \nadjustment \n\n\n\n\n\n\n\n\n\n\n\ncashflows \n\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance \n 700 \n 1 \n 16 \n1 964 \n 240 \n2 922 \n\n\n\n\n\n\nInsurance service result \n-1 952 \n 3 \n 31 \n1 606 \n 10 \n-303 \n\n\n\n\n\n\nInsurance revenues \n-2 482 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-2 482 \n\n\n\n\n\n\nBBA by transition method \n-39 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-39 \n\n\n\n\n\n\nModified retrospective approach \n 0 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nFair value approach \n-29 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-29 \n\n\n\n\n\n\nOther \n-11 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-11 \n\n\n\n\n\n\nPAA \n-2 443 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-2 443 \n\n\n\n\n\n\nInsurance service expenses \n 530 \n 3 \n 31 \n1 606 \n 10 \n2 179 \n\n\n\n\n\n\nIncurred claims (excl. repayments of investment components) \n\u2014 \n-1 \n 28 \n1 251 \n 65 \n1 343 \n\n\n\n\n\n\nIncurred costs other than claims \n 0 \n 0 \n 3 \n 232 \n 0 \n 236 \n\n\n\n\n\n\nAmortised acquisition expenses \n 529 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n 529 \n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to future service \u2013 loss \n\u2014 \n 4 \n\u2014 \n\u2014 \n\u2014 \n 4 \n\n\n\n\n\n\non and reversal of loss on onerous contracts \n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to past service \n\u2014 \n\u2014 \n 0 \n 122 \n-55 \n 66 \n\n\n\n\n\n\nInvestment components \n 0 \n\u2014 \n 0 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nInsurance finance income and expense \n 7 \n 0 \n 0 \n 58 \n 7 \n 72 \n\n\n\n\n\n\nIn P&L \n 1 \n 0 \n 0 \n 39 \n 5 \n 45 \n\n\n\n\n\n\nIn OCI \n 6 \n 0 \n 0 \n 18 \n 2 \n 26 \n\n\n\n\n\n\nTotal changes in comprehensive income \n-1 945 \n 3 \n 31 \n1 664 \n 17 \n-231 \n\n\n\n\n\n\nTotal cashflows \n1 991 \n\u2014 \n-29 \n-1 453 \n\u2014 \n 509 \n\n\n\n\n\n\nPremiums received\n2 532 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n2 532 \n\n\n\n\n\n\nClaims paid \n\u2014 \n\u2014 \n-26 \n-1 222 \n\u2014 \n-1 248 \n\n\n\n\n\n\nCosts other than claims paid \n\u2014 \n\u2014 \n-3 \n-231 \n\u2014 \n-234 \n\n\n\n\n\n\nAcquisition costs paid \n-540 \n\u2014 \n\u2014 \n\u2014 \n\u2014 \n-540 \n\n\n\n\n\n\nOther \n-6 \n 0 \n 0 \n-6 \n-1 \n-14 \n\n\n\n\n\n\nClosing balance \n 740 \n 4 \n 18\n2 168 \n 256 \n3 186 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance\n675\n1\n14\n1 802\n222\n2 714\n\n\n\n\n\n\nInsurance service result \n-1 789 \n0 \n28 \n1 343 \n7 \n-410 \n\n\n\n\n\n\nInsurance revenues\n-2 280\n\u2013\n\u2013\n\u2013\n\u2013\n-2 280\n\n\n\n\n\n\nBBA by transition method\n-36\n\u2013\n\u2013\n\u2013\n\u2013\n-36\n\n\n\n\n\n\nModified retrospective approach \n0\n\u2013\n\u2013\n\u2013\n\u2013\n0\n\n\n\n\n\n\nFair value approach\n-29\n\u2013\n\u2013\n\u2013\n\u2013\n-29\n\n\n\n\n\n\nOther\n-7\n\u2013\n\u2013\n\u2013\n\u2013\n-7\n\n\n\n\n\n\nPAA\n-2 244\n\u2013\n\u2013\n\u2013\n\u2013\n-2 244\n\n\n\n\n\n\nInsurance service expenses \n491 \n0 \n28 \n1 343 \n7 \n1 869 \n\n\n\n\n\n\nIncurred claims (excl. repayments of investment components)\n0\n-1\n26\n1 091\n62\n1 178 \n\n\n\n\n\n\nIncurred costs other than claims\n1\n0\n3\n219\n0\n223 \n\n\n\n\n\n\nAmortised acquisition expenses \n490\n\u2013\n\u2013\n\u2013\n\u2013\n490 \n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to future service \u2013 loss \n\u2013\n1\n\u2013\n\u2013\n\u2013\n1 \n\n\n\n\n\n\non and reversal of loss on onerous contracts\n\n\n\n\n\n\n\n\n\n\n\n\nChanges in fulfilment cashflows that relate to past service\n\u2013\n\u2013\n0\n33\n-55\n-22 \n\n\n\n\n\n\nInvestment components \n0 \n\u2013 \n0 \n\u2013 \n\u2013 \n0 \n\n\n\n\n\n\nInsurance finance income and expense \n-48 \n0 \n1 \n89 \n12 \n54 \n\n\n\n\n\n\nIn P&L\n0\n0\n0\n27\n4\n30 \n\n\n\n\n\n\nIn OCI\n-48\n0\n0\n63\n8\n24 \n\n\n\n\n\n\nTotal changes in comprehensive income \n-1 837 \n0 \n29 \n1 433 \n19 \n-356 \n\n\n\n\n\n\nTotal cashflows \n1 862 \n\u2013 \n-27 \n-1 288 \n\u2013 \n547 \n\n\n\n\n\n\nPremiums received\n2 357\n\u2013\n\u2013\n\u2013\n\u2013\n2 357 \n\n\n\n\n\n\nClaims paid\n\u2013\n\u2013\n-24\n-1 070\n\u2013\n-1 094 \n\n\n\n\n\n\nCosts other than claims paid\n\u2013\n\u2013\n-3\n-218\n\u2013\n-221 \n\n\n\n\n\n\nAcquisition costs paid\n-496\n\u2013\n\u2013\n\u2013\n\u2013\n-496 \n\n\n\n\n\n\nOther \n1\n0\n0\n17\n0\n18\n\n\n\n\n\n\nClosing balance \n700 \n1 \n16 \n1 964 \n240 \n2 922 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\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 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. \nThese methods extrapolate the development of paid and incurred losses, average costs per claim (including claims handling \ncosts) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims \nare 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 \ncosts. \n\u2022 No asset for insurance acquisition cashflows is currently recognised. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.6.4: Movements in Life insurance contract liability components (BBA, VFA) \n\n\n\n\n\nPresent value \n\n\n\n\n\n\n\n\n\n\n\n\nof future \nRisk \n\n\n\nTotal insurance \n\n\n\n\n\n\n\ncashflows \nadjustment \n\n\n\ncontract \n\n\n\n\n\n\n(in millions of EUR) \n(incl. LIC) \n(incl. LIC) \nContractual service margin \nliabilities \n\n\n\n\n\n\n\n\n\nInsurance \n\n\n\n\n\n\n\n\n\n\n\n\ncontracts that \nInsurance \n\n\n\n\n\n\n\n\n\n\n\nexisted at the \ncontracts that \n\n\n\n\n\n\n\n\n\n\n\ntransition date, \nexisted at the \n\n\n\n\n\n\n\n\n\n\n\nmodified \ntransition date, \nOther \n\n\n\n\n\n\n\n\n\n\nretrospective \nfair value \ninsurance \n\n\n\n\n\n\n\n\n\n\napproach \napproach \ncontracts \n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance \n11 538 \n152 \n47 \n1 387 \n683 \n13 807 \n\n\n\n\n\n\nInsurance service result \n-212 \n 41 \n-2 \n-125 \n 138 \n-159 \n\n\n\n\n\n\nChanges that relate to future service \n-201 \n 53 \n 4 \n-11 \n 182 \n 28 \n\n\n\n\n\n\nNew business \n-245\n 29\n\u2013\n\u2013\n 230\n 14\n\n\n\n\n\n\nChanges in estimates reflected in the CSM \n 32\n 23\n 4\n-11\n-48\n 0\n\n\n\n\n\n\nChanges in estimates that result in onerous contract \n 13\n 1\n\u2013\n\u2013\n\u2013\n 14\n\n\n\n\n\n\nlosses and reversals \n\n\n\n\n\n\n\n\n\n\n\n\nChanges that relate to current service \n 16 \n-9 \n-5 \n-114 \n-44 \n-157 \n\n\n\n\n\n\nCSM recognised in P&L \n0\n-\n-5\n-114\n-44\n-163\n\n\n\n\n\n\nChanges in the risk adjustment (expected) \n0\n-9\n\u2013\n\u2013\n\u2013\n-9\n\n\n\n\n\n\nExperience adjustments \n 16\n-\n\u2013\n\u2013\n\u2013\n 16\n\n\n\n\n\n\nChanges to liabilities for incurred claims related to past \n-27 \n-3 \n\u2013 \n\u2013 \n\u2013 \n-29 \n\n\n\n\n\n\nservice \n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result \n 6 \n- \n\u2013 \n\u2013 \n\u2013 \n 6 \n\n\n\n\n\n\nNet result from financial instruments at fair value through P&L\n 6\n-\n\u2013\n\u2013\n\u2013\n 6\n\n\n\n\n\n\nInsurance finance income and expense \n 466 \n 4 \n 1 \n 10 \n 13 \n 493 \n\n\n\n\n\n\nIn P&L \n 269\n 3\n 1\n 10\n 13\n 295\n\n\n\n\n\n\nIn OCI \n 197\n 1\n-\n-\n-\n 198\n\n\n\n\n\n\nTotal changes in comprehensive income \n 260 \n 44 \n-1 \n-115 \n 151 \n 341 \n\n\n\n\n\n\nTotal cashflows \n-241\n\u2013 \n\u2013 \n\u2013 \n\u2013 \n-241 \n\n\n\n\n\n\nPremiums received \n2 681\n\u2013\n\u2013\n\u2013\n\u2013\n2 681\n\n\n\n\n\n\nClaims paid \n-2 699\n\u2013\n\u2013\n\u2013\n\u2013\n-2 699\n\n\n\n\n\n\nCosts other than claims paid \n-99\n\u2013\n\u2013\n\u2013\n\u2013\n-99\n\n\n\n\n\n\nAcquisition costs paid \n-124\n\u2013\n\u2013\n\u2013\n\u2013\n-124\n\n\n\n\n\n\nOther changes \n-28 \n-1 \n-3 \n-4 \n-3 \n-39 \n\n\n\n\n\n\nClosing balance \n11 529 \n 195 \n 43 \n1 268 \n 832 \n13 868 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\nOpening balance\n11 378\n112\n45\n1 377\n480\n13 393 \n\n\n\n\n\n\nInsurance service result \n-390 \n47 \n-1 \n8 \n198 \n-139 \n\n\n\n\n\n\nChanges that relate to future service \n-399 \n56 \n4 \n120 \n224 \n5 \n\n\n\n\n\n\nNew business\n-161\n17\n\u2013\n\u2013\n150\n6\n\n\n\n\n\n\nChanges in estimates reflected in the CSM\n-238\n39\n4\n120\n74\n-1\n\n\n\n\n\n\nChanges in estimates that result in onerous contract \n0\n0\n\u2013\n\u2013\n\u2013\n0\n\n\n\n\n\n\nlosses and reversals\n\n\n\n\n\n\n\n\n\n\n\n\nChanges that relate to current service\n38\n-8\n-5\n-113\n-26\n-113\n\n\n\n\n\n\nCSM recognised in P&L\n0\n\u2013\n-5\n-113\n-26\n-143\n\n\n\n\n\n\nChanges in the risk adjustment (expected)\n0\n-8\n\u2013\n\u2013\n\u2013\n-8\n\n\n\n\n\n\nExperience adjustments\n38\n\u2013\n\u2013\n\u2013\n\u2013\n38\n\n\n\n\n\n\nChanges to liabilities for incurred claims related to past \n-29\n-2\n\u2013\n\u2013\n\u2013\n-30\n\n\n\n\n\n\nservice \n\n\n\n\n\n\n\n\n\n\n\n\nInvestment result \n0 \n\u2013 \n\u2013 \n\u2013 \n\u2013 \n0 \n\n\n\n\n\n\nNet result from financial instruments at fair value through P&L\n0\n\u2013\n\u2013\n\u2013\n\u2013\n0\n\n\n\n\n\n\nInsurance finance income and expense \n809 \n-7 \n1 \n9 \n7 \n818 \n\n\n\n\n\n\nIn P&L\n264\n2\n1\n9\n7\n283\n\n\n\n\n\n\nIn OCI\n544\n-9\n\u2013\n\u2013\n\u2013\n535\n\n\n\n\n\n\nTotal changes in comprehensive income \n418 \n40 \n0 \n16 \n205 \n679 \n\n\n\n\n\n\nTotal cashflows \n-252 \n\u2013 \n\u2013 \n\u2013 \n\u2013 \n-252 \n\n\n\n\n\n\nPremiums received\n1 371\n\u2013\n\u2013\n\u2013\n\u2013\n1 371\n\n\n\n\n\n\nClaims paid\n-1 404\n\u2013\n\u2013\n\u2013\n\u2013\n-1 404\n\n\n\n\n\n\nCosts other than claims paid\n-92\n\u2013\n\u2013\n\u2013\n\u2013\n-92\n\n\n\n\n\n\nAcquisition costs paid\n-126\n\u2013\n\u2013\n\u2013\n\u2013\n-126\n\n\n\n\n\n\nOther changes \n-7 \n-1 \n2 \n-6 \n-1 \n-14 \n\n\n\n\n\n\nClosing balance \n11 538 \n152 \n47 \n1 387 \n683 \n13 807 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\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 amount recognised in P&L as release of the CSM is determined by: \n \n- Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by \nthe insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity \nof the benefits provided to the policyholder under a contract and its expected coverage period. \n- Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected \nto be provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current \nperiod. \n\u2022 Main movements in 2024 and 2023: the 43-million-euro increase in the risk adjustment in 2024 is mostly related to a model \nchange to take into account the risk that clients stop paying premiums for long-term life insurance contracts. The movement \nof the contractual service margin in 2024, under \u2018New business\u2019, includes a 96-million-euro increase related to the migration \nof individual pension agreements from the \u2018Risk and Savings\u2019 portfolio to the \u2018Hybrid products\u2019 portfolio (see also Note 5.6.2). \nThere were no material changes in 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\nNote 5.6.5: Movements in Non-life insurance contract liability components (BBA) \n\n\n\n\n\nPresent value \n\n\n\n\n\n\n\n\n\n\n\nof future \nRisk \n\n\n\n\n\n\n\n\n\n\ncashflows \nadjustment \n\n\nTotal insurance \n\n\n\n\n\n\n(in millions of EUR) \n(incl. LIC) \n(incl. LIC) \nContractual service margin \ncontract liabilities \n\n\n\n\n\n\n\n\n\nInsurance contracts that \n\n\n\n\n\n\n\n\n\n\n\nexisted at the transition \nOther insurance \n\n\n\n\n\n\n\n\n\n\ndate, fair value approach \ncontracts \n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\nOpening balance \n8 \n71 \n52 \n74 \n206 \n\n\n\n\n\n\nInsurance service result \n-72 \n 60 \n-21 \n 26 \n-7 \n\n\n\n\n\n\nChanges that relate to future service \n-74 \n 62 \n-19 \n 31 \n 0 \n\n\n\n\n\n\nNew business \n-21 \n 3 \n\u2014 \n 18 \n 0 \n\n\n\n\n\n\nChanges in estimates reflected in the CSM \n-52 \n 58 \n-19 \n 13 \n 0 \n\n\n\n\n\n\nChanges in estimates that result in onerous contract \n 0 \n 0 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nlosses and reversals \n\n\n\n\n\n\n\n\n\n\n\nChanges that relate to current service \n 1 \n-1 \n-2 \n-5 \n-7 \n\n\n\n\n\n\nCSM recognised in P&L \n\u2014 \n\u2014 \n-2 \n-5 \n-7 \n\n\n\n\n\n\nChanges in the risk adjustment (expected) \n\u2014 \n-1 \n\u2014 \n\u2014 \n-1 \n\n\n\n\n\n\nExperience adjustments \n 1 \n\u2014 \n\u2014 \n\u2014 \n 1 \n\n\n\n\n\n\nChanges to liabilities for incurred claims related to past \n 0 \n 0 \n\u2014 \n\u2014 \n 0 \n\n\n\n\n\n\nservice \n\n\n\n\n\n\n\n\n\n\n\nInsurance finance income and expense \n 15 \n-9 \n 0 \n 1 \n 7 \n\n\n\n\n\n\nIn P&L \n-1 \n 1 \n 0 \n 1 \n 1 \n\n\n\n\n\n\nIn OCI \n 16 \n-10 \n\u2014 \n\u2014 \n 6 \n\n\n\n\n\n\nTotal changes in comprehensive income \n-57 \n 51 \n-21 \n 27 \n-1 \n\n\n\n\n\n\nTotal cashflows \n 9 \n\u2014 \n\u2014 \n\u2014 \n 9 \n\n\n\n\n\n\nPremiums received \n 46 \n\u2014 \n\u2014 \n\u2014 \n 46 \n\n\n\n\n\n\nClaims paid \n-26 \n\u2014 \n\u2014 \n\u2014 \n-26 \n\n\n\n\n\n\nCosts other than claims paid \n-3 \n\u2014 \n\u2014 \n\u2014 \n-3 \n\n\n\n\n\n\nAcquisition costs paid \n-8 \n\u2014 \n\u2014 \n\u2014 \n-8 \n\n\n\n\n\n\nOther changes \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nClosing balance \n-40 \n 122 \n 31 \n 101 \n 214 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\nOpening balance\n17\n75\n93\n67\n252 \n\n\n\n\n\n\nInsurance service result \n11 \n16 \n-41 \n7 \n-7 \n\n\n\n\n\n\nChanges that relate to future service \n9 \n19 \n-38 \n10 \n0 \n\n\n\n\n\n\nNew business\n-18\n1\n\u2013\n17\n0 \n\n\n\n\n\n\nChanges in estimates reflected in the CSM\n27\n17\n-38\n-7\n0 \n\n\n\n\n\n\nChanges in estimates that result in onerous contract \n0\n0\n\u2013\n\u2013\n0 \n\n\n\n\n\n\nlosses and reversals\n\n\n\n\n\n\n\n\n\n\n\nChanges that relate to current service \n2 \n-3 \n-3 \n-4 \n-7 \n\n\n\n\n\n\nCSM recognised in P&L\n\u2013\n\u2013\n-3\n-4\n-6 \n\n\n\n\n\n\nChanges in the risk adjustment (expected)\n\u2013\n-3\n\u2013\n\u2013\n-3 \n\n\n\n\n\n\nExperience adjustments\n2\n\u2013\n\u2013\n\u2013\n2 \n\n\n\n\n\n\nChanges to liabilities for incurred claims related to past \n0\n0\n\u2013\n\u2013\n0\n\n\n\n\n\n\nservice \n\n\n\n\n\n\n\n\n\n\n\nInsurance finance income and expense \n-29 \n-19 \n0 \n1 \n-48 \n\n\n\n\n\n\nIn P&L\n0\n0\n0\n1\n0 \n\n\n\n\n\n\nIn OCI\n-28\n-19\n\u2013\n\u2013\n-48 \n\n\n\n\n\n\nTotal changes in comprehensive income \n-17 \n-4 \n-41 \n7 \n-54\n\n\n\n\n\n\nTotal cashflows \n8 \n\u2013 \n\u2013 \n\u2013 \n8 \n\n\n\n\n\n\nPremiums received\n43\n\u2013\n\u2013\n\u2013\n43 \n\n\n\n\n\n\nClaims paid\n-24\n\u2013\n\u2013\n\u2013\n-24 \n\n\n\n\n\n\nCosts other than claims paid\n-3\n\u2013\n\u2013\n\u2013\n-3 \n\n\n\n\n\n\nAcquisition costs paid\n-7\n\u2013\n\u2013\n\u2013\n-7 \n\n\n\n\n\n\nOther changes \n0 \n0 \n0 \n0 \n0 \n\n\n\n\n\n\nClosing balance \n8 \n71 \n52 \n74 \n206 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 \nthe increase in the discount curve in the long term (more than 20 years). The 6-million-euro increase in 2024 is attributable to \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\na slight decline in the yield curve. A typical feature of the hospitalisation portfolio is that interest rate movements have a \ngreater impact on the cash outflows than on the cash inflows. Hospitalisation premiums are levelled (constant \u2018cash in\u2019 during \nthe lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019 more towards the end of the contract). \n\u2022 The 52-million-euro drop in the present value of future cashflows for changes in estimates reflected in the CSM in 2024 is due \nto a model update in which expected higher claims result in higher premiums. A higher premium volume generates more future \nprofit and, as a result, lower fulfilment cashflows. The 58-million-euro increase in changes in estimates reflected in the CSM in \nthe risk adjustment in 2024 was accounted for by a model change involving a more conservative estimate of the uncertainty \nof claim costs related to hospitalisation. \n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.6.6: New business (BBA/VFA) \n\n\n\n\n(in millions of EUR) \n(Re)insurance contracts issued \n(Re)insurance contracts acquired \nTotal \n\n\n\n\n\n\n\nNot onerous \nOnerous\nNot onerous\nOnerous\n\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\nEstimates of present value of cash outflows \n2 942 \n 625 \n 0 \n 0 \n3 567 \n\n\n\n\n\n\nExpected claims \n2 645 \n 593 \n 0 \n 0 \n3 238 \n\n\n\n\n\n\nExpected other insurance service expenses \n 151 \n 19 \n 0 \n 0 \n 170 \n\n\n\n\n\n\nInsurance acquisition cashflows \n 145 \n 13 \n 0 \n 0 \n 159 \n\n\n\n\n\n\nEstimates of present value of cash inflows \n-3 218 \n-614 \n 0 \n 0 \n-3 833 \n\n\n\n\n\n\nRisk adjustment for non-financial risk \n 29 \n 3 \n 0 \n 0 \n 32 \n\n\n\n\n\n\nContractual service margin \n 248 \n\u2014 \n 0 \n\u2014 \n 248 \n\n\n\n\n\n\nIncrease in insurance contract liabilities: loss component \n\u2014 \n 14 \n\u2014 \n 0 \n 14 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\nEstimates of present value of cash outflows \n1 194 \n212 \n0 \n0 \n1 406 \n\n\n\n\n\n\nExpected claims\n1 034\n171\n0\n0\n1 205\n\n\n\n\n\n\nExpected other insurance service expenses\n63\n19\n0\n0\n82\n\n\n\n\n\n\nInsurance acquisition cashflows\n97\n22\n0\n0\n119\n\n\n\n\n\n\nEstimates of present value of cash inflows \n-1 378 \n-207 \n0 \n0 \n-1 585 \n\n\n\n\n\n\nRisk adjustment for non-financial risk \n16 \n2 \n0 \n0 \n18 \n\n\n\n\n\n\nContractual service margin \n166 \n- \n0 \n0 \n166 \n\n\n\n\n\n\nIncrease in insurance contract liabilities: loss component \n\u2013 \n7 \n\u2013 \n0 \n7 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 \u2018Estimates of present value of cash outflows\u2019 includes 866 million euros resulting from the surrender in 2024 of individual pension \nagreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the \npolicyholders of the relevant contracts were given the opportunity to invest in unit-linked products. The net impact of this \nmigration on the CSM is a 96-million-euro increase (see also Note 5.6.2). \n\u2022 The sale of business with a loss component in 2024 was largely attributable to commercial campaigns in response to the \nBelgian state note maturing in September 2024. This new business was created with a market-driven competitive guaranteed \ninterest rate (see also Note 4.1). \n\n\n\n\n\n\n\n\n\n\n\nNote 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (BBA/VFA) \n\n\n\n\n\n\n\n\nCSM recognition in P&L in the \u2026 following reporting year \n\n\n\n\n\n\n(in millions of EUR) \n1st year \n2nd year \n3rd year \n4th year \n5th year \n6-10th year \n+10th year \n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\n\n\nLife \n 153 \n 145 \n 138 \n 132 \n 126 \n 548 \n1 023 \n\n\n\n\n\n\nNon-life \n 7 \n 7 \n 7 \n 6 \n 6 \n 27 \n 57 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\n\n\nLife \n149 \n142 \n135 \n129 \n122 \n529 \n973 \n\n\n\n\n\n\nNon-life \n6 \n6 \n6 \n6 \n5 \n24 \n51 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u2022 The table shows the future CSM recognition for the next 25 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\nNote 5.6.8: Fair value of assets backing insurance and investment contracts \n\n\n\n\n\n\nOf which Life \n\n\n\n\n\n\n\n\n\n\n\ndirect \n\n\n\n\n\n\n\n\n\n\n\nparticipation\n\n\n\n\n\n\n\n\n\n(in millions of EUR) \nLife \n(VFA) \nNon-life\nNon-technical\nTotal\n\n\n\n\n\n\n2024\n\n\n\n\n\n\n\n\n\n\n\nTotal (underlying) assets \n30 414 \n 967 \n4 204 \n1 845 \n36 463 \n\n\n\n\n\n\nAt amortised cost \n1 886 \n 0 \n2 887 \n1 047 \n5 819 \n\n\n\n\n\n\nAt FVOCI \n11 753 \n 15 \n1 221 \n 593 \n13 568 \n\n\n\n\n\n\nDebt securities \n10 698\n 15 \n 993 \n 373 \n12 064 \n\n\n\n\n\n\nEquity instruments \n1 055 \n 0 \n 228 \n 220 \n1 504 \n\n\n\n\n\n\nAt FVPL (excl. derivatives) \n16 666 \n 951 \n 0 \n 8 \n16 673 \n\n\n\n\n\n\nInstruments backing unit-linked contracts \n16 602 \n 951 \n\u2014 \n\u2014 \n16 602 \n\n\n\n\n\n\nOther \n 64 \n 0 \n 0 \n 8 \n 71 \n\n\n\n\n\n\nAt FVO \n 0 \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nProperty and equipment and investment property \n 109 \n 0 \n 97 \n 198 \n 403 \n\n\n\n\n\n\n2023\n\n\n\n\n\n\n\n\n\n\n\nTotal (underlying) assets \n27 930 \n928 \n4 152 \n1 686 \n33 769 \n\n\n\n\n\n\nAt amortised cost \n1 949\n0 \n2 926 \n882 \n5 757 \n\n\n\n\n\n\nAt FVOCI \n11 490 \n15 \n1 158 \n590 \n13 238 \n\n\n\n\n\n\nDebt securities \n10 441 \n15 \n933 \n386 \n11 759 \n\n\n\n\n\n\nEquity instruments\n1 050 \n0 \n225 \n204 \n1 479 \n\n\n\n\n\n\nAt FVPL (excl. derivatives) \n14 364 \n913 \n0 \n8 \n14 372 \n\n\n\n\n\n\nInstruments backing unit-linked contracts\n14 348 \n912 \n\u2013\n\u2013\n14 348 \n\n\n\n\n\n\nOther\n16 \n1 \n0 \n8 \n24 \n\n\n\n\n\n\nAt FVO \n0 \n0 \n0 \n0 \n0 \n\n\n\n\n\n\nProperty and equipment and investment property \n127 \n0 \n68 \n207 \n401 \n\n\n\n\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 also includes the assets backing the liabilities under investment contracts (IFRS 9). \nNote 5.6.9: Changes in accumulated OCI for FVOCI assets related to insurance contracts for which the fair value transition \napproach is used \n\n\n\n\n(in millions of EUR) \n2024\n2023\n\n\n\n\n\n\nOCI that may be recycled to P&L \n-26 \n340 \n\n\n\n\n\n\nNet change in revaluation reserve (FVOCI debt instruments) \n-26 \n340 \n\n\n\n\n\n\nFair value adjustments before tax \n-33 \n446 \n\n\n\n\n\n\nDeferred tax on fair value changes \n 9 \n-108 \n\n\n\n\n\n\nTransfer from reserve to net result \n-1 \n2 \n\n\n\n\n\n\nImpairment \n-2 \n2 \n\n\n\n\n\n\nNet gains/losses on disposal \n 0 \n0 \n\n\n\n\n\n\nDeferred taxes \n 0 \n-1 \n\n\n\n\n\n\nOCI that will not be recycled to P&L \n 101 \n110 \n\n\n\n\n\n\nNet change in revaluation reserve (FVOCI equity instruments) \n 101 \n110 \n\n\n\n\n\n\nFair value adjustments before tax \n 101 \n110 \n\n\n\n\n\n\nDeferred tax on fair value changes \n 0 \n0 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while \nmaintaining the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between \ncovering financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently \nthe years thereafter until the portfolio subject to the transition approach reaches maturity. \n\u2022 See also \u2018Consolidated statement of comprehensive income\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\nNote 5.7: Provisions for risks and charges \n\nNote 5.7.1: Overview \n\n\n\n\n(in millions of EUR) \n31-12-2024\n31-12-2023\n\n\n\n\n\n\nTotal provisions for risks and charges \n141 \n183 \n\n\n\n\n\n\nProvisions for off-balance-sheet commitments and financial guarantees \n73 \n91 \n\n\n\n\n\n\nProvisions for other risks and charges \n69 \n92 \n\n\n\n\n\n\nProvisions for restructuring \n22 \n37 \n\n\n\n\n\n\nProvisions for taxes and pending legal disputes \n31 \n37 \n\n\n\n\n\n\nOther \n17 \n18 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.7.2: Details of off-balance-sheet commitments and financial guarantees \n\n\n\n\n\n\n\nSubject to \n\n\n\n\n\n\n\n\nSubject to 12-\nSubject to \nlifetime ECL \u2013 \n\n\n\n\n\n\n\n(in millions of EUR) \nmonth ECL\nlifetime ECL \nnon-performing\nTotal\n\n\n\n\n\n\n31-12-2024 \n\n\n\n\n\n\n\n\n\n\nProvisions on 1 January \n 22 \n 20 \n 49 \n 91 \n\n\n\n\n\n\nMovements with an impact on results \n\n\n\n\n\n\n\n\n\n\nTransfer of financial assets \n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n-1 \n 5 \n 2 \n 6 \n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 1 \n-9 \n 3 \n-5 \n\n\n\n\n\n\nStage 3 \u2018non-performing\u2019 (lifetime ECL) \n 0 \n 1 \n-5 \n-4 \n\n\n\n\n\n\nNew financial assets \n 5 \n 1 \n 1 \n 8 \n\n\n\n\n\n\nChanges in risk parameters during the reporting period \n-6 \n-1 \n-13 \n-21 \n\n\n\n\n\n\nChanges in the model or methodology \n 2 \n 0 \n-1 \n 1 \n\n\n\n\n\n\nDerecognised financial assets \n-3 \n-1 \n-2 \n-6 \n\n\n\n\n\n\nOther \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nMovements without an impact on results \n\n\n\n\n\n\n\n\n\n\nDerecognised financial assets \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nChanges in the scope of consolidation \n 0 \n-1 \n 0 \n-1 \n\n\n\n\n\n\nOther \n 2 \n 0 \n 1 \n 3 \n\n\n\n\n\n\nProvisions on 31 December \n 22 \n 15 \n 36 \n 73 \n\n\n\n\n\n\n31-12-2023 \n\n\n\n\n\n\n\n\n\n\nProvisions on 1 January \n19 \n35 \n60 \n114 \n\n\n\n\n\n\nMovements with an impact on results \n\n\n\n\n\n\n\n\n\n\nTransfer of financial assets \n\n\n\n\n\n\n\n\n\n\nStage 1 (12-month ECL) \n-2 \n 3 \n 1 \n 2 \n\n\n\n\n\n\nStage 2 (lifetime ECL) \n 1 \n-13 \n 9 \n-3 \n\n\n\n\n\n\nStage 3 \u2018non-performing\u2019 (lifetime ECL) \n 0 \n 1 \n-2 \n-2 \n\n\n\n\n\n\nNew financial assets \n 10 \n 4 \n 2 \n 16 \n\n\n\n\n\n\nChanges in risk parameters during the reporting period \n-3 \n-6 \n-12 \n-21 \n\n\n\n\n\n\nChanges in the model or methodology \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nDerecognised financial assets \n-3 \n-3 \n-3 \n-9 \n\n\n\n\n\n\nOther \n 0 \n 0 \n 2 \n 2 \n\n\n\n\n\n\nMovements without an impact on results \n\n\n\n\n\n\n\n\n\n\nDerecognised financial assets \n 0 \n 0 \n 0 \n 0 \n\n\n\n\n\n\nChanges in the scope of consolidation \n 0 \n-1 \n 0 \n-1 \n\n\n\n\n\n\nOther \n 0 \n 1 \n-7 \n-7 \n\n\n\n\n\n\nProvisions on 31 December \n 22 \n 20 \n 49 \n 91 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n\u2022 Also see Note 6.1. \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\u2022 Information relating to the main legal disputes pending: claims filed against KBC group companies are \u2013 in keeping with IFRS \nrules \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 \naccounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial \nstatements if such cases might have a material impact on the balance sheet (i.e. when the claim could lead to a possible \noutflow of more than 50 million euros). All other claims (\u2018remotely probable outflow\u2019), of whatever magnitude, that represent a \nminor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is \nlimited in order not to prejudice the position of the group in ongoing litigation. \n\n\n\n- Possible outflow: on 6 October 2011, Irving H. Picard, trustee (the \u2018trustee\u2019) for the liquidation of Bernard L. Madoff \nInvestments Securities LLC (& Bernard L. Madoff), sued KBC Investments Ltd (a full subsidiary of KBC Bank) before the \nbankruptcy court in New York to claw back approximately 110 million US dollars\u2019 worth of transfers made to KBC entities \nby Madoff (through a feeder fund that KBC had lent to Harley International). This claim is just one of a whole set made by \nthe trustee against several banks, hedge funds, feeder funds and investors (\u2018joint defense group\u2019). A lengthy litigation \nprocess 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 \nsubsequent transferees (as is the case for KBC Investments Ltd), as detailed in previous disclosures. In June 2015, the \nTrustee stated his intention to amend the original claim which led to increase the amount claimed to USD 196 000 000. A \ncourt ruling dismissing the claim of the Trustee was issued on 3 March 2017. The Trustee appealed and the appellate court \n(Court of Appeals for the Second Circuit) reversed the dismissal on 28 February 2019. A certiorari petition filed on 30 August \n2019 was dismissed by the US Supreme Court on 2 June 2020. As a consequence the merits of the case are handled by \nthe Bankruptcy Court. On 30 August 2021, in two other appeals by other defendants, the Court of Appeals for the Second \nCircuit reversed the burden of proof from an initial burden on the Trustee to adequately demonstrate the defendant\u2019s lack \nof good faith to a burden on the defendant to prove its good faith. On 1 August 2022, the Bankruptcy Court issued a \ndecision determining the structure of the proceedings. In this context, on 5 August 2022 the Trustee amended his complaint \nby reducing his claim to a principal of USD 86 million. On 18 November 2022, KBC submitted a motion to dismiss the \namended complaint for lack of specific jurisdiction of the US court. On 26 April 2023, the court dismissed this motion \ncontesting jurisdiction. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the \namended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden \nof proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may \nstill 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 5.9: Retirement benefit obligations \n\n\n\n\n(in millions of EUR) \n31-12-2024\n31-12-2023\n\n\n\n\n\n\nDEFINED BENEFIT PLANS \n\n\n\n\n\n\n\n\nReconciliation of defined benefit obligations \n\n\n\n\n\n\n\n\nDefined benefit obligations at the beginning of the period \n 2 724 \n2 580 \n\n\n\n\n\n\nCurrent service cost \n 105 \n95 \n\n\n\n\n\n\nInterest cost \n 89 \n104 \n\n\n\n\n\n\nActuarial gain or loss resulting from changes in demographic assumptions \n 0 \n-3 \n\n\n\n\n\n\nActuarial gain or loss resulting from changes in financial assumptions \n-76 \n152 \n\n\n\n\n\n\nExperience adjustments \n 29 \n-56 \n\n\n\n\n\n\nPast-service cost \n 0 \n0 \n\n\n\n\n\n\nBenefits paid \n-190 \n-149 \n\n\n\n\n\n\nOther \n 3 \n0 \n\n\n\n\n\n\nDefined benefit obligations at the end of the period \n 2 684 \n2 724 \n\n\n\n\n\n\nReconciliation of the fair value of plan assets \n\n\n\n\n\n\n\n\nFair value of plan assets at the beginning of the period \n 2 936 \n2 746 \n\n\n\n\n\n\nActual return on plan assets \n 198 \n222\n\n\n\n\n\n\nExpected interest income on plan assets, calculated based on market yields on high quality corporate bonds \n 96 \n115 \n\n\n\n\n\n\nEmployer contributions \n 97 \n93 \n\n\n\n\n\n\nPlan participant contributions \n 20 \n20 \n\n\n\n\n\n\nBenefits paid \n-190 \n-149 \n\n\n\n\n\n\nOther \n 9 \n5 \n\n\n\n\n\n\nFair value of plan assets at the end of the period \n 3 070 \n2 936 \n\n\n\n\n\n\nof which financial instruments issued by the group \n 0 \n0 \n\n\n\n\n\n\nof which property occupied by KBC \n 2 \n2 \n\n\n\n\n\n\nFunded status\n\n\n\n\n\n\n\n\nPlan assets in excess of defined benefit obligations \n 386 \n212 \n\n\n\n\n\n\nReimbursement rights \n 0 \n0 \n\n\n\n\n\n\nAsset ceiling limit \n-131 \n-70 \n\n\n\n\n\n\nUnfunded accrued/prepaid pension cost \n 255 \n142 \n\n\n\n\n\n\nMovement in net liabilities or net assets \n\n\n\n\n\n\n\n\nUnfunded accrued/prepaid pension cost at the beginning of the period \n 142 \n153 \n\n\n\n\n\n\nAmounts recognised in the income statement \n-82 \n-65 \n\n\n\n\n\n\nAmounts recognised in other comprehensive income \n 92 \n-43 \n\n\n\n\n\n\nEmployer contributions \n 97 \n93 \n\n\n\n\n\n\nOther \n 6 \n4 \n\n\n\n\n\n\nUnfunded accrued/prepaid pension cost at the end of the period \n 255 \n142 \n\n\n\n\n\n\nAmounts recognised in the income statement \n-82 \n-65 \n\n\n\n\n\n\nCurrent service cost \n-105 \n-95 \n\n\n\n\n\n\nInterest cost \n 5 \n10 \n\n\n\n\n\n\nPlan participant contributions \n 20 \n20 \n\n\n\n\n\n\nOther \n-2 \n0 \n\n\n\n\n\n\nChanges to the amounts recognised in other comprehensive income \n 92 \n-43 \n\n\n\n\n\n\nActuarial gain or loss resulting from changes in demographic assumptions \n 0 \n3 \n\n\n\n\n\n\nActuarial gain or loss resulting from changes in financial assumptions \n 76 \n-152 \n\n\n\n\n\n\nActuarial result on plan assets \n 102 \n107 \n\n\n\n\n\n\nExperience adjustments \n-29 \n56 \n\n\n\n\n\n\nAdjustments to asset ceiling limits \n-59 \n1 \n\n\n\n\n\n\nOther \n 1 \n-58 \n\n\n\n\n\n\nDEFINED CONTRIBUTION PLANS \n\n\n\n\n\n\n\n\nExpenses for defined contribution plans \n-14 \n-18 \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n\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 Retirement benefits that are actively accrued for the Belgium-based staff of KBC Bank, KBC Insurance and most of their \nBelgian subsidiaries are accrued exclusively through the KBC pension fund. Up until year-end 2018, employer-funded \nretirement benefits had accrued primarily through a defined benefit plan, where the benefit is calculated based on the final \nsalary of employees before they retire, the number of years they had been in the plan and a formula that applies a progressive \nrate scale. A defined contribution plan was introduced on 1 January 2014 for all new employees and any employees who had \nchosen to switch to it. In this plan, a contribution is deposited based on the current monthly salary and the amounts deposited \nare paid out together with the (guaranteed) return on retirement. Both types of pension plan are managed by the KBC pension \nfund, which uses the services of KBC Asset Management for the investment strategy. In addition, there are a number of smaller, \nclosed group insurance schemes from the past that will continue to be funded and are managed by the KBC pension fund. \nOn 1 January 2019, a new defined contribution plan was introduced to replace the one introduced in 2014. All employees were \nagain given the one-time option of switching from the defined benefit plan to the new defined contribution plan. At year-end \n2024, 48% of employees were active participants in the defined benefit plan and 52% in the defined contribution plan (the \ncorresponding figures at year-end 2023 were 52% and 48%). \n\u2022 The expected age of retirement of each employee and the expected wage inflation based on an inflation curve derived from \nthe market value of inflation-linked bonds are taken into account in the calculation of the gross defined benefit obligations. \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nAdditional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund \n\n\n\n\n\n\n\nComposition (31-12-2024) \n\n\n\n\n\n\n\nEquity instruments \n33% \n\n\n\n\n\n\nBonds \n53% \n\n\n\n\n\n\nReal estate \n13% \n\n\n\n\n\n\nCash \n0% \n\n\n\n\n\n\nof which illiquid assets \n17% \n\n\n\n\n\n\nComposition (31-12-2023) \n\n\n\n\n\n\n\nEquity instruments \n31% \n\n\n\n\n\n\nBonds \n55% \n\n\n\n\n\n\nReal estate \n13% \n\n\n\n\n\n\nCash \n1% \n\n\n\n\n\n\nof which illiquid assets \n17% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nContributions expected in 2025 (in millions of EUR) \n34\n\n\n\n\n\n\nRegulatory framework \nPension plans are registered in collective labour agreements and incorporated into a set of regulations. \n\n\n\n\n\n\n\nAnnual reporting of funding levels to supervisory authorities (FSMA/NBB). Any underfunding must be \n\n\n\n\n\n\n\nreported immediately to the supervisory authorities. \n\n\n\n\n\n\nRisks for KBC \nInvestment risk and inflation risk. \n\n\n\n\n\n\nALM policy \nThe hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps. \n\n\n\n\n\n\n\nThe return portfolio aims to generate an extra return. \n\n\n\n\n\n\nPlan amendments \nA new version of the employer-funded defined contribution plan was introduced on 1 January 2019. All \n\n\n\n\n\n\n\nemployees who had been signed up to the defined benefit plan were given the one-time option of \n\n\n\n\n\n\n\nswitching to this new plan. New employees are signed up to the employer-funded defined contribution \n\n\n\n\n\n\n\nplan. \n\n\n\n\n\n\nCurtailments and settlements \nNot applicable. \n\n\n\n\n\n\nDiscounting method \nBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are \n\n\n\n\n\n\n\nconverted into a zero coupon curve. \n\n\n\n\n\n\nKey actuarial assumptions \n\n\n\n\n\n\n\nxAverage discount rate \n3.10% \n\n\n\n\n\n\nxExpected rate of salary increase \n2.47% \n\n\n\n\n\n\nxExpected inflation rate \n2.16% \n\n\n\n\n\n\nxExpected rate of increase in pensions \n\u2013 \n\n\n\n\n\n\nxWeighted average duration of the obligations \n10 years \n\n\n\n\n\n\nImpact of changes in the assumptions used in the \n\n\n\n\n\n\n\nactuarial calculation of the retirement benefit \n\n\n\n\n\n\n\nobligations \n\n\n\n\n\n\n\nIncrease in the retirement benefit obligations \n\n\n\n\n\n\n\non 31-12-2024 consequent on: \n\n\n\n\n\n\n\nxa decrease of 1% in the discount rate \n10.98% \n\n\n\n\n\n\nxan increase of 1% in the expected inflation rate \n8.69% \n\n\n\n\n\n\nxan increase that is 1% higher than the expected real \n11.54% \n\n\n\n\n\n\nincrease in salary \n\n\n\n\n\n\n\nxan increase of one year in life expectancy \n\u2013 \n\n\n\n\n\n\nThe impact of the following assumptions has not been \nDecreasing mortality rates. Pension benefits are paid out \n\n\n\n\n\n\ncalculated: \nin capital, so longevity risk is immaterial. \n\n\n\n\n\n\n\nStaff turnover rates: the impact of the changes remains limited. \n\n\n\n\n\n\nAdditional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund \n\n\n\n\n\n\nContributions expected in 2025 (in millions of EUR) \n51 \n\n\n\n\n\n\nRegulatory framework \nPursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of \n\n\n\n\n\n\n\n2.50% on employee and employer contributions in 2025. \n\n\n\n\n\n\nRisks for KBC \nInvestment risk. \n\n\n\n\n\n\nValuation \nRetirement benefit obligations are measured on the basis of the accrued benefits on the reporting date, \n\n\n\n\n\n\n\nmaking a projection of these benefits (at the rate of interest guaranteed by law) until the expected age \n\n\n\n\n\n\n\nof retirement, and discounting the resulting benefits. \n\n\n\n\n\n\n\nKBC offers two types of defined contribution plan: one that is financed through employee contributions \n\n\n\n\n\n\n\nand one through employer contributions. The valuation of retirement benefit obligations for the \n\n\n\n\n\n\n\nemployer-funded defined contribution plan takes account of future contributions. However, it is not \n\n\n\n\n\n\n\ntaken into account for the valuation of the employee-funded defined contribution plan, because the \n\n\n\n\n\n\n\nemployer\u2019s obligation for that plan only relates to the guaranteed minimum interest rate. \n\n\n\n\n\n\nDiscounting method \nBased on quotes for various time buckets of AA-rated corporate bonds. The derived bond yields are \n\n\n\n\n\n\n\nconverted into a zero coupon curve. \n\n\n\n\n\n\nKey actuarial assumptions \n\n\n\n\n\n\n\nxAverage discount rate \n3.30% \n\n\n\n\n\n\nxWeighted average duration of the obligations \n15 years \n\n\n\n\n\n\nImpact of changes in the assumptions used in the \n\n\n\n\n\n\n\nactuarial calculation of the retirement benefit \n\n\n\n\n\n\n\nobligations \n\n\n\n\n\n\n\nIncrease in the retirement benefit obligations \n\n\n\n\n\n\n\non 31-12-2024 consequent on: \n\n\n\n\n\n\n\nxa decrease of 1% in the discount rate \n17.99% \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n \n \n \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nNote 6.1: Off-balance-sheet commitments and financial guarantees given and received \n\n\n\n\n(in millions of EUR) \n\n\n31-12-2024\n\n\n31-12-2023\n\n\n\n\n\n\nNominal \nProvision\nNet exposure\nNominal \nProvision\nNet exposure\n\n\n\n\n\n\namount \n\n\namount \n\n\n\n\n\n\n\nUndrawn portion of credit lines granted \n\n\n\n\n\n\n\n\n\n\n\nStage 1 \n 45 481 \n 18 \n 45 463 \n 41 551 \n 20 \n 41 531 \n\n\n\n\n\nStage 2 \n 3 314 \n 9 \n 3 305 \n 6 683 \n 14 \n 6 670 \n\n\n\n\n\nStage 3 \n 52 \n 2 \n 50 \n 79 \n 5 \n 73 \n\n\n\n\n\nTotal \n 48 848 \n 30 \n 48 818 \n 48 313 \n 39 \n 48 274 \n\n\n\n\n\nof which irrevocable credit lines \n 29 180 \n 10 \n 29 170 \n 27 856 \n 23 \n 27 833 \n\n\n\n\n\nFinancial guarantees given \n\n\n\n\n\n\n\n\n\n\n\nStage 1 \n 10 245 \n 3 \n 10 242 \n 7 860 \n 2 \n 7 859 \n\n\n\n\n\nStage 2 \n 992 \n 5 \n 987 \n 2 952 \n 6 \n 2 947 \n\n\n\n\n\nStage 3 \n 113 \n 32 \n 80 \n 133 \n 44 \n 90 \n\n\n\n\n\nTotal \n 11 350 \n 41 \n 11 309 \n 10 946 \n 51 \n 10 895 \n\n\n\n\n\nOther commitments given \n\n\n\n\n\n\n\n\n\n\n\nTotal \n 1 101 \n 2 \n 1 099 \n 1 421 \n 1 \n 1 420 \n\n\n\n\n\nOff-balance-sheet commitments and financial \n\n\n\n\n\n\n\n\n\n\n\nguarantees \n\n\n\n\n\n\n\n\n\n\n\nTotal \n 61 299 \n 73 \n 61 226 \n 60 680 \n 91 \n 60 589 \n\n\n\n\n\n\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\u2022 The carrying value of financial assets pledged by KBC as collateral came to 40 924 million euros for liabilities and \n1 667 million euros for contingent liabilities (36 842 million euros and 4 489 million euros in 2023). At year-end 2024, some \n21.8 billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the \nspecial estate of the covered bond programme (18.9 billion euros at year-end 2023). \n\u2022 There is an obligation to return collateral received (which may be sold or repledged in the absence of default by the owner; \nsee table) in its original form, or possibly in cash. Collateral can be called in if loans are terminated for various reasons such \nas default or bankruptcy. In the event of bankruptcy, the collateral will be sold by the receiver. In other cases, the bank will \norganise the foreclosure itself or take possession of the collateral. Collateral received that relates to OTC derivatives is \nprimarily cash, which is recognised by KBC on the balance sheet (and is not included in the table). More details are provided \nin Note 4.3. \n\u2022 Collateral acquired through foreclosure came to 3 million euros in 2024 (3 million euros in 2023). \n\n\n\n\nCollateral received (which may be sold or repledged \n\n\nFair value of collateral sold or \n\n\n\n\n\nin the absence of default by the owner) (in millions of EUR) \nFair value of collateral received \n\nrepledged \n\n\n\n\n\n\n31-12-2024\n31-12-2023\n31-12-2024\n31-12-2023\n\n\n\n\n\nFinancial assets \n 32 091 \n42 215 \n 12 279 \n5 267 \n\n\n\n\n\nEquity instruments \n 30 \n21 \n 2 \n2 \n\n\n\n\n\nDebt securities \n 31 809 \n41 959 \n 12 277 \n5 265 \n\n\n\n\n\nLoans and advances \n 252 \n235 \n 0 \n0 \n\n\n\n\n\nCash \n 0 \n0 \n 0 \n0 \n\n\n\n\n\nOther \n 0 \n0 \n 0 \n0 \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 \naccounting treatment is applied to IPCs: i) the amount of cash collateral is recognised as a financial asset and \nii) the hypothetical fund call in case of a resolution is reported as a contingent liability. The recognition of the cash collateral \nas a financial asset is based on the consideration that, in any scenario, the collateral should be returned to the bank and that \ninterest is received on the amount outstanding. In its 2023 decision, the General Court of the EU ruled that in a scenario in \nwhich a bank loses its banking license, it has no claim on the cash collateral. KBC decided to await the outcome of the appeal \nin this case at the European Court of Justice before considering the potential implications on the accounting treatment of \nIPCs. The amount of 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", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag928": { "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
(in millions of EUR) 20242023
Total -1689
Total broken down by type and IFRS portfolio
Net result from financial instruments at fair value through profit or loss 173322
Financial instruments MFVPL other than held for trading 1 679 1 250
Trading instruments (including interest on non-ALM trading derivatives and fair value changes in all trading derivatives) 202134
Other financial instruments at fair value through profit or loss -1 598 -1 103
Foreign exchange trading 108155
Fair value adjustments in hedge accounting -219-113
Insurance finance income and expense (for insurance contracts issued) -341-313
Hedge accounting broken down by type of hedge
Fair value micro-hedges 11-2
Changes in the fair value of the hedged items -269 -269
Changes in the fair value of the hedging derivatives 281 267
Cashflow hedges 0-9
Changes in the fair value of the hedging derivatives, ineffective portion 0-9
Hedges of net investments in foreign operations, ineffective portion 0 0
Portfolio hedge of interest rate risk 27
Changes in the fair value of the hedged items 469 1 029
Changes in the fair value of the hedging derivatives -467-1 022
Discontinuation of hedge accounting for fair value hedges -131 -58
Discontinuation of hedge accounting in the event of cashflow hedges -101-52
Total broken down by driver
Dealing room 294 288
Change in the value of derivatives used for asset/liability management purposes and other -189-47
Market value adjustments (xVA) -24-15
Investment result for unit-linked insurance contracts under IFRS 17 and Insurance finance income and expense -249-217
\n\n\n\n\n\n\n
\n

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

\n
Note 3.6: Insurance results
\n
\n\n

\n\n

\n\n

\n\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\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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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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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
Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
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\u2022 The column \u2018of which Life direct participation (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:
\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 insurance contracts measured under the VFA, which represents the
\n
change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
\n
in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
\n
P&L\u2019 (see also Note 3.3).
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\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
\n
in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
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(i.e. mainly interest income from bonds) and income tax.
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\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
\n
euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
\n
level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
\n
an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
\n
respectively, in 2023).
\n
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Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Investment result (OCI) on financial assets at FVOCI 74 0 -1 30 103
Change in Insurance finance income and expense \u2013 OCI, before -199 0 -26 \u2014 -225
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -199 0 -26 \u2014 -224
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 0 0 \u2014 \u2014 0
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI -125 0 -26 30 -122
Change in reinsurance finance income and expense \u2013 OCI 0 \u2014 0 \u2014 0
Deferred taxes \u2014 \u2014 \u2014 75 75
Net insurance and investment result after reinsurance, after tax \u2013 OCI -125 0 -26 104 -47
2023
Investment result (OCI) on financial assets at FVOCI 594 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 82
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7 \u2014 7
Deferred taxes \u2014\u2014 \u20141313
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 33 13 102
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\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the
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\u2018Effect of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019.
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\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
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\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 2024 and 2023
\n
were 40 million euros and 24 million euros, respectively, at insurance level of the 47 million euros and 21 million euros at group
\n
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) 20242023
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 472 432 39 406 370 36
Amounts related to changes in liabilities for remaining coverage 447 408 38 390 355 35
Expected claims and other insurance service expenses 262 232 29 226 200 25
Change in risk adjustment for risk expired (non-financial risk) 14 13 2 15 11 3
CSM recognised for services provided 170 163 7 150 143 6
Recovery of insurance acquisition cashflows 25 24 1 16 15 1
Insurance revenues for contracts measured using the PAA 2 483 31 2 452 2 284 30 2 255
Total insurance revenues 2 955 463 2 492 2 690 400 2 290
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Note 3.6.4: Life insurance sales
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(in millions of EUR) 20242023
Total 2 906 2 328
IFRS 17 \u2013 non-unit-linked 1 214 975
IFRS 17 \u2013 unit-linked 158 171
IFRS 17 \u2013 hybrid 197 131
Non-IFRS 17 1 337 1 051
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\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.
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\u2022 Hybrid products: see Note 5.6.1.
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\u2022 Sales of life insurance products in 2024 went up by 25% compared to 2023, largely driven by unit-linked insurance contracts
\n
in Belgium (non-IFRS 17) as well as by further growth in non-unit-linked insurance contracts (mainly in Belgium).
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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
Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR) revenues expenses in P&L reinsuranceheld reinsurance
2024
Personal insurance 308 -243 -8 57 \u2014 \u2014
Motor Third-Party Liability (MTPL) 594 -578 -19 -3 \u2014 \u2014
Liabilities other than MTPL 154 -139 -6 9 \u2014 \u2014
Casco 467 -430 -2 35 \u2014 \u2014
Property incl. other than casco 952 -789 -11 152 \u2014 \u2014
Total primary business 2 474 -2 179 -46 249 -7 242
Accepted reinsurance 18 -3 1 16 -6 10
Total 2 492 -2 181 -45 265 -13 252
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 business 2 272 -1 870 -31 371 -33 338
Accepted reinsurance 18 -2 0 17 -54 -38
Total 2 290 -1 872 -30 388 -87 301
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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
(in millions of EUR*) 20242023
Total -248 -215
Impairment on financial assets at AC and at FVOCI -199 16
(impairment on loans)
By IFRS category
Financial assets at amortised cost -201 17
Financial assets at fair value through OCI 2 -1
By product
Loans and advances -224 -5
Debt securities 4 6
Off-balance-sheet commitments and financial guarantees 21 15
By type
Stage 1 (12-month ECL) -30 -41
Stage 2 (lifetime ECL) 162 160
Stage 3 (lifetime ECL) -283 -92
Purchased or originated credit impaired assets -49 -11
By business unit/country
Belgium -246 -82
Czech Republic 34 70
International Markets 25 19
Slovakia 18 8
Hungary 23 11
Bulgaria -160
Group Centre -12 8
Impairment on goodwill 0 -109
Impairment on other -49 -122
Intangible fixed assets (other than goodwill) -36 -77
Property and equipment (including investment property) -2 -15
Associated companies and joint ventures 0 0
Other -11 -30
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* Positive figures indicate a reversal and hence a positive impact on results
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\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
\n
unemployment rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation.
\n
Microeconomic variables include, for example, confidence indicators, the harmonised consumer price index (HICP), the
\n
producer price index (PPI), and so on. As a result of regular back-testing, models may change and economic variables may
\n
be reassessed. The following table gives the base-case scenario for the three key indicators (GDP growth, unemployment
\n
rate and house price index) for each of our core countries for the coming years. After that, we take into account a gradual
\n
linear transition towards a stable situation.
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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
Macroeconomic base-case scenario \u2013 key indicators
(used for situation at year-end 2024)* 202420252026
Real GDP growth
Belgium 1.0% 0.6% 0.9%
Czech Republic 1.0% 2.3% 2.3%
Hungary 0.4% 2.1% 3.1%
Slovakia 2.2% 2.0% 2.6%
Bulgaria 2.2% 2.1% 2.4%
Unemployment rate
Belgium 5.8% 6.0% 5.9%
Czech Republic 2.9% 3.2% 3.1%
Hungary 4.6% 4.3% 3.9%
Slovakia 5.5% 5.5% 5.5%
Bulgaria 4.2% 4.2% 4.0%
House price index
Belgium 2.9% 3.0% 3.0%
Czech Republic 3.9% 4.2% 3.5%
Hungary 7.0% 4.5% 4.0%
Slovakia 3.0% 3.0% 3.5%
Bulgaria 12.2% 5.0% 3.5%
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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 2024\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 2024 were 60% for the \u2018base\u2019 scenario, 20% for the optimistic \u2018up\u2019 scenario and 20% for the pessimistic
\n
\u2018down\u2019 scenario. The forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on
\n
the collectively assessed ECL (i.e. without the ECL for individually assessed loans of 1.65 billion euros at the end of 2024 and
\n
1.56 billion euros at the end of 2023) shows that the \u2018base\u2019 scenario generates an ECL of 0.81 billion euros (0.91 billion euros in
\n
2023), which is 0.02 billion euros lower than for the \u2018down\u2019 scenario (0.07 billion euros in 2023) and 0.01 billion euros higher than
\n
for the \u2018up\u2019 scenario (0.03 billion euros in 2023). The assessed scenario-weighted collective ECL results (that were recognised)
\n
amounted to 0.81 billion euros (0.93 billion euros in 2023). These amounts include the ECL related to geopolitical and
\n
macroeconomic uncertainties.
\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
100% 100% 100%
Collectively assessed ECL by country (2024, in billions of EUR) base-case scenario optimistic scenario pessimistic
scenario
Total 0.81 0.79 0.83
Belgium 0.26 0.260.27
Czech Republic 0.27 0.27 0.27
Slovakia 0.080.08 0.08
Hungary 0.04 0.04 0.05
Bulgaria 0.15 0.14 0.15
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\u2022 The management of ESG risks is an integral part of the Credit Risk Management Framework (CRMF; see \u2018How do we manage
\n
our risks?\u2019 (under \u2018Credit risk\u2019)). Dedicated processes have been developed focusing on the risk management of ESG-related
\n
credit risks, and in particular on identification measurement, risk appetite and follow-up. A detailed explanation of the Credit
\n
Risk Management Framework is provided in the \u2018ESG in credit risk management\u2019 section of the Risk Report, which is available
\n
at www.kbc.com. The main elements of this management framework are as follows:
\n
- In order to identify ESG-related credit risks, we use the Environmental Risk Impact Map (ERIM) to assess the impact of
\n
various climate and environmental risk drivers on the credit risk profile. Additionally, regular thematic analyses are also
\n
carried out (so-called \u2018White Papers\u2019). In the loan origination and review process, a sector-based environmental and social
\n
(E&S) heat map is used. This is a screening tool to identify the risks involved in the portfolio of loans to corporate entities
\n
and SMEs. For material credit files in scope of high E&S Risk sectors, an ESG assessment is performed at counterparty level.
\n
- In the context of risk quantification, specific measurement techniques are being developed to assess the impact of ESG
\n
risks on our loan portfolio. For example, KBC is exploring the possibility of assessing sectoral climate impacts on Probability
\n
of Default (PD) based on climate scenarios from the Network for Greening the Financial System (NGFS). The quantifiability
\n
of ESG-related risks will gradually increase with the improved availability of data and measurement methodologies.
\n
- As regards risk appetite, KBC aims to limit the adverse impact of its activities on the environment and society and to
\n
encourage a positive impact, based on a responsible lending culture, the principles of which are laid out in a group-wide
\n
sustainability policy. KBC\u2019s commitment to consider climate and environmental risks is reflected in standards and policies
\n
addressing credit risk. These standards and policies apply in every step of the credit process, including, for instance, in
\n
loan pricing and collateral valuation. Furthermore, climate-related Key Risk Indicators (KRIs) were introduced in the Risk
\n
Appetite Process. These KRI\u2019s are monitored on a semi-annual basis by the Group Lending Committee and integrated in
\n
the Climate Risk Dashboard.
\n
\u2022 KBC is gradually incorporating climate-related risks in the ECL process. This is reflected in our commitment, as described
\n
above, to consider climate-related risks in our collateral valuation process and in the ESG assessment of the relevant
\n
counterparty. KBC is also looking into the possibilities of a portfolio approach, which involves studying new methods to
\n
determine any relationship between the expected evolution of the climate and credit risk. As stated above, KBC is
\n
investigating whether a practicable model can be built to assess sectoral climate impacts based on climate scenarios
\n
developed by the NGFS. At this stage of the investigation, it is too early to include any impacts in the accounting policies.
\n
Management has the ability to overrule the expected credit losses and to capture the growing insights into ESG and climate-
\n
related risks.
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\u2022 Impairment on goodwill in 2023: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the
\n
reduction of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future
\n
projected earnings. This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros
\n
(based on the exchange rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of
\n
\u010cSOB Stavebn\u00ed (the former \u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time,
\n
which resulted in a one-off gain of 82 million euros.
\n
\u2022 Reserve for geopolitical and macroeconomic uncertainties (referred to as the \u2018reserve for geopolitical and emerging risks\u2019 up
\n
until year-end 2023): the outstanding balance of the ECL for geopolitical and macroeconomic uncertainties came to 117 million
\n
euros at year-end 2024; the corresponding figure at year-end 2023 was 256 million euros. This ECL is determined based on
\n
individual counterparties and sectors in our portfolio which are deemed to have incurred an increase in credit risk because
\n
they are either (\u00b0) exposed to the macroeconomic risks (e.g., high(er) inflation and interest rates, high(er) energy prices) or (\u00b0)
\n
indirectly exposed to ongoing military conflict, such as the one in Ukraine. The decline is largely attributable to the improved
\n
micro- and macroeconomic outlook and the reversal of a collective migration of \u2018Stage 1\u2019 positions to \u2018Stage 2\u2019 for positions
\n
whose credit risk has increased significantly, which are included in the standard staging assessment since the fourth quarter
\n
of 2024. At year-end 2023, 12 billion euros\u2019 worth of \u2018Stage 1\u2019 positions were collectively migrated to \u2018Stage 2\u2019.
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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 before Carrying value after
(in millions of EUR) impairmentImpairmentimpairment
31-12-2024
Financial assets at amortised cost: Loans and advances* 217 093 -2 448 214 645
Stage 1 (12-month ECL) 197 031 -176 196 855
Stage 2 (lifetime ECL) 16 177 -331 15 847
Stage 3 (lifetime ECL) 3 472 -1 803 1 669
Purchased or originated credit impaired assets (POCI) 414 -138 276
Financial assets at amortised cost: Debt securities 50 084 -8 50 075
Stage 1 (12-month ECL) 49 979 -6 49 973
Stage 2 (lifetime ECL) 100 -1 99
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 securities 22 543 -4 22 539
Stage 1 (12-month ECL) 22 543 -4 22 539
Stage 2 (lifetime ECL) 0 0 0
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2023
Financial assets at amortised cost: Loans and advances* 213 531 -2 474 211 057
Stage 1 (12-month ECL) 175 853 -146 175 708
Stage 2 (lifetime ECL) 33 571 -490 33 081
Stage 3 (lifetime ECL) 3 694 -1 750 1 944
Purchased or originated credit impaired assets (POCI) 412 -88 324
Financial assets at amortised cost: Debt securities 51 384 -12 51 372
Stage 1 (12-month ECL) 51 300 -6 51 294
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 securities 16 897 -5 16 892
Stage 1 (12-month ECL) 16 864 -4 16 861
Stage 2 (lifetime ECL) 33 -1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
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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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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily
\n
to:
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- an organic net increase in the loan portfolio (mainly mortgage loans and term loans);
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- a decrease in the carrying value 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 17.4 billion euros in 2024,
\n
due primarily to:
\n
- the release 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 conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic
\n
risks (12.0 billion euros at year-end 2023).
\n
- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying
\n
value of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to
\n
the introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a
\n
lesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk
\n
was updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The
\n
aim of both adjustments is to better reflect the underlying credit risk after initial recognition.
\n
- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect
\n
exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks,
\n
which are included in the standard staging assessment since the fourth quarter of 2024.
\n
\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in
\n
\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly
\n
offset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial
\n
assets at fair value through OCI\u2019 (FVOCI) category.
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\u2022 Impairment: stable in 2024 compared to 2023:
\n
- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2).
\n
\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to
\n
modifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage
\n
1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros
\n
in 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or
\n
losses are recognised under impairment (see Note 3.9).
\n
\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure for 2023 was 59 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 1 Stage 2 Stage 3 (purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR) 12-month ECL lifetime ECL lifetime ECL impaired) Total
2024
Impairment on 1 January 146 490 1 750 88 2 474
Movements with an impact on results1 31 -154 334 49 260
Transfer of financial assets
Stage 1 (12-month ECL) -11 76 43 0 108
Stage 2 (lifetime ECL) 19 -112 98 0 4
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 12 -31 -1 -20
New financial assets2 56 14 6 0 76
Changes in risk parameters during the reporting period -23 -81 242 50 188
Changes in the model or methodology 1 -35 -1 0 -35
Derecognised financial assets3-11 -28 -35 -1 -75
Other 0 0 12 1 13
Movements without an impact on results -1 -6 -280 1 -286
Derecognised financial assets3-1 -2 -234 -1 -238
Changes in the scope of consolidation 1 -1 0 0 0
Transfers under IFRS 5 0 0 0 0 0
Other -1 -3 -46 2 -48
Impairment on 31 December 176 331 1 803 138 2 448
2023
Impairment on 1 January 110 635 1 796 77 2 619
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 assets2 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 assets3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets3-2-1-207-1-211
Changes in the scope of consolidation 0 0 0 0 0
Transfers under IFRS 50 0 0 0 0
Other 0019120
Impairment on 31 December 146 490 1 750 88 2 474
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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 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt
\n
securities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited.
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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 specified in that section.
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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
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collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
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risks?\u2019 section.
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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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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end 2024 (2 808 million euros at year-end 2023).
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
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euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
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in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
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bonds.
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Note 4.7: Financial assets and liabilities measured at fair value \u2013 focus on level 3
\n
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\u2022 In 2024, 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 (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
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changes in market inputs.
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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 (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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 at year-end 2024 (the same as at year-end 2023).
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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) 31-12-202431-12-2023
Carrying value Notional amounts* Carrying value Notional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total 4 584 4 679 616 452 615 520 4 618 5 501 598 880 591 923
Interest rate contracts 1 589 1 781 429 232 426 678 1 821 2 252 403 723 395 170
of which interest rate swaps and futures 1 510 1 740 421 656 422 160 1 684 2 169 394 018 389 184
of which options 80 41 7 576 4 518 137 83 9 705 5 986
Foreign exchange contracts 2 193 1 784 172 410 174 374 2 318 2 481 180 438 182 719
of which currency and interest rate swaps, forward 2 101 1 720 167 819 167 306 2 246 2 409 176 708 176 829
foreign exchange transactions and futures
of which options 92 64 4 592 7 067 72 72 3 730 5 890
Equity contracts 799 1 110 14 530 14 191 471 761 14 381 13 698
of which equity swaps 646 692 11 348 10 995 385 393 11 314 11 031
of which options 153 418 3 181 3 196 85 368 3 067 2 667
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 4 3 280 277 8 7 338 336
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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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31-12-2024
(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 strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 37 727 37 727 96 63 281Debt securities held at AC 8 050 -252 17
Currency and 0 0 0 0 0 Loans and advances at AC 569 33 -45
interest rate swaps
Debt securities held at FVOCI 7 254 64 80
Debt securities issued at AC 21 802 -226 -334
Deposits at AC 102 -11 13
Total 37 727 37 727 96 63 281 Total -269 11 -
Portfolio hedge of interest rate risk
Interest rate swaps 141 341 141 341 67 95 -464 Debt securities held at AC 831 -31 -23
Currency and 1 214 0 48 0 -3 Loans and advances at AC 121 621 -1 988 622
interest rate options
Debt securities held at FVOCI 76 0 -3
Debt securities issued at AC 0 0 0
Deposits at AC 17 471 -379 -121
Insurance contract liabilities, Life 161 6 -6
Total 142 555 141 341 115 95 -467Total 469 2 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 17 376 17 376 5 120 22
Currency and 1 830 1 790 19 17 -30
interest rate swaps
Total 19 206 19 166 24 137 -8 Total 8 0 -486
Hedge of net investments in foreign operations
Total3 2 826 2 806 35 518 54 Total -54 0 147
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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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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
31-12-2023
(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
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 31 864 31 864 97 112 267 Debt securities held at AC 6 547 -300 377
Currency and 0 0 0 0 0 Loans and advances at AC 601 75 3
interest rate swaps
Debt securities held at FVOCI 2 999 -25 124
Debt securities issued at AC 21 285 -560 -774
Deposits at AC 0 0 0
Total 31 86431 864 97 112 267 Total -269 -2 \u2013
Portfolio hedge of interest rate risk
Interest rate swaps 143 932 143 932 93 123 -995 Debt securities held at AC 937 -7 115
Currency and 1 618 0 70 0 -27 Loans and advances at AC 125 541 -2 473 1 841
interest rate options
Debt securities held at FVOCI 85 3 9
Debt securities issued at AC 0 0 0
Deposits at AC 15 938 -507 -936
Total 145 550 143 932 163 123 -1 022 Total 1 029 7 \u2013
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 19 603 19 603 15 127 401
Currency and 1 181 1 205 1 22 -14
interest rate swaps
Total 20 784 20 808 17 149 387 Total -395 -9 -611
Hedge of net investments in foreign operations
Total32 579 2 570 19 460 77 Total -77 0 92
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\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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\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 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.
\n
\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
\n
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.
\n
\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
\n
applied came to -187 million euros in 2024 (-322 million euros in 2023). The accumulated amount of fair value hedge
\n
adjustments remaining on the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and
\n
losses amounted to -99 million euros in 2024 (-82 million euros in 2023). These adjustments are amortised to profit or loss.
\n
\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
\n
accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
\n
balance sheet.
\n
\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk were less
\n
negative in 2024 due to the decrease in the risk-free rate and the unwinding effect of the negative accumulated fair value
\n
adjustment. The \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item on the liabilities
\n
side of the balance sheet was also less negative for the same reasons.
\n
\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
\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
Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR) Inflow Outflow
Not more than three months 21 -38
More than three but not more than six months 46 -54
More than six months but not more than one year 103 -177
More than one but not more than two years 183 -325
More than two but not more than five years 533 -770
More than five years 1 321 -1 572
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Note 5.2: Tax assets and tax liabilities
\n
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(in millions of EUR) 31-12-202431-12-2023
CURRENT TAXES
Current tax assets 59 176
Current tax liabilities 121 99
DEFERRED TAXES 593 351
Deferred tax assets by type of temporary difference 1 382 1 134
Employee benefits 80 85
Losses carried forward 366 103
Tangible and intangible fixed assets 98 80
Provisions for risks and charges 18 19
Impairment for losses on loans and advances 212 207
Financial instruments at fair value through profit or loss and fair value hedges 86 92
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 426 445
Insurance contract liabilities 33 36
Other, incl. reinsurance contracts 64 68
Deferred tax liabilities by type of temporary difference 789 784
Employee benefits 113 95
Losses carried forward 0 0
Tangible and intangible fixed assets 57 43
Provisions for risks and charges 9 9
Impairment for losses on loans and advances 3 3
Financial instruments at fair value through profit or loss and fair value hedges 85 76
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 21 41
Insurance contract liabilities 452 467
Other, incl. reinsurance contracts 50 50
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets 942 724
Deferred tax liabilities 349 373
Unused tax losses and unused tax credits 95 117
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\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 (+242 million euros in 2024) breaks down as follows:
\n
- The change in deferred tax assets of +248 million euros was primarily due to:
\n
- an increase in deferred tax assets via the income statement (+235 million euros), due mainly to losses carried forward
\n
(+263 million euros). This increase includes the recognition of a deferred tax asset for KBC Bank NV of 318 million euros
\n
relating to the imminent liquidation of Exicon (formerly KBC Bank Ireland) in the fourth quarter of 2024, partly offset by
\n
using deferred tax assets previously created due to taxable profits;
\n
- a decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments measured
\n
at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-19 million euros).
\n
- The change in deferred tax liabilities of +6 million euros was accounted for chiefly by:
\n
- an increase in deferred tax liabilities for employee benefit liabilities mainly recorded through OCI (+17 million euros),
\n
tangible and intangible fixed assets (+14 million euros) and reinforced by financial instruments at fair value through
\n
profit or loss and fair value hedges (+9 million euros);
\n
- a decrease in deferred tax liabilities 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 (-19 million
\n
euros);
\n
- a decrease in deferred tax liabilities for insurance contract liabilities (-15 million euros), with an amount of +64 million
\n
euros being recorded through OCI and -49 million euros being recorded via the income statement.
\n
\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank and \u010cSOB in the Czech
\n
Republic.
\n
\n

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Note 5.5: Goodwill and other intangible assets
\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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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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Discount rates throughout the specific period
Goodwill outstandingof cashflow projections
(in millions of EUR) 31-12-2024 31-12-202331-12-202431-12-2023
K&H Bank 16918114.7% \u2013 13.5% 15.2% \u2013 13.7%
\u010cSOB (Czech Republic) 24825212.7% \u2013 12.6% 13.0% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna656612.7% \u2013 12.6%13.0% \u2013 12.8%
United Bulgarian Bank 54654612.4% \u2013 12.3% 13.3% \u2013 12.5%
DZI Insurance 757510.1%11.2% \u2013 10.4%
KBC Commercial Finance 212111.6% \u2013 12.2% 12.0%
Pension Insurance Company UBB 56567.3% \u2013 7.8% 8.3% \u2013 8.4%
Rest 4242\u2013\u2013
Total 1 221 1 240 \u2013\u2013
\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 2024 (between
\n
3.2% and 4.7% in 2023).
\n
\u2022 For all entities, at year-end 2024 the recoverable amount exceeded the carrying value to such a large extent that no
\n
reasonably possible change in the key assumptions would result in the recoverable amount being less than or equal to the
\n
carrying value.
\n

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

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Note 5.6: Insurance \u2013 balance sheet
\n\n

\n
Note 5.6.1: Breakdown of (re)insurance contract assets and 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
(in millions of EUR) 20242023
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 20 20 \u2014 \u201400\u2014\u2014
Insurance contract liabilities 13 925 57 12 899 969 13 862 55 12 878 928
LRC (liability for remaining coverage) 13 718 2 12 769 948 13 674 2 12 762 910
Unit-linked 823 0 \u2014 823 798 0 \u2014 798
Non-unit-linked 11 931 2 11 929 \u2014 12 651 2 12 650 \u2014
Hybrid 964 0 840 125 225 0 112 112
Accepted reinsurance 0 0 0 0 0 0 0 0
LIC (liability for incurred claims) 207 55 130 22 188 53 116 18
Unit-linked 19 0 \u2014 19 13 0 \u2014 13
Non-unit-linked 168 55 112 \u2014 153 53 99 \u2014
Hybrid 21 0 18 3 21 0 17 4
Accepted reinsurance 0 0 0 0 0 0 0 0
Assets for acquisition cost 0 0 0 0 0 0 0 0
Non-life
Reinsurance assets 98 98 \u2014 \u2014 64 64 \u2014\u2014
Insurance contract liabilities 3 186 2 971 214 \u2014 2 922 2 716 206 \u2014
LRC (liability for remaining coverage) 744 547 196 \u2014 701 512 190 \u2014
Personal insurance 211 14 196 \u2014 205 16 190 \u2014
Motor Third-Party Liability (MTPL) 156 156 \u2014 \u2014 160 160 \u2014\u2014
Liabilities other than MTPL 25 25 \u2014 \u2014 25 25 \u2014\u2014
Casco 118 118 \u2014 \u2014 96 96 \u2014\u2014
Property other than casco 234 234 \u2014 \u2014 216 216 \u2014\u2014
Accepted reinsurance -1 -1 0 \u2014 0 0 0 \u2014
LIC (liability for incurred claims) 2 442 2 424 18 \u2014 2 220 2 204 16 \u2014
Personal insurance 656 638 18 \u2014 610 594 16 \u2014
Motor Third-Party Liability (MTPL) 935 935 \u2014 \u2014 863 863 \u2014\u2014
Liabilities other than MTPL 401 401 \u2014 \u2014 357 357 \u2014\u2014
Casco 66 66 \u2014 \u2014 53 53 \u2014\u2014
Property other than casco 364 364 \u2014 \u2014 319 319 \u2014\u2014
Accepted reinsurance 20 20 0 \u2014 18 18 0 \u2014
Assets for acquisition cost 0 0 0 \u2014 0 0 0 \u2014
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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
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key 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
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standard mortality tables and adapted where necessary to reflect the group\u2019s own experience.
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- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and
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associated overhead expenses which are considered directly attributable. Expenses are considered directly attributable
\n
if they are 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
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these
\n
assumptions 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
\n
costs, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors
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such as court awards, legislation and discounting.
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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
\n
the individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate
\n
level of service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits
\n
provided for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting
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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
\n
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 (196 million euros in 2024, 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
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personal insurance (638 million euros in 2024, 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 Current account transactions with intermediaries and reinsurers are not included in the measurement of insurance liabilities
\n
but treated as a separate asset measured under IFRS 9.
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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 Solvency II volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other
\n
liabilities for which bottom-up curves are used).
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Yield curve used to discount cashflows not varying based on underlying items; bottom-up method (forward rates)
CurrencyIlliquidity premiumPortfolio duration
1 year 5 years 10 years 20 years
2024
EUR with volatility adjustment 1.91% 2.61% 2.84% 2.14%
without volatility adjustment 1.67% 2.37% 2.60% 1.91%
CZK with volatility adjustment 4.01% 3.93% 4.30% 4.20%
without volatility adjustment 3.84% 3.76% 4.12% 4.03%
HUFwith volatility adjustment6.92% 6.93% 7.39% 6.55%
without volatility adjustment 6.84% 6.85% 7.30% 6.48%
BGN with volatility adjustment 1.94% 2.58% 2.83% 2.19%
without volatility adjustment 1.78% 2.42% 2.67% 2.03%
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment 2.92% 2.29% 2.74% 2.13%
CZK with volatility adjustment 4.83% 3.19% 3.70% 3.98%
without volatility adjustment 4.67%3.03% 3.54% 3.82%
HUF with volatility adjustment 5.55% 5.25% 6.29% 5.49%
without volatility adjustment 5.44% 5.14% 6.18% 5.38%
BGN with volatility adjustment 3.16% 2.50% 3.00% 2.43%
without volatility adjustment 2.84% 2.18%2.68% 2.11%
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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
(in millions of EUR) Liabilities for remaining coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured PAA
under PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 13 667 7 134 50 3 13 862
Insurance service result -435 24 225 19 0 -168
Insurance revenues -463 \u2014 \u2014 \u2014 \u2014 -463
BBA + VFA by transition method -432 \u2014 \u2014 \u2014 \u2014 -432
Modified retrospective approach -9 \u2014 \u2014 \u2014 \u2014 -9
Fair value approach -280 \u2014 \u2014 \u2014 \u2014 -280
Other -143 \u2014 \u2014 \u2014 \u2014 -143
PAA -31 \u2014 \u2014 \u2014 \u2014 -31
Insurance service expenses 28 24 225 19 0 296
Incurred claims (excl. repayments of investment components) \u2014 -2 156 14 1 169
Incurred costs other than claims 0 -2 99 3 0 100
Amortised acquisition expenses 28 \u2014 \u2014 \u2014 \u2014 28
Changes in fulfilment cashflows that relate to future service \u2013 loss on \u2014 28 \u2014 \u2014 \u2014 28
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 -29 1 -1 -29
Investment components -2 591 \u2014 2 591 \u2014 \u2014 0
Investment result 6 0 \u2014 \u2014 \u2014 6
Net result from financial instruments at fair value through profit or loss 6 0 \u2014 \u2014 \u2014 6
Insurance finance income and expense 490 1 2 2 0 495
In P&L 292 1 2 1 0 296
In OCI 198 0 0 1 0 199
Total changes in comprehensive income -2 529 25 2 818 20 0 334
Total cashflows 2 585 \u2014 -2 798 -19 \u2014 -232
Premiums received2 712 \u2014 \u2014 \u2014 \u2014 2 712
Claims paid \u2014 \u2014 -2 699 -16 \u2014 -2 715
Costs other than claims paid \u2014 \u2014 -99 -3 \u2014 -102
Acquisition costs paid -127 \u2014 \u2014 \u2014 \u2014 -127
Other -37 0 -2 0 0 -39
Closing balance 13 686 32 152 52 4 13 925
2023
Opening balance13 258 1012647313 444
Insurance service result -381 -2 218 16 1 -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 expenses 19-2218161251
Incurred claims (excl. repayments of investment components)\u2013-1156131169
Incurred costs other than claims0-7922\u201387
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 \u2013 1 284 \u2013 \u2013 0
Investment result 0 0 \u2014 \u2014 \u2014 0
Net result from financial instruments at fair value through profit or loss 0 0\u2014\u2014\u2014 0
Insurance finance income and expense 815 0 3 3 0 821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows 1 271 \u2013 -1 497 -16 \u2013 -242
Premiums received1 401 \u2013 \u2013 \u2013 \u2013 1 401
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 balance 13 667 7 134 50 3 13 862
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\u2022 In the transition from IFRS 4 to IFRS 17 on 1 January 2022, KBC applied the Full Retrospective Approach (FRA) for recent years.
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Applying the FRA for non-recent years was impracticable due to either a lack of historical data (data and hypotheses) or high
\n
costs associated with making information from the past available for FRA transition calculations. Where the FRA was
\n
impracticable, the Fair Value Approach (FVA) was predominantly used to determine the CSM on the transition date. The
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Modified Retrospective Approach (MRA) was rarely applied as this transition approach was overly complex and the costs did
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not outweigh the benefits. KBC calculated a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently
\n
adjusted a few assumptions or parameters. The adjustments related to the inclusion in the IFRS 13 fair value of total expenses,
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i.e. including non-directly attributable expenses, and to the inclusion of a risk premium that covers not only non-financial risk,
\n
but also system and integration expenses and capital funding costs. All past years were combined into a single cohort for the
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FVA transition calculations. The FVA CSM ensued from cost and risk margin differences under IFRS 17 and IFRS 13 measurement
\n
approaches. Due to the application of the FVA on the transition date in accordance with the transition exemptions provided
\n
in IFRS 17, the OCI amount was set at nil.
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\u2022 Movement in insurance liabilities in 2024:
\n
- Due to the further decrease in market interest rates during 2024, an expense in OCI of 199 million euros before tax is
\n
recognised as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance
\n
income and expense between P&L and OCI.
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- The movement in the investment component of 2 591 million euros from LRC to LIC indicates the amounts of contracts
\n
coming at maturity or lapsed and includes 866 million euros resulting from the surrender in 2024 of individual pension
\n
agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
\n
policyholders of the relevant contracts were given the opportunity to invest in unit-linked products.
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\u2022 Movement in insurance liabilities in 2023:
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- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised
\n
as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income
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and 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
\n
coming 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).
\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, and 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.
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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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured under
PAA
PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 700 1 16 1 964 240 2 922
Insurance service result -1 952 3 31 1 606 10 -303
Insurance revenues -2 482 \u2014 \u2014 \u2014 \u2014 -2 482
BBA by transition method -39 \u2014 \u2014 \u2014 \u2014 -39
Modified retrospective approach 0 \u2014 \u2014 \u2014 \u2014 0
Fair value approach -29 \u2014 \u2014 \u2014 \u2014 -29
Other -11 \u2014 \u2014 \u2014 \u2014 -11
PAA -2 443 \u2014 \u2014 \u2014 \u2014 -2 443
Insurance service expenses 530 3 31 1 606 10 2 179
Incurred claims (excl. repayments of investment components) \u2014 -1 28 1 251 65 1 343
Incurred costs other than claims 0 0 3 232 0 236
Amortised acquisition expenses 529 \u2014 \u2014 \u2014 \u2014 529
Changes in fulfilment cashflows that relate to future service \u2013 loss \u2014 4 \u2014 \u2014 \u2014 4
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 0 122 -55 66
Investment components 0 \u2014 0 \u2014 \u2014 0
Insurance finance income and expense 7 0 0 58 7 72
In P&L 1 0 0 39 5 45
In OCI 6 0 0 18 2 26
Total changes in comprehensive income -1 945 3 31 1 664 17 -231
Total cashflows 1 991 \u2014 -29 -1 453 \u2014 509
Premiums received2 532 \u2014 \u2014 \u2014 \u2014 2 532
Claims paid \u2014 \u2014 -26 -1 222 \u2014 -1 248
Costs other than claims paid \u2014 \u2014 -3 -231 \u2014 -234
Acquisition costs paid -540 \u2014 \u2014 \u2014 \u2014 -540
Other -6 0 0 -6 -1 -14
Closing balance 740 4 182 168 256 3 186
2023
Opening balance6751141 8022222 714
Insurance service result -1 789 0 28 1 343 7 -410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach 0\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 expenses 491 0 28 1 343 7 1 869
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 components 0 \u2013 0 \u2013 \u2013 0
Insurance finance income and expense -48 0 1 89 12 54
In P&L00027430
In OCI-480063824
Total changes in comprehensive income -1 837 0 29 1 433 19 -356
Total cashflows 1 862 \u2013 -27 -1 288 \u2013 547
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
Other 10017018
Closing balance 700 1 16 1 964 240 2 922
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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.
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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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\n\n\n\n\n\n\n\n\n\n\n
Note 5.6.4: Movements in Life insurance contract liability components (BBA, VFA)
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Present value
of future Risk Total insurance
cashflows adjustment contract
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin liabilities
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
2024
Opening balance 11 538 152 47 1 387 683 13 807
Insurance service result -212 41 -2 -125 138 -159
Changes that relate to future service -201 53 4 -11 182 28
New business -245 29\u2013\u2013 230 14
Changes in estimates reflected in the CSM 32 23 4-11-48 0
Changes in estimates that result in onerous contract 13 1\u2013\u2013\u2013 14
losses and reversals
Changes that relate to current service 16 -9 -5 -114 -44 -157
CSM recognised in P&L 0--5-114-44-163
Changes in the risk adjustment (expected) 0-9\u2013\u2013\u2013-9
Experience adjustments 16-\u2013\u2013\u2013 16
Changes to liabilities for incurred claims related to past -27 -3 \u2013 \u2013 \u2013 -29
service
Investment result 6 - \u2013 \u2013 \u2013 6
Net result from financial instruments at fair value through P&L 6-\u2013\u2013\u2013 6
Insurance finance income and expense 466 4 1 10 13 493
In P&L 269 3 1 10 13 295
In OCI 197 1--- 198
Total changes in comprehensive income 260 44 -1 -115 151 341
Total cashflows -241\u2013 \u2013 \u2013 \u2013 -241
Premiums received 2 681\u2013\u2013\u2013\u20132 681
Claims paid -2 699\u2013\u2013\u2013\u2013-2 699
Costs other than claims paid -99\u2013\u2013\u2013\u2013-99
Acquisition costs paid -124\u2013\u2013\u2013\u2013-124
Other changes -28 -1 -3 -4 -3 -39
Closing balance 11 529 195 43 1 268 832 13 868
2023
Opening balance11 378112451 37748013 393
Insurance service result -390 47 -1 8 198 -139
Changes that relate to future service -399 56 4 120 224 5
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
Investment result 0 \u2013 \u2013 \u2013 \u2013 0
Net result from financial instruments at fair value through P&L0\u2013\u2013\u2013\u20130
Insurance finance income and expense 809 -7 1 9 7 818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income 418 40 0 16 205 679
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 -1 2 -6 -1 -14
Closing balance 11 538 152 47 1 387 683 13 807
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
\n
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- Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by
\n
the insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity
\n
of the benefits provided to the policyholder under a contract and its expected coverage period.
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- Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected
\n
to be provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current
\n
period.
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\u2022 Main movements in 2024 and 2023: the 43-million-euro increase in the risk adjustment in 2024 is mostly related to a model
\n
change to take into account the risk that clients stop paying premiums for long-term life insurance contracts. The movement
\n
of the contractual service margin in 2024, under \u2018New business\u2019, includes a 96-million-euro increase related to the migration
\n
of individual pension agreements from the \u2018Risk and Savings\u2019 portfolio to the \u2018Hybrid products\u2019 portfolio (see also Note 5.6.2).
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There were no material changes in 2023.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value
of future Risk
cashflows adjustment Total insurance
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin contract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2024
Opening balance 8 71 52 74 206
Insurance service result -72 60 -21 26 -7
Changes that relate to future service -74 62 -19 31 0
New business -21 3 \u2014 18 0
Changes in estimates reflected in the CSM -52 58 -19 13 0
Changes in estimates that result in onerous contract 0 0 \u2014 \u2014 0
losses and reversals
Changes that relate to current service 1 -1 -2 -5 -7
CSM recognised in P&L \u2014 \u2014 -2 -5 -7
Changes in the risk adjustment (expected) \u2014 -1 \u2014 \u2014 -1
Experience adjustments 1 \u2014 \u2014 \u2014 1
Changes to liabilities for incurred claims related to past 0 0 \u2014 \u2014 0
service
Insurance finance income and expense 15 -9 0 1 7
In P&L -1 1 0 1 1
In OCI 16 -10 \u2014 \u2014 6
Total changes in comprehensive income -57 51 -21 27 -1
Total cashflows 9 \u2014 \u2014 \u2014 9
Premiums received 46 \u2014 \u2014 \u2014 46
Claims paid -26 \u2014 \u2014 \u2014 -26
Costs other than claims paid -3 \u2014 \u2014 \u2014 -3
Acquisition costs paid -8 \u2014 \u2014 \u2014 -8
Other changes 0 0 0 0 0
Closing balance -40 122 31 101 214
2023
Opening balance17759367252
Insurance service result 11 16 -41 7 -7
Changes that relate to future service 9 19 -38 10 0
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 service 2 -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 -19 0 1 -48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income -17 -4 -41 7 -54
Total cashflows 8 \u2013 \u2013 \u2013 8
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 changes 0 0 0 0 0
Closing balance 8 71 52 74 206
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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 6-million-euro increase in 2024 is attributable to
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a slight decline in the yield curve. A typical feature of the hospitalisation portfolio is that interest rate movements have a
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greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums are levelled (constant \u2018cash in\u2019 during
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the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019 more towards the end of the contract).
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\u2022 The 52-million-euro drop in the present value of future cashflows for changes in estimates reflected in the CSM in 2024 is due
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to a model update in which expected higher claims result in higher premiums. A higher premium volume generates more future
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profit and, as a result, lower fulfilment cashflows. The 58-million-euro increase in changes in estimates reflected in the CSM in
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the risk adjustment in 2024 was accounted for by a model change involving a more conservative estimate of the uncertainty
\n
of claim costs related to hospitalisation.
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Note 5.6.6: New business (BBA/VFA)
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(in millions of EUR) (Re)insurance contracts issued (Re)insurance contracts acquired Total
Not onerous OnerousNot onerousOnerous
2024
Estimates of present value of cash outflows 2 942 625 0 0 3 567
Expected claims 2 645 593 0 0 3 238
Expected other insurance service expenses 151 19 0 0 170
Insurance acquisition cashflows 145 13 0 0 159
Estimates of present value of cash inflows -3 218 -614 0 0 -3 833
Risk adjustment for non-financial risk 29 3 0 0 32
Contractual service margin 248 \u2014 0 \u2014 248
Increase in insurance contract liabilities: loss component \u2014 14 \u2014 0 14
2023
Estimates of present value of cash outflows 1 194 212 0 0 1 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows -1 378 -207 0 0 -1 585
Risk adjustment for non-financial risk 16 2 0 0 18
Contractual service margin 166 - 0 0 166
Increase in insurance contract liabilities: loss component \u2013 7 \u2013 0 7
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\u2022 \u2018Estimates of present value of cash outflows\u2019 includes 866 million euros resulting from the surrender in 2024 of individual pension
\n
agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
\n
policyholders of the relevant contracts were given the opportunity to invest in unit-linked products. The net impact of this
\n
migration on the CSM is a 96-million-euro increase (see also Note 5.6.2).
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\u2022 The sale of business with a loss component in 2024 was largely attributable to commercial campaigns in response to the
\n
Belgian state note maturing in September 2024. This new business was created with a market-driven competitive guaranteed
\n
interest rate (see also Note 4.1).
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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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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR) 1st year 2nd year 3rd year 4th year 5th year 6-10th year +10th year
2024
Life 153 145 138 132 126 548 1 023
Non-life 7 7 7 6 6 27 57
2023
Life 149 142 135 129 122 529 973
Non-life 6 6 6 6 5 24 51
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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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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Total (underlying) assets 30 414 967 4 204 1 845 36 463
At amortised cost 1 886 0 2 887 1 047 5 819
At FVOCI 11 753 15 1 221 593 13 568
Debt securities 10 698 15 993 373 12 064
Equity instruments 1 055 0 228 220 1 504
At FVPL (excl. derivatives) 16 666 951 0 8 16 673
Instruments backing unit-linked contracts 16 602 951 \u2014 \u2014 16 602
Other 64 0 0 8 71
At FVO 0 0 0 0 0
Property and equipment and investment property 109 0 97 198 403
2023
Total (underlying) assets 27 930 928 4 152 1 686 33 769
At amortised cost 1 9490 2 926 882 5 757
At FVOCI 11 490 15 1 158 590 13 238
Debt securities 10 441 15 933 386 11 759
Equity instruments1 050 0 225 204 1 479
At FVPL (excl. derivatives) 14 364 913 0 8 14 372
Instruments backing unit-linked contracts14 348 912 \u2013\u201314 348
Other16 1 0 8 24
At FVO 0 0 0 0 0
Property and equipment and investment property 127 0 68 207 401
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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) 20242023
OCI that may be recycled to P&L -26 340
Net change in revaluation reserve (FVOCI debt instruments) -26 340
Fair value adjustments before tax -33 446
Deferred tax on fair value changes 9 -108
Transfer from reserve to net result -1 2
Impairment -2 2
Net gains/losses on disposal 0 0
Deferred taxes 0 -1
OCI that will not be recycled to P&L 101 110
Net change in revaluation reserve (FVOCI equity instruments) 101 110
Fair value adjustments before tax 101 110
Deferred tax on fair value changes 0 0
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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
\n
maintaining the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between
\n
covering financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently
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the years thereafter until the portfolio subject to the transition approach reaches maturity.
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\u2022 See also \u2018Consolidated statement of comprehensive income\u2019.
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Note 5.7: Provisions for risks and charges
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Note 5.7.1: Overview
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(in millions of EUR) 31-12-202431-12-2023
Total provisions for risks and charges 141 183
Provisions for off-balance-sheet commitments and financial guarantees 73 91
Provisions for other risks and charges 69 92
Provisions for restructuring 22 37
Provisions for taxes and pending legal disputes 31 37
Other 17 18
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Note 5.7.2: Details of off-balance-sheet commitments and financial guarantees
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Subject to
Subject to 12-Subject to lifetime ECL \u2013
(in millions of EUR) month ECLlifetime ECL non-performingTotal
31-12-2024
Provisions on 1 January 22 20 49 91
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL) -1 5 2 6
Stage 2 (lifetime ECL) 1 -9 3 -5
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 1 -5 -4
New financial assets 5 1 1 8
Changes in risk parameters during the reporting period -6 -1 -13 -21
Changes in the model or methodology 2 0 -1 1
Derecognised financial assets -3 -1 -2 -6
Other 0 0 0 0
Movements without an impact on results
Derecognised financial assets 0 0 0 0
Changes in the scope of consolidation 0 -1 0 -1
Other 2 0 1 3
Provisions on 31 December 22 15 36 73
31-12-2023
Provisions on 1 January 19 35 60 114
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
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\u2022 Also see Note 6.1.
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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,
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\u2018possible outflow\u2019 or \u2018remotely probable outflow\u2019). Provisions are set aside for \u2018probable outflow\u2019 cases (see \u2018Notes on the
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accounting policies\u2019). No provisions are constituted for \u2018possible outflow\u2019 cases, but information is provided in the financial
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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
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minor or no risk at all do not have to be reported. The most important cases are listed below. The information provided is
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limited in order not to prejudice the position of the group in ongoing litigation.
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- 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
(Court of Appeals for the Second Circuit) 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
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. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the
\n
amended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden
\n
of proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may
\n
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

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Note 5.9: Retirement benefit obligations
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 31-12-202431-12-2023
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period 2 724 2 580
Current service cost 105 95
Interest cost 89 104
Actuarial gain or loss resulting from changes in demographic assumptions 0 -3
Actuarial gain or loss resulting from changes in financial assumptions -76 152
Experience adjustments 29 -56
Past-service cost 0 0
Benefits paid -190 -149
Other 3 0
Defined benefit obligations at the end of the period 2 684 2 724
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period 2 936 2 746
Actual return on plan assets 198 222
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 96 115
Employer contributions 97 93
Plan participant contributions 20 20
Benefits paid -190 -149
Other 9 5
Fair value of plan assets at the end of the period 3 070 2 936
of which financial instruments issued by the group 0 0
of which property occupied by KBC 2 2
Funded status
Plan assets in excess of defined benefit obligations 386 212
Reimbursement rights 0 0
Asset ceiling limit -131 -70
Unfunded accrued/prepaid pension cost 255 142
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period 142 153
Amounts recognised in the income statement -82 -65
Amounts recognised in other comprehensive income 92 -43
Employer contributions 97 93
Other 6 4
Unfunded accrued/prepaid pension cost at the end of the period 255 142
Amounts recognised in the income statement -82 -65
Current service cost -105 -95
Interest cost 5 10
Plan participant contributions 20 20
Other -2 0
Changes to the amounts recognised in other comprehensive income 92 -43
Actuarial gain or loss resulting from changes in demographic assumptions 0 3
Actuarial gain or loss resulting from changes in financial assumptions 76 -152
Actuarial result on plan assets 102 107
Experience adjustments -29 56
Adjustments to asset ceiling limits -59 1
Other 1 -58
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans -14 -18
\n\n\n\n\n
\n

\n
\n

\n\n\n\n\n\n\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
2024, 48% of employees were active participants in the defined benefit plan and 52% in the defined contribution plan (the
\n
corresponding figures at year-end 2023 were 52% and 48%).
\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

\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 (31-12-2024)
Equity instruments 33%
Bonds 53%
Real estate 13%
Cash 0%
of which illiquid assets 17%
Composition (31-12-2023)
Equity instruments 31%
Bonds 55%
Real estate 13%
Cash 1%
of which illiquid assets 17%
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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
Contributions expected in 2025 (in millions of EUR) 34
Regulatory framework Pension 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 KBC Investment risk and inflation risk.
ALM policy The hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps.
The return portfolio aims to generate an extra return.
Plan amendments A 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. New employees are signed up to the employer-funded defined contribution
plan.
Curtailments and settlements Not applicable.
Discounting method Based 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
xAverage discount rate 3.10%
xExpected rate of salary increase 2.47%
xExpected inflation rate 2.16%
xExpected rate of increase in pensions \u2013
xWeighted average duration of the obligations 10 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2024 consequent on:
xa decrease of 1% in the discount rate 10.98%
xan increase of 1% in the expected inflation rate 8.69%
xan increase that is 1% higher than the expected real 11.54%
increase in salary
xan 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.
Additional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund
Contributions expected in 2025 (in millions of EUR) 51
Regulatory framework Pursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of
2.50% on employee and employer contributions in 2025.
Risks for KBC Investment risk.
Valuation Retirement 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 method Based 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
xAverage discount rate 3.30%
xWeighted average duration of the obligations 15 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2024 consequent on:
xa decrease of 1% in the discount rate 17.99%
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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
(in millions of EUR) 31-12-202431-12-2023
Nominal ProvisionNet exposureNominal ProvisionNet exposure
amount amount
Undrawn portion of credit lines granted
Stage 1 45 481 18 45 463 41 551 20 41 531
Stage 2 3 314 9 3 305 6 683 14 6 670
Stage 3 52 2 50 79 5 73
Total 48 848 30 48 818 48 313 39 48 274
of which irrevocable credit lines 29 180 10 29 170 27 856 23 27 833
Financial guarantees given
Stage 1 10 245 3 10 242 7 860 2 7 859
Stage 2 992 5 987 2 952 6 2 947
Stage 3 113 32 80 133 44 90
Total 11 350 41 11 309 10 946 51 10 895
Other commitments given
Total 1 101 2 1 099 1 421 1 1 420
Off-balance-sheet commitments and financial
guarantees
Total 61 299 73 61 226 60 680 91 60 589
\n\n\n\n
\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 40 924 million euros for liabilities and
\n
1 667 million euros for contingent liabilities (36 842 million euros and 4 489 million euros in 2023). At year-end 2024, some
\n
21.8 billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the
\n
special estate of the covered bond programme (18.9 billion euros at year-end 2023).
\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 2024 (3 million euros in 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
Collateral received (which may be sold or repledged Fair value of collateral sold or
in the absence of default by the owner) (in millions of EUR) Fair value of collateral received repledged
31-12-202431-12-202331-12-202431-12-2023
Financial assets 32 091 42 215 12 279 5 267
Equity instruments 30 21 2 2
Debt securities 31 809 41 959 12 277 5 265
Loans and advances 252 235 0 0
Cash 0 0 0 0
Other 0 0 0 0
\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: i) the amount of cash collateral is recognised as a financial asset and
\n
ii) 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 its 2023 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 amount of 90 million euros is deducted in the calculation of the common equity capital.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag937": { "value": "\n

\n
Note 3.4: Net fee and commission income
\n
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(in millions of EUR) 20242023
Total 2 578 2 349
Fee and commission income 3 253 2 991
Fee and commission expense -675-642
Breakdown by type
Asset management services 1 421 1 247
Fee and commission income 1 478 1 305
Fee and commission expense -57-59
Banking services 1 1081 057
Fee and commission income 1 721 1 632
Fee and commission expense -613-575
Other 49 45
Fee and commission income 54 53
Fee and commission expense -5-8
\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
\n
rate calculations).
\n

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\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag940": { "value": "\n

\n\n

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Note 3.5: Net other income
\n
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(in millions of EUR) 20242023
Total 181656
of which gains or losses on
Sale of financial assets measured at amortised cost -36-22
Sale of FVOCI debt instruments 2-7
Repurchase of financial liabilities measured at amortised cost 00
Other, including: 215685
Income from operational leasing activities 120101
Income from VAB Group 4739
Legal disputes -28-2
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios 0405
Gain on sale of a participation in Belgium 018
Recovery of Belgian bank and insurance tax from 2016 (incl. moratorium interest) 048
\n\n\n\n\n\n\n\n\n
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios in 2023, see Note 6.6.
\n
\u2022
\n
Legal disputes: in 2024, this item mainly concerned Hungary.
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\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag941": { "value": "\n

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Note 3.5: Net other income
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(in millions of EUR) 20242023
Total 181656
of which gains or losses on
Sale of financial assets measured at amortised cost -36-22
Sale of FVOCI debt instruments 2-7
Repurchase of financial liabilities measured at amortised cost 00
Other, including: 215685
Income from operational leasing activities 120101
Income from VAB Group 4739
Legal disputes -28-2
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios 0405
Gain on sale of a participation in Belgium 018
Recovery of Belgian bank and insurance tax from 2016 (incl. moratorium interest) 048
\n\n\n\n\n\n\n\n\n
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios in 2023, see Note 6.6.
\n
\u2022
\n
Legal disputes: in 2024, this item mainly concerned Hungary.
\n

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\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag942": { "value": "\n
Note 3.5: Net other income
\n
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(in millions of EUR) 20242023
Total 181656
of which gains or losses on
Sale of financial assets measured at amortised cost -36-22
Sale of FVOCI debt instruments 2-7
Repurchase of financial liabilities measured at amortised cost 00
Other, including: 215685
Income from operational leasing activities 120101
Income from VAB Group 4739
Legal disputes -28-2
Gain on sale of KBC Bank Ireland\u2019s loan and deposit portfolios 0405
Gain on sale of a participation in Belgium 018
Recovery of Belgian bank and insurance tax from 2016 (incl. moratorium interest) 048
\n\n\n\n\n\n\n\n\n
\n
\u2022 For information on the gain on the sale of KBC Bank Ireland\u2019s loan and deposit portfolios in 2023, see Note 6.6.
\n
\u2022
\n
Legal disputes: in 2024, this item mainly concerned Hungary.
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
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etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
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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
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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
\n
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 2024.
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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 specified in that section.
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\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
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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
\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
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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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Fair value of financial instruments that are not measured at fair value Financial assets at amortised Financial liabilities at amortised
in the balance sheet cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
\n
losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
\n
collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
\n
large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
\n
which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
\n
are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
\n
purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
\n
risks?\u2019 section.
\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
\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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
\n
(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
\n
end 2024 (2 808 million euros at year-end 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", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag943": { "value": "\n

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Note 3.6: Insurance results
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Note 3.6.1: Insurance profitability \u2013 P&L
\n
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\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.
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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
\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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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
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\u2022 The column \u2018of which Life direct participation (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:
\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 insurance contracts measured under the VFA, which represents the
\n
change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
\n
in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
\n
P&L\u2019 (see also Note 3.3).
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\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
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in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
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(i.e. mainly interest income from bonds) and income tax.
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\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
\n
euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
\n
level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
\n
an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
\n
respectively, in 2023).
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Note 3.6.2: Insurance profitability \u2013 other comprehensive income (OCI)
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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Investment result (OCI) on financial assets at FVOCI 74 0 -1 30 103
Change in Insurance finance income and expense \u2013 OCI, before -199 0 -26 \u2014 -225
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -199 0 -26 \u2014 -224
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 0 0 \u2014 \u2014 0
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI -125 0 -26 30 -122
Change in reinsurance finance income and expense \u2013 OCI 0 \u2014 0 \u2014 0
Deferred taxes \u2014 \u2014 \u2014 75 75
Net insurance and investment result after reinsurance, after tax \u2013 OCI -125 0 -26 104 -47
2023
Investment result (OCI) on financial assets at FVOCI 594 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 82
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7 \u2014 7
Deferred taxes \u2014\u2014 \u20141313
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 33 13 102
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\u2022 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the
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\u2018Effect of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019.
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\u2022 For more information on the investment result and the change in insurance finance income and expense: see \u2018Other
\n
comprehensive income\u2019.
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\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 2024 and 2023
\n
were 40 million euros and 24 million euros, respectively, at insurance level of the 47 million euros and 21 million euros at group
\n
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) 20242023
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 472 432 39 406 370 36
Amounts related to changes in liabilities for remaining coverage 447 408 38 390 355 35
Expected claims and other insurance service expenses 262 232 29 226 200 25
Change in risk adjustment for risk expired (non-financial risk) 14 13 2 15 11 3
CSM recognised for services provided 170 163 7 150 143 6
Recovery of insurance acquisition cashflows 25 24 1 16 15 1
Insurance revenues for contracts measured using the PAA 2 483 31 2 452 2 284 30 2 255
Total insurance revenues 2 955 463 2 492 2 690 400 2 290
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Note 3.6.4: Life insurance sales
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(in millions of EUR) 20242023
Total 2 906 2 328
IFRS 17 \u2013 non-unit-linked 1 214 975
IFRS 17 \u2013 unit-linked 158 171
IFRS 17 \u2013 hybrid 197 131
Non-IFRS 17 1 337 1 051
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\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.
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\u2022 Hybrid products: see Note 5.6.1.
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\u2022 Sales of life insurance products in 2024 went up by 25% compared to 2023, largely driven by unit-linked insurance contracts
\n
in Belgium (non-IFRS 17) as well as by further growth in non-unit-linked insurance contracts (mainly in Belgium).
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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
Insurance
finance
income and Net result
expense from
Insurance before Total reinsurance Total
Insurance service reinsurance before contracts after
(in millions of EUR) revenues expenses in P&L reinsuranceheld reinsurance
2024
Personal insurance 308 -243 -8 57 \u2014 \u2014
Motor Third-Party Liability (MTPL) 594 -578 -19 -3 \u2014 \u2014
Liabilities other than MTPL 154 -139 -6 9 \u2014 \u2014
Casco 467 -430 -2 35 \u2014 \u2014
Property incl. other than casco 952 -789 -11 152 \u2014 \u2014
Total primary business 2 474 -2 179 -46 249 -7 242
Accepted reinsurance 18 -3 1 16 -6 10
Total 2 492 -2 181 -45 265 -13 252
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 business 2 272 -1 870 -31 371 -33 338
Accepted reinsurance 18 -2 0 17 -54 -38
Total 2 290 -1 872 -30 388 -87 301
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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) 20242023
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 20 20 \u2014 \u201400\u2014\u2014
Insurance contract liabilities 13 925 57 12 899 969 13 862 55 12 878 928
LRC (liability for remaining coverage) 13 718 2 12 769 948 13 674 2 12 762 910
Unit-linked 823 0 \u2014 823 798 0 \u2014 798
Non-unit-linked 11 931 2 11 929 \u2014 12 651 2 12 650 \u2014
Hybrid 964 0 840 125 225 0 112 112
Accepted reinsurance 0 0 0 0 0 0 0 0
LIC (liability for incurred claims) 207 55 130 22 188 53 116 18
Unit-linked 19 0 \u2014 19 13 0 \u2014 13
Non-unit-linked 168 55 112 \u2014 153 53 99 \u2014
Hybrid 21 0 18 3 21 0 17 4
Accepted reinsurance 0 0 0 0 0 0 0 0
Assets for acquisition cost 0 0 0 0 0 0 0 0
Non-life
Reinsurance assets 98 98 \u2014 \u2014 64 64 \u2014\u2014
Insurance contract liabilities 3 186 2 971 214 \u2014 2 922 2 716 206 \u2014
LRC (liability for remaining coverage) 744 547 196 \u2014 701 512 190 \u2014
Personal insurance 211 14 196 \u2014 205 16 190 \u2014
Motor Third-Party Liability (MTPL) 156 156 \u2014 \u2014 160 160 \u2014\u2014
Liabilities other than MTPL 25 25 \u2014 \u2014 25 25 \u2014\u2014
Casco 118 118 \u2014 \u2014 96 96 \u2014\u2014
Property other than casco 234 234 \u2014 \u2014 216 216 \u2014\u2014
Accepted reinsurance -1 -1 0 \u2014 0 0 0 \u2014
LIC (liability for incurred claims) 2 442 2 424 18 \u2014 2 220 2 204 16 \u2014
Personal insurance 656 638 18 \u2014 610 594 16 \u2014
Motor Third-Party Liability (MTPL) 935 935 \u2014 \u2014 863 863 \u2014\u2014
Liabilities other than MTPL 401 401 \u2014 \u2014 357 357 \u2014\u2014
Casco 66 66 \u2014 \u2014 53 53 \u2014\u2014
Property other than casco 364 364 \u2014 \u2014 319 319 \u2014\u2014
Accepted reinsurance 20 20 0 \u2014 18 18 0 \u2014
Assets for acquisition cost 0 0 0 \u2014 0 0 0 \u2014
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\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).
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\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
\n
key 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
\n
standard mortality tables and adapted where necessary to reflect the group\u2019s own experience.
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- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and
\n
associated overhead expenses which are considered directly attributable. Expenses are considered directly attributable
\n
if they are 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
\n
is entered into and the applicable terms and conditions) and the country, making it impossible to quantify these
\n
assumptions 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
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costs, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors
\n
such as court awards, legislation and discounting.
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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
\n
the individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate
\n
level of service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits
\n
provided for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting
\n
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
\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.
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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
\n
risk, from the unit-linked to the non-unit-linked component and vice versa.
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\u2022 Non-life LRC BBA (196 million euros in 2024, 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 (638 million euros in 2024, 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.
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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
\n
movements in reinsurance contract assets are limited.
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\u2022 Current account transactions with intermediaries and reinsurers are not included in the measurement of insurance liabilities
\n
but treated as a separate asset measured under IFRS 9.
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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 Solvency II volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other
\n
liabilities for which bottom-up curves are used).
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Yield curve used to discount cashflows not varying based on underlying items; bottom-up method (forward rates)
CurrencyIlliquidity premiumPortfolio duration
1 year 5 years 10 years 20 years
2024
EUR with volatility adjustment 1.91% 2.61% 2.84% 2.14%
without volatility adjustment 1.67% 2.37% 2.60% 1.91%
CZK with volatility adjustment 4.01% 3.93% 4.30% 4.20%
without volatility adjustment 3.84% 3.76% 4.12% 4.03%
HUFwith volatility adjustment6.92% 6.93% 7.39% 6.55%
without volatility adjustment 6.84% 6.85% 7.30% 6.48%
BGN with volatility adjustment 1.94% 2.58% 2.83% 2.19%
without volatility adjustment 1.78% 2.42% 2.67% 2.03%
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment 2.92% 2.29% 2.74% 2.13%
CZK with volatility adjustment 4.83% 3.19% 3.70% 3.98%
without volatility adjustment 4.67%3.03% 3.54% 3.82%
HUF with volatility adjustment 5.55% 5.25% 6.29% 5.49%
without volatility adjustment 5.44% 5.14% 6.18% 5.38%
BGN with volatility adjustment 3.16% 2.50% 3.00% 2.43%
without volatility adjustment 2.84% 2.18%2.68% 2.11%
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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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured PAA
under PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 13 667 7 134 50 3 13 862
Insurance service result -435 24 225 19 0 -168
Insurance revenues -463 \u2014 \u2014 \u2014 \u2014 -463
BBA + VFA by transition method -432 \u2014 \u2014 \u2014 \u2014 -432
Modified retrospective approach -9 \u2014 \u2014 \u2014 \u2014 -9
Fair value approach -280 \u2014 \u2014 \u2014 \u2014 -280
Other -143 \u2014 \u2014 \u2014 \u2014 -143
PAA -31 \u2014 \u2014 \u2014 \u2014 -31
Insurance service expenses 28 24 225 19 0 296
Incurred claims (excl. repayments of investment components) \u2014 -2 156 14 1 169
Incurred costs other than claims 0 -2 99 3 0 100
Amortised acquisition expenses 28 \u2014 \u2014 \u2014 \u2014 28
Changes in fulfilment cashflows that relate to future service \u2013 loss on \u2014 28 \u2014 \u2014 \u2014 28
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 -29 1 -1 -29
Investment components -2 591 \u2014 2 591 \u2014 \u2014 0
Investment result 6 0 \u2014 \u2014 \u2014 6
Net result from financial instruments at fair value through profit or loss 6 0 \u2014 \u2014 \u2014 6
Insurance finance income and expense 490 1 2 2 0 495
In P&L 292 1 2 1 0 296
In OCI 198 0 0 1 0 199
Total changes in comprehensive income -2 529 25 2 818 20 0 334
Total cashflows 2 585 \u2014 -2 798 -19 \u2014 -232
Premiums received2 712 \u2014 \u2014 \u2014 \u2014 2 712
Claims paid \u2014 \u2014 -2 699 -16 \u2014 -2 715
Costs other than claims paid \u2014 \u2014 -99 -3 \u2014 -102
Acquisition costs paid -127 \u2014 \u2014 \u2014 \u2014 -127
Other -37 0 -2 0 0 -39
Closing balance 13 686 32 152 52 4 13 925
2023
Opening balance13 258 1012647313 444
Insurance service result -381 -2 218 16 1 -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 expenses 19-2218161251
Incurred claims (excl. repayments of investment components)\u2013-1156131169
Incurred costs other than claims0-7922\u201387
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 \u2013 1 284 \u2013 \u2013 0
Investment result 0 0 \u2014 \u2014 \u2014 0
Net result from financial instruments at fair value through profit or loss 0 0\u2014\u2014\u2014 0
Insurance finance income and expense 815 0 3 3 0 821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows 1 271 \u2013 -1 497 -16 \u2013 -242
Premiums received1 401 \u2013 \u2013 \u2013 \u2013 1 401
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 balance 13 667 7 134 50 3 13 862
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\u2022 In the transition from IFRS 4 to IFRS 17 on 1 January 2022, KBC applied the Full Retrospective Approach (FRA) for recent years.
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Applying the FRA for non-recent years was impracticable due to either a lack of historical data (data and hypotheses) or high
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costs associated with making information from the past available for FRA transition calculations. Where the FRA was
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impracticable, the Fair Value Approach (FVA) was predominantly used to determine the CSM on the transition date. The
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Modified Retrospective Approach (MRA) was rarely applied as this transition approach was overly complex and the costs did
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not outweigh the benefits. KBC calculated a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently
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adjusted a few assumptions or parameters. The adjustments related to the inclusion in the IFRS 13 fair value of total expenses,
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i.e. including non-directly attributable expenses, and to the inclusion of a risk premium that covers not only non-financial risk,
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but also system and integration expenses and capital funding costs. All past years were combined into a single cohort for the
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FVA transition calculations. The FVA CSM ensued from cost and risk margin differences under IFRS 17 and IFRS 13 measurement
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approaches. Due to the application of the FVA on the transition date in accordance with the transition exemptions provided
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in IFRS 17, the OCI amount was set at nil.
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\u2022 Movement in insurance liabilities in 2024:
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- Due to the further decrease in market interest rates during 2024, an expense in OCI of 199 million euros before tax is
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recognised as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance
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income and expense between P&L and OCI.
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- The movement in the investment component of 2 591 million euros from LRC to LIC indicates the amounts of contracts
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coming at maturity or lapsed and includes 866 million euros resulting from the surrender in 2024 of individual pension
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agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
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policyholders of the relevant contracts were given the opportunity to invest in unit-linked products.
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\u2022 Movement in insurance liabilities in 2023:
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- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised
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as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income
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and 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
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coming 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, and 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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured under
PAA
PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 700 1 16 1 964 240 2 922
Insurance service result -1 952 3 31 1 606 10 -303
Insurance revenues -2 482 \u2014 \u2014 \u2014 \u2014 -2 482
BBA by transition method -39 \u2014 \u2014 \u2014 \u2014 -39
Modified retrospective approach 0 \u2014 \u2014 \u2014 \u2014 0
Fair value approach -29 \u2014 \u2014 \u2014 \u2014 -29
Other -11 \u2014 \u2014 \u2014 \u2014 -11
PAA -2 443 \u2014 \u2014 \u2014 \u2014 -2 443
Insurance service expenses 530 3 31 1 606 10 2 179
Incurred claims (excl. repayments of investment components) \u2014 -1 28 1 251 65 1 343
Incurred costs other than claims 0 0 3 232 0 236
Amortised acquisition expenses 529 \u2014 \u2014 \u2014 \u2014 529
Changes in fulfilment cashflows that relate to future service \u2013 loss \u2014 4 \u2014 \u2014 \u2014 4
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 0 122 -55 66
Investment components 0 \u2014 0 \u2014 \u2014 0
Insurance finance income and expense 7 0 0 58 7 72
In P&L 1 0 0 39 5 45
In OCI 6 0 0 18 2 26
Total changes in comprehensive income -1 945 3 31 1 664 17 -231
Total cashflows 1 991 \u2014 -29 -1 453 \u2014 509
Premiums received2 532 \u2014 \u2014 \u2014 \u2014 2 532
Claims paid \u2014 \u2014 -26 -1 222 \u2014 -1 248
Costs other than claims paid \u2014 \u2014 -3 -231 \u2014 -234
Acquisition costs paid -540 \u2014 \u2014 \u2014 \u2014 -540
Other -6 0 0 -6 -1 -14
Closing balance 740 4 182 168 256 3 186
2023
Opening balance6751141 8022222 714
Insurance service result -1 789 0 28 1 343 7 -410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach 0\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 expenses 491 0 28 1 343 7 1 869
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 components 0 \u2013 0 \u2013 \u2013 0
Insurance finance income and expense -48 0 1 89 12 54
In P&L00027430
In OCI-480063824
Total changes in comprehensive income -1 837 0 29 1 433 19 -356
Total cashflows 1 862 \u2013 -27 -1 288 \u2013 547
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
Other 10017018
Closing balance 700 1 16 1 964 240 2 922
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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
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costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
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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
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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
of future Risk Total insurance
cashflows adjustment contract
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin liabilities
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
2024
Opening balance 11 538 152 47 1 387 683 13 807
Insurance service result -212 41 -2 -125 138 -159
Changes that relate to future service -201 53 4 -11 182 28
New business -245 29\u2013\u2013 230 14
Changes in estimates reflected in the CSM 32 23 4-11-48 0
Changes in estimates that result in onerous contract 13 1\u2013\u2013\u2013 14
losses and reversals
Changes that relate to current service 16 -9 -5 -114 -44 -157
CSM recognised in P&L 0--5-114-44-163
Changes in the risk adjustment (expected) 0-9\u2013\u2013\u2013-9
Experience adjustments 16-\u2013\u2013\u2013 16
Changes to liabilities for incurred claims related to past -27 -3 \u2013 \u2013 \u2013 -29
service
Investment result 6 - \u2013 \u2013 \u2013 6
Net result from financial instruments at fair value through P&L 6-\u2013\u2013\u2013 6
Insurance finance income and expense 466 4 1 10 13 493
In P&L 269 3 1 10 13 295
In OCI 197 1--- 198
Total changes in comprehensive income 260 44 -1 -115 151 341
Total cashflows -241\u2013 \u2013 \u2013 \u2013 -241
Premiums received 2 681\u2013\u2013\u2013\u20132 681
Claims paid -2 699\u2013\u2013\u2013\u2013-2 699
Costs other than claims paid -99\u2013\u2013\u2013\u2013-99
Acquisition costs paid -124\u2013\u2013\u2013\u2013-124
Other changes -28 -1 -3 -4 -3 -39
Closing balance 11 529 195 43 1 268 832 13 868
2023
Opening balance11 378112451 37748013 393
Insurance service result -390 47 -1 8 198 -139
Changes that relate to future service -399 56 4 120 224 5
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
Investment result 0 \u2013 \u2013 \u2013 \u2013 0
Net result from financial instruments at fair value through P&L0\u2013\u2013\u2013\u20130
Insurance finance income and expense 809 -7 1 9 7 818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income 418 40 0 16 205 679
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 -1 2 -6 -1 -14
Closing balance 11 538 152 47 1 387 683 13 807
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
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- Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by
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the insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity
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of the benefits provided to the policyholder under a contract and its expected coverage period.
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- Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected
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to be provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current
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period.
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\u2022 Main movements in 2024 and 2023: the 43-million-euro increase in the risk adjustment in 2024 is mostly related to a model
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change to take into account the risk that clients stop paying premiums for long-term life insurance contracts. The movement
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of the contractual service margin in 2024, under \u2018New business\u2019, includes a 96-million-euro increase related to the migration
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of individual pension agreements from the \u2018Risk and Savings\u2019 portfolio to the \u2018Hybrid products\u2019 portfolio (see also Note 5.6.2).
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There were no material changes in 2023.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value
of future Risk
cashflows adjustment Total insurance
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin contract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2024
Opening balance 8 71 52 74 206
Insurance service result -72 60 -21 26 -7
Changes that relate to future service -74 62 -19 31 0
New business -21 3 \u2014 18 0
Changes in estimates reflected in the CSM -52 58 -19 13 0
Changes in estimates that result in onerous contract 0 0 \u2014 \u2014 0
losses and reversals
Changes that relate to current service 1 -1 -2 -5 -7
CSM recognised in P&L \u2014 \u2014 -2 -5 -7
Changes in the risk adjustment (expected) \u2014 -1 \u2014 \u2014 -1
Experience adjustments 1 \u2014 \u2014 \u2014 1
Changes to liabilities for incurred claims related to past 0 0 \u2014 \u2014 0
service
Insurance finance income and expense 15 -9 0 1 7
In P&L -1 1 0 1 1
In OCI 16 -10 \u2014 \u2014 6
Total changes in comprehensive income -57 51 -21 27 -1
Total cashflows 9 \u2014 \u2014 \u2014 9
Premiums received 46 \u2014 \u2014 \u2014 46
Claims paid -26 \u2014 \u2014 \u2014 -26
Costs other than claims paid -3 \u2014 \u2014 \u2014 -3
Acquisition costs paid -8 \u2014 \u2014 \u2014 -8
Other changes 0 0 0 0 0
Closing balance -40 122 31 101 214
2023
Opening balance17759367252
Insurance service result 11 16 -41 7 -7
Changes that relate to future service 9 19 -38 10 0
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 service 2 -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 -19 0 1 -48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income -17 -4 -41 7 -54
Total cashflows 8 \u2013 \u2013 \u2013 8
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 changes 0 0 0 0 0
Closing balance 8 71 52 74 206
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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 6-million-euro increase in 2024 is attributable to
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a slight decline in the yield curve. A typical feature of the hospitalisation portfolio is that interest rate movements have a
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greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums are levelled (constant \u2018cash in\u2019 during
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the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019 more towards the end of the contract).
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\u2022 The 52-million-euro drop in the present value of future cashflows for changes in estimates reflected in the CSM in 2024 is due
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to a model update in which expected higher claims result in higher premiums. A higher premium volume generates more future
\n
profit and, as a result, lower fulfilment cashflows. The 58-million-euro increase in changes in estimates reflected in the CSM in
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the risk adjustment in 2024 was accounted for by a model change involving a more conservative estimate of the uncertainty
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of claim costs related to hospitalisation.
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Note 5.6.6: New business (BBA/VFA)
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(in millions of EUR) (Re)insurance contracts issued (Re)insurance contracts acquired Total
Not onerous OnerousNot onerousOnerous
2024
Estimates of present value of cash outflows 2 942 625 0 0 3 567
Expected claims 2 645 593 0 0 3 238
Expected other insurance service expenses 151 19 0 0 170
Insurance acquisition cashflows 145 13 0 0 159
Estimates of present value of cash inflows -3 218 -614 0 0 -3 833
Risk adjustment for non-financial risk 29 3 0 0 32
Contractual service margin 248 \u2014 0 \u2014 248
Increase in insurance contract liabilities: loss component \u2014 14 \u2014 0 14
2023
Estimates of present value of cash outflows 1 194 212 0 0 1 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows -1 378 -207 0 0 -1 585
Risk adjustment for non-financial risk 16 2 0 0 18
Contractual service margin 166 - 0 0 166
Increase in insurance contract liabilities: loss component \u2013 7 \u2013 0 7
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\u2022 \u2018Estimates of present value of cash outflows\u2019 includes 866 million euros resulting from the surrender in 2024 of individual pension
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agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
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policyholders of the relevant contracts were given the opportunity to invest in unit-linked products. The net impact of this
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migration on the CSM is a 96-million-euro increase (see also Note 5.6.2).
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\u2022 The sale of business with a loss component in 2024 was largely attributable to commercial campaigns in response to the
\n
Belgian state note maturing in September 2024. This new business was created with a market-driven competitive guaranteed
\n
interest rate (see also Note 4.1).
\n

\n\n\n\n\n\n\n\n\n\n\n
Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (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
CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR) 1st year 2nd year 3rd year 4th year 5th year 6-10th year +10th year
2024
Life 153 145 138 132 126 548 1 023
Non-life 7 7 7 6 6 27 57
2023
Life 149 142 135 129 122 529 973
Non-life 6 6 6 6 5 24 51
\n\n\n\n\n
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\u2022 The table shows the future CSM recognition for the next 25 years.
\n

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Note 5.6.8: Fair value of assets backing insurance and investment contracts
\n
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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Total (underlying) assets 30 414 967 4 204 1 845 36 463
At amortised cost 1 886 0 2 887 1 047 5 819
At FVOCI 11 753 15 1 221 593 13 568
Debt securities 10 698 15 993 373 12 064
Equity instruments 1 055 0 228 220 1 504
At FVPL (excl. derivatives) 16 666 951 0 8 16 673
Instruments backing unit-linked contracts 16 602 951 \u2014 \u2014 16 602
Other 64 0 0 8 71
At FVO 0 0 0 0 0
Property and equipment and investment property 109 0 97 198 403
2023
Total (underlying) assets 27 930 928 4 152 1 686 33 769
At amortised cost 1 9490 2 926 882 5 757
At FVOCI 11 490 15 1 158 590 13 238
Debt securities 10 441 15 933 386 11 759
Equity instruments1 050 0 225 204 1 479
At FVPL (excl. derivatives) 14 364 913 0 8 14 372
Instruments backing unit-linked contracts14 348 912 \u2013\u201314 348
Other16 1 0 8 24
At FVO 0 0 0 0 0
Property and equipment and investment property 127 0 68 207 401
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
\n
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
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 20242023
OCI that may be recycled to P&L -26 340
Net change in revaluation reserve (FVOCI debt instruments) -26 340
Fair value adjustments before tax -33 446
Deferred tax on fair value changes 9 -108
Transfer from reserve to net result -1 2
Impairment -2 2
Net gains/losses on disposal 0 0
Deferred taxes 0 -1
OCI that will not be recycled to P&L 101 110
Net change in revaluation reserve (FVOCI equity instruments) 101 110
Fair value adjustments before tax 101 110
Deferred tax on fair value changes 0 0
\n\n\n\n\n
\n
\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while
\n
maintaining the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between
\n
covering financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently
\n
the years thereafter until the portfolio subject to the transition approach reaches maturity.
\n
\u2022 See also \u2018Consolidated statement of comprehensive income\u2019.
\n

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\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag946": { "value": "\n

\n\n

\n\n

\n\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\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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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
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\u2022 The column \u2018of which Life direct participation (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 insurance contracts measured under the VFA, which represents the
\n
change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
\n
in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
\n
P&L\u2019 (see also Note 3.3).
\n
\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
\n
in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
\n
(i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
\n
euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
\n
level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
\n
an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
\n
respectively, in 2023).
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Note 3.6.4: Life insurance sales
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(in millions of EUR) 20242023
Total 2 906 2 328
IFRS 17 \u2013 non-unit-linked 1 214 975
IFRS 17 \u2013 unit-linked 158 171
IFRS 17 \u2013 hybrid 197 131
Non-IFRS 17 1 337 1 051
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\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
\u2022 Sales of life insurance products in 2024 went up by 25% compared to 2023, largely driven by unit-linked insurance contracts
\n
in Belgium (non-IFRS 17) as well as by further growth in non-unit-linked insurance contracts (mainly in Belgium).
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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) revenues expenses in P&L reinsuranceheld reinsurance
2024
Personal insurance 308 -243 -8 57 \u2014 \u2014
Motor Third-Party Liability (MTPL) 594 -578 -19 -3 \u2014 \u2014
Liabilities other than MTPL 154 -139 -6 9 \u2014 \u2014
Casco 467 -430 -2 35 \u2014 \u2014
Property incl. other than casco 952 -789 -11 152 \u2014 \u2014
Total primary business 2 474 -2 179 -46 249 -7 242
Accepted reinsurance 18 -3 1 16 -6 10
Total 2 492 -2 181 -45 265 -13 252
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 business 2 272 -1 870 -31 371 -33 338
Accepted reinsurance 18 -2 0 17 -54 -38
Total 2 290 -1 872 -30 388 -87 301
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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", "dimensions": { "concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag947": { "value": "\n

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Note 3.6.1: Insurance profitability \u2013 P&L
\n
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\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.
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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
\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-
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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
\n
statement and related notes.
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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
\n\n\n\n\n\n\n\n\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\u2022 The column \u2018of which Life direct participation (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 insurance contracts measured under the VFA, which represents the
\n
change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
\n
in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
\n
P&L\u2019 (see also Note 3.3).
\n
\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
\n
in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
\n
(i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
\n
euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
\n
level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
\n
an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
\n
respectively, in 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
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
Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Investment result (OCI) on financial assets at FVOCI 74 0 -1 30 103
Change in Insurance finance income and expense \u2013 OCI, before -199 0 -26 \u2014 -225
reinsurance
Effect of changes in interest rates and other financial assumptions in OCI, -199 0 -26 \u2014 -224
incl. foreign exchange differences
Changes in fair value of underlying liabilities of contracts measured under 0 0 \u2014 \u2014 0
VFA \u2013 OCI
Net insurance and investment result before reinsurance \u2013 OCI -125 0 -26 30 -122
Change in reinsurance finance income and expense \u2013 OCI 0 \u2014 0 \u2014 0
Deferred taxes \u2014 \u2014 \u2014 75 75
Net insurance and investment result after reinsurance, after tax \u2013 OCI -125 0 -26 104 -47
2023
Investment result (OCI) on financial assets at FVOCI 594 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 82
Change in reinsurance finance income and expense \u2013 OCI 0\u2014 7 \u2014 7
Deferred taxes \u2014\u2014 \u20141313
Net insurance and investment result after reinsurance, after tax \u2013 OCI 56 0 33 13 102
\n\n\n\n\n\n\n\n\n
\n
\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 Note that there is a (partial) compensating effect between \u2018Investment result (OCI) on financial assets at FVOCI\u2019 and the
\n
\u2018Effect of changes in interest rates and other financial assumptions in OCI, incl. foreign exchange differences\u2019.
\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 2024 and 2023
\n
were 40 million euros and 24 million euros, respectively, at insurance level of the 47 million euros and 21 million euros at group
\n
level.
\n

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

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

\n\n\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 3.6.5: Non-life insurance profitability by product (P&L)
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) revenues expenses in P&L reinsuranceheld reinsurance
2024
Personal insurance 308 -243 -8 57 \u2014 \u2014
Motor Third-Party Liability (MTPL) 594 -578 -19 -3 \u2014 \u2014
Liabilities other than MTPL 154 -139 -6 9 \u2014 \u2014
Casco 467 -430 -2 35 \u2014 \u2014
Property incl. other than casco 952 -789 -11 152 \u2014 \u2014
Total primary business 2 474 -2 179 -46 249 -7 242
Accepted reinsurance 18 -3 1 16 -6 10
Total 2 492 -2 181 -45 265 -13 252
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 business 2 272 -1 870 -31 371 -33 338
Accepted reinsurance 18 -2 0 17 -54 -38
Total 2 290 -1 872 -30 388 -87 301
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

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

\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 5.6.1: 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
(in millions of EUR) 20242023
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 20 20 \u2014 \u201400\u2014\u2014
Insurance contract liabilities 13 925 57 12 899 969 13 862 55 12 878 928
LRC (liability for remaining coverage) 13 718 2 12 769 948 13 674 2 12 762 910
Unit-linked 823 0 \u2014 823 798 0 \u2014 798
Non-unit-linked 11 931 2 11 929 \u2014 12 651 2 12 650 \u2014
Hybrid 964 0 840 125 225 0 112 112
Accepted reinsurance 0 0 0 0 0 0 0 0
LIC (liability for incurred claims) 207 55 130 22 188 53 116 18
Unit-linked 19 0 \u2014 19 13 0 \u2014 13
Non-unit-linked 168 55 112 \u2014 153 53 99 \u2014
Hybrid 21 0 18 3 21 0 17 4
Accepted reinsurance 0 0 0 0 0 0 0 0
Assets for acquisition cost 0 0 0 0 0 0 0 0
Non-life
Reinsurance assets 98 98 \u2014 \u2014 64 64 \u2014\u2014
Insurance contract liabilities 3 186 2 971 214 \u2014 2 922 2 716 206 \u2014
LRC (liability for remaining coverage) 744 547 196 \u2014 701 512 190 \u2014
Personal insurance 211 14 196 \u2014 205 16 190 \u2014
Motor Third-Party Liability (MTPL) 156 156 \u2014 \u2014 160 160 \u2014\u2014
Liabilities other than MTPL 25 25 \u2014 \u2014 25 25 \u2014\u2014
Casco 118 118 \u2014 \u2014 96 96 \u2014\u2014
Property other than casco 234 234 \u2014 \u2014 216 216 \u2014\u2014
Accepted reinsurance -1 -1 0 \u2014 0 0 0 \u2014
LIC (liability for incurred claims) 2 442 2 424 18 \u2014 2 220 2 204 16 \u2014
Personal insurance 656 638 18 \u2014 610 594 16 \u2014
Motor Third-Party Liability (MTPL) 935 935 \u2014 \u2014 863 863 \u2014\u2014
Liabilities other than MTPL 401 401 \u2014 \u2014 357 357 \u2014\u2014
Casco 66 66 \u2014 \u2014 53 53 \u2014\u2014
Property other than casco 364 364 \u2014 \u2014 319 319 \u2014\u2014
Accepted reinsurance 20 20 0 \u2014 18 18 0 \u2014
Assets for acquisition cost 0 0 0 \u2014 0 0 0 \u2014
\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
\n
key assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on
\n
standard mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and
\n
associated overhead expenses which are considered directly attributable. Expenses are considered directly attributable
\n
if they are 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
\n
assumptions for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling
\n
costs, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors
\n
such as court awards, legislation and discounting.
\n

\n\n\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
\n
the individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate
\n
level of service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits
\n
provided for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting
\n
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 (196 million euros in 2024, 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 (638 million euros in 2024, 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 Current account transactions with intermediaries and reinsurers are not included in the measurement of insurance liabilities
\n
but treated as a separate asset measured under IFRS 9.
\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 Solvency II volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other
\n
liabilities for which bottom-up curves are used).
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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
Yield curve used to discount cashflows not varying based on underlying items; bottom-up method (forward rates)
CurrencyIlliquidity premiumPortfolio duration
1 year 5 years 10 years 20 years
2024
EUR with volatility adjustment 1.91% 2.61% 2.84% 2.14%
without volatility adjustment 1.67% 2.37% 2.60% 1.91%
CZK with volatility adjustment 4.01% 3.93% 4.30% 4.20%
without volatility adjustment 3.84% 3.76% 4.12% 4.03%
HUFwith volatility adjustment6.92% 6.93% 7.39% 6.55%
without volatility adjustment 6.84% 6.85% 7.30% 6.48%
BGN with volatility adjustment 1.94% 2.58% 2.83% 2.19%
without volatility adjustment 1.78% 2.42% 2.67% 2.03%
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment 2.92% 2.29% 2.74% 2.13%
CZK with volatility adjustment 4.83% 3.19% 3.70% 3.98%
without volatility adjustment 4.67%3.03% 3.54% 3.82%
HUF with volatility adjustment 5.55% 5.25% 6.29% 5.49%
without volatility adjustment 5.44% 5.14% 6.18% 5.38%
BGN with volatility adjustment 3.16% 2.50% 3.00% 2.43%
without volatility adjustment 2.84% 2.18%2.68% 2.11%
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Note 5.6.6: New business (BBA/VFA)
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(in millions of EUR) (Re)insurance contracts issued (Re)insurance contracts acquired Total
Not onerous OnerousNot onerousOnerous
2024
Estimates of present value of cash outflows 2 942 625 0 0 3 567
Expected claims 2 645 593 0 0 3 238
Expected other insurance service expenses 151 19 0 0 170
Insurance acquisition cashflows 145 13 0 0 159
Estimates of present value of cash inflows -3 218 -614 0 0 -3 833
Risk adjustment for non-financial risk 29 3 0 0 32
Contractual service margin 248 \u2014 0 \u2014 248
Increase in insurance contract liabilities: loss component \u2014 14 \u2014 0 14
2023
Estimates of present value of cash outflows 1 194 212 0 0 1 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows -1 378 -207 0 0 -1 585
Risk adjustment for non-financial risk 16 2 0 0 18
Contractual service margin 166 - 0 0 166
Increase in insurance contract liabilities: loss component \u2013 7 \u2013 0 7
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\u2022 \u2018Estimates of present value of cash outflows\u2019 includes 866 million euros resulting from the surrender in 2024 of individual pension
\n
agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
\n
policyholders of the relevant contracts were given the opportunity to invest in unit-linked products. The net impact of this
\n
migration on the CSM is a 96-million-euro increase (see also Note 5.6.2).
\n
\u2022 The sale of business with a loss component in 2024 was largely attributable to commercial campaigns in response to the
\n
Belgian state note maturing in September 2024. This new business was created with a market-driven competitive guaranteed
\n
interest rate (see also Note 4.1).
\n

\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag949": { "value": "\n
Note 3.6.1: Insurance profitability \u2013 P&L
\n
\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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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Insurance service result 168 10 310 \u2014 478
Insurance revenues before reinsurance 463 24 2 492 \u2014 2 955
Insurance service expenses-296 -14-2 181 \u2014 -2 477
Of which Non-life claim-related expenses \u2014 \u2014-1 416 \u2014 -1 416
Investment result and insurance finance income and expense 150 2 55 8 213
Investment result 446 92 100 8 554
Net interest income 325 0 91 1 417
Dividend income 22 0 4 7 34
Net result from financial instruments at fair value through profit or loss 92 92 0 0 92
Net other income 4 0 4 1 9
Impairment 2 0 1 0 2
Insurance finance income and expense, before reinsurance -296 -91-45 \u2014 -341
Interest accretion -204 \u2014-46 \u2014 -250
Effect of changes in financial assumptions and foreign exchange -2 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -91 -91\u2014 \u2014 -91
Net insurance and investment result before reinsurance 317 12 365 8 691
Net result from reinsurance contracts held -4 \u2014-13 \u2014 -17
Premiums paid to the reinsurer -36\u2014-121 \u2014 -157
Fee and commission income 9 \u2014 11 \u2014 20
Amounts recoverable from the reinsurer 23 \u2014 99 \u2014 122
Total reinsurance finance income and expense 0 \u2014-1 \u2014 -2
Net insurance and investment result after reinsurance 313 12 352 8 674
Non-directly attributable income or expenses 23 -2-56 16 -17
Net fee and commission income 75 0-2 28 102
Net other income \u2014 \u2014\u2014 80 80
Operating expenses (incl. bank and insurance tax) -51 -2-53 -91 -196
Impairment \u2013 other -1 0-1 0 -3
Share in results of associated companies and joint ventures \u2014 \u2014\u2014 0 0
Income tax expense \u2014 \u2014\u2014-142 -142
Result after tax 336 10 296 -117 515
attributable to minority interests \u2014 \u2014\u2014 \u2014 \u2014
attributable to equity holders of the parent \u2014 \u2014\u2014 \u2014 515
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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
Of which Life
direct
participation
(in millions of EUR)Life (VFA) Non-lifeNon-technicalTotal
2023
Insurance service result 149 12 418\u2014567
Insurance revenues before reinsurance 400 25 2 290 \u2014 2 690
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 63 19 233
Investment result 434 96 93 19 546
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
Net other 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 -1 0 1 \u2014 -1
differences
Changes in fair value of liabilities of IFRS 17 unit-linked contracts -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 11 -1 -508-31
Net fee and commission income 67 0 -2 24 90
Net other income \u2014 \u2014 \u20146868
Operating expenses (incl. bank and insurance tax) -48 -1 -48-83-179
Impairment \u2013 other -9 0 -10-10
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 308 11 344 -124 527
attributable to minority interests \u2014\u2014 \u2014\u20140
attributable to equity holders of the parent \u2014\u2014 \u2014\u2014527
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\u2022 The column \u2018of which Life direct participation (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 insurance contracts measured under the VFA, which represents the
\n
change in the fair value of unit-linked liabilities, measured under IFRS 17 (Variable Fee Approach), with the offsetting impact
\n
in the change in the fair value of underlying unit-linked assets in \u2018Net result from financial instruments at fair value through
\n
P&L\u2019 (see also Note 3.3).
\n
\u2022 \u2018Non-technical\u2019 includes the results from non-insurance subsidiaries, such as VAB Group and ADD. They have been included
\n
in 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\u2019). \u2018Non-technical\u2019 also includes the investment income from equity
\n
(i.e. mainly interest income from bonds) and income tax.
\n
\u2022 In 2024, the Non-life insurance service result was negatively impacted by higher Non-life claim-related expenses (-257 million
\n
euros). This was partly due to the impact of inflation, a sector-wide update of claims inflation on bodily injury claims, a higher
\n
level of standard claims and the increased impact of storms, mainly in the Czech Republic (storm Boris) and Belgium, having
\n
an impact of -133 million euros before reinsurance or -72 million euros after reinsurance (-29 million euros and -34 million euros,
\n
respectively, in 2023).
\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", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag964": { "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
(in millions of EUR) 20242023
TotalLifeNon-lifeTotalLifeNon-life
Insurance revenues for BBA and VFA contracts 472 432 39 406 370 36
Amounts related to changes in liabilities for remaining coverage 447 408 38 390 355 35
Expected claims and other insurance service expenses 262 232 29 226 200 25
Change in risk adjustment for risk expired (non-financial risk) 14 13 2 15 11 3
CSM recognised for services provided 170 163 7 150 143 6
Recovery of insurance acquisition cashflows 25 24 1 16 15 1
Insurance revenues for contracts measured using the PAA 2 483 31 2 452 2 284 30 2 255
Total insurance revenues 2 955 463 2 492 2 690 400 2 290
\n\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag970": { "value": "\n

\n\n

\n\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
(in millions of EUR) 20242023
Total -5 097 -5 125
Staff expenses -2 708 -2 677
General administrative expenses
ICT -641-634
Facility expenses -250-265
Marketing and communications -111-108
Professional service fees -142-144
Bank and insurance tax -623-687
Other -240-224
Depreciation and amortisation of fixed assets -382-386
\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 down by 1% in 2024 compared to 2023.
\n
- This amount includes 623 million euros in bank and insurance tax, a 9% decrease year-on-year. This was partly due to
\n
lower contributions to the resolution fund (after reaching the target level of 1% of the covered deposits for the Single
\n
Resolution Fund in 2023, no contributions were made by euro area countries and only limited contributions were made by
\n
non-euro area countries), a lower contribution to the deposit guarantee schemes (mainly in Belgium, due to a lower-than-
\n
anticipated volume of covered deposits), partly offset by additional national bank taxes in a number of countries (primarily
\n
in Belgium and Slovakia).
\n
- Expenses excluding bank and insurance tax increased by 1% to 4 474 million euros. This was mainly attributable to inflation-
\n
related pressure on wages and higher ICT and regulatory expenses, and was only partly offset by, among other things,
\n
the positive impact of the sale of the Irish portfolios and lower facility expenses.
\n
\u2022 Under \u2018Insurance service expenses\u2019, operating expenses are also allocated as \u2018directly attributable to insurance contracts\u2019.
\n
For 2024, the operating expenses that are \u2018directly attributable to insurance contracts\u2019 are comprised of approximately 39%
\n
staff expenses, 57% general administrative expenses and 4% depreciation and amortisation of fixed assets.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of
\n
the 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 2024, this resulted in the recognition of a limited employee benefit (3 million euros) as the
\n
issue price in 2024 was lower than the market price. Information regarding the price of the KBC share can be found in the
\n
\u2018Report of the Board of Directors\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\n\n\n\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag971": { "value": "\n

\n\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
(in millions of EUR) 20242023
Total -5 097 -5 125
Staff expenses -2 708 -2 677
General administrative expenses
ICT -641-634
Facility expenses -250-265
Marketing and communications -111-108
Professional service fees -142-144
Bank and insurance tax -623-687
Other -240-224
Depreciation and amortisation of fixed assets -382-386
\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 down by 1% in 2024 compared to 2023.
\n
- This amount includes 623 million euros in bank and insurance tax, a 9% decrease year-on-year. This was partly due to
\n
lower contributions to the resolution fund (after reaching the target level of 1% of the covered deposits for the Single
\n
Resolution Fund in 2023, no contributions were made by euro area countries and only limited contributions were made by
\n
non-euro area countries), a lower contribution to the deposit guarantee schemes (mainly in Belgium, due to a lower-than-
\n
anticipated volume of covered deposits), partly offset by additional national bank taxes in a number of countries (primarily
\n
in Belgium and Slovakia).
\n
- Expenses excluding bank and insurance tax increased by 1% to 4 474 million euros. This was mainly attributable to inflation-
\n
related pressure on wages and higher ICT and regulatory expenses, and was only partly offset by, among other things,
\n
the positive impact of the sale of the Irish portfolios and lower facility expenses.
\n
\u2022 Under \u2018Insurance service expenses\u2019, operating expenses are also allocated as \u2018directly attributable to insurance contracts\u2019.
\n
For 2024, the operating expenses that are \u2018directly attributable to insurance contracts\u2019 are comprised of approximately 39%
\n
staff expenses, 57% general administrative expenses and 4% depreciation and amortisation of fixed assets.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of
\n
the 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 2024, this resulted in the recognition of a limited employee benefit (3 million euros) as the
\n
issue price in 2024 was lower than the market price. Information regarding the price of the KBC share can be found in the
\n
\u2018Report of the Board of Directors\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", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag972": { "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
(in millions of EUR) 20242023
Total -5 097 -5 125
Staff expenses -2 708 -2 677
General administrative expenses
ICT -641-634
Facility expenses -250-265
Marketing and communications -111-108
Professional service fees -142-144
Bank and insurance tax -623-687
Other -240-224
Depreciation and amortisation of fixed assets -382-386
\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 down by 1% in 2024 compared to 2023.
\n
- This amount includes 623 million euros in bank and insurance tax, a 9% decrease year-on-year. This was partly due to
\n
lower contributions to the resolution fund (after reaching the target level of 1% of the covered deposits for the Single
\n
Resolution Fund in 2023, no contributions were made by euro area countries and only limited contributions were made by
\n
non-euro area countries), a lower contribution to the deposit guarantee schemes (mainly in Belgium, due to a lower-than-
\n
anticipated volume of covered deposits), partly offset by additional national bank taxes in a number of countries (primarily
\n
in Belgium and Slovakia).
\n
- Expenses excluding bank and insurance tax increased by 1% to 4 474 million euros. This was mainly attributable to inflation-
\n
related pressure on wages and higher ICT and regulatory expenses, and was only partly offset by, among other things,
\n
the positive impact of the sale of the Irish portfolios and lower facility expenses.
\n
\u2022 Under \u2018Insurance service expenses\u2019, operating expenses are also allocated as \u2018directly attributable to insurance contracts\u2019.
\n
For 2024, the operating expenses that are \u2018directly attributable to insurance contracts\u2019 are comprised of approximately 39%
\n
staff expenses, 57% general administrative expenses and 4% depreciation and amortisation of fixed assets.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of
\n
the 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 2024, this resulted in the recognition of a limited employee benefit (3 million euros) as the
\n
issue price in 2024 was lower than the market price. Information regarding the price of the KBC share can be found in the
\n
\u2018Report of the Board of Directors\u2019 section.
\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
(in millions of EUR) 31-12-202431-12-2023
Property and equipment 3 396 3 216
Investment property 585 485
Rental income 55 53
Direct operating expenses from investments generating rental income 16 15
Direct operating expenses from investments not generating rental income 1 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 IT Other Total property
MOVEMENTS TABLE buildings equipment equipment and equipment Investment property
2024
Opening balance 1 306 122 1 789 3 216 485
Acquisitions 109 83 803 995 149
Disposals -44 -2 -271 -317 -13
Depreciation -102-62 -30 -194 -33
Other movements 3 -6 -300 -304 -2
Closing balance 1 271 135 1 990 3 396 585
Accumulated depreciation and impairment1 609 484 882 2 975 324
Fair value 839
2023
Opening balance 1 373 130 1 486 2 989 571
Acquisitions 106 53 830 988 34
Disposals -240-242-266-82
Depreciation-119-62-25-206-31
Other movements -30 1 -260 -289 -7
Closing balance 1 306 122 1 789 3 216 485
Accumulated depreciation and impairment 1 585 479 915 2 979 308
Fair value 733
\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
\u2022 There was a small amount (around 0.2 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
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\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 2024 and 2023 on property and equipment and
\n
regarding climate-related and other ESG risks, see the \u2018Sustainability statement\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
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
can also be found in our Climate Report and our Sustainability Report at www.kbc.com.
\n
income statement.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation. More details
\n
\u2022 \u2018Other equipment\u2019 mostly comprises full service vehicle leases (mainly cars and bicycles) under operating leases. The other
\n
movements in \u2018Other equipment\u2019 mainly concern depreciation of these assets, recognised under \u2018Net other income\u2019 in 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

\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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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
Discount rates throughout the specific period
Goodwill outstandingof cashflow projections
(in millions of EUR) 31-12-2024 31-12-202331-12-202431-12-2023
K&H Bank 16918114.7% \u2013 13.5% 15.2% \u2013 13.7%
\u010cSOB (Czech Republic) 24825212.7% \u2013 12.6% 13.0% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna656612.7% \u2013 12.6%13.0% \u2013 12.8%
United Bulgarian Bank 54654612.4% \u2013 12.3% 13.3% \u2013 12.5%
DZI Insurance 757510.1%11.2% \u2013 10.4%
KBC Commercial Finance 212111.6% \u2013 12.2% 12.0%
Pension Insurance Company UBB 56567.3% \u2013 7.8% 8.3% \u2013 8.4%
Rest 4242\u2013\u2013
Total 1 221 1 240 \u2013\u2013
\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 2024 (between
\n
3.2% and 4.7% in 2023).
\n
\u2022 For all entities, at year-end 2024 the recoverable amount exceeded the carrying value to such a large extent that no
\n
reasonably possible change in the key assumptions would result in the recoverable amount being less than or equal to the
\n
carrying 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", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag1080": { "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
(in millions of EUR) 20242023
Total -5 097 -5 125
Staff expenses -2 708 -2 677
General administrative expenses
ICT -641-634
Facility expenses -250-265
Marketing and communications -111-108
Professional service fees -142-144
Bank and insurance tax -623-687
Other -240-224
Depreciation and amortisation of fixed assets -382-386
\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 down by 1% in 2024 compared to 2023.
\n
- This amount includes 623 million euros in bank and insurance tax, a 9% decrease year-on-year. This was partly due to
\n
lower contributions to the resolution fund (after reaching the target level of 1% of the covered deposits for the Single
\n
Resolution Fund in 2023, no contributions were made by euro area countries and only limited contributions were made by
\n
non-euro area countries), a lower contribution to the deposit guarantee schemes (mainly in Belgium, due to a lower-than-
\n
anticipated volume of covered deposits), partly offset by additional national bank taxes in a number of countries (primarily
\n
in Belgium and Slovakia).
\n
- Expenses excluding bank and insurance tax increased by 1% to 4 474 million euros. This was mainly attributable to inflation-
\n
related pressure on wages and higher ICT and regulatory expenses, and was only partly offset by, among other things,
\n
the positive impact of the sale of the Irish portfolios and lower facility expenses.
\n
\u2022 Under \u2018Insurance service expenses\u2019, operating expenses are also allocated as \u2018directly attributable to insurance contracts\u2019.
\n
For 2024, the operating expenses that are \u2018directly attributable to insurance contracts\u2019 are comprised of approximately 39%
\n
staff expenses, 57% general administrative expenses and 4% depreciation and amortisation of fixed assets.
\n
\u2022 For information on the average number of persons employed, see Note 3.8; information on the remuneration of members of
\n
the 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 2024, this resulted in the recognition of a limited employee benefit (3 million euros) as the
\n
issue price in 2024 was lower than the market price. Information regarding the price of the KBC share can be found in the
\n
\u2018Report of the Board of Directors\u2019 section.
\n
\n", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag973": { "value": "\n
Note 3.8: Personnel
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
(number) 20242023
Total average number of persons employed (in full-time equivalents) 38 074 38 609
By legal entity
KBC Bank 27 872 28 708
KBC Insurance 4 120 4 067
KBC Group NV (holding company) and KBC Global Services NV (cost-sharing structure) 6 082 5 834
By employee classification
Blue-collar staff 417 389
White-collar staff 37 400 37 960
Senior management 257 260
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
\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
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transactions with key management (members of the Board of Directors and Executive Committee of
KBC Group NV) (in millions of EUR)* 20242023
Total* 16 15
Breakdown by type of remuneration
Short-term employee benefits 13 12
Post-employment benefits 3 2
Defined benefit plans 0 0
Defined contribution plans 3 2
Other long-term employee benefits 0 0
Termination benefits 0 0
Share-based payments 0 0
Stock options (units)
At the beginning of the period 0 0
Granted 0 0
Exercised 0 0
Composition-related changes 0 0
At the end of the period 0 0
Advances and loans granted to key management and partners 3 1
\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.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag997": { "value": "\n

\n

\n\n

\n

\n
Note 3.9: Impairment (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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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*) 20242023
Total -248 -215
Impairment on financial assets at AC and at FVOCI -199 16
(impairment on loans)
By IFRS category
Financial assets at amortised cost -201 17
Financial assets at fair value through OCI 2 -1
By product
Loans and advances -224 -5
Debt securities 4 6
Off-balance-sheet commitments and financial guarantees 21 15
By type
Stage 1 (12-month ECL) -30 -41
Stage 2 (lifetime ECL) 162 160
Stage 3 (lifetime ECL) -283 -92
Purchased or originated credit impaired assets -49 -11
By business unit/country
Belgium -246 -82
Czech Republic 34 70
International Markets 25 19
Slovakia 18 8
Hungary 23 11
Bulgaria -160
Group Centre -12 8
Impairment on goodwill 0 -109
Impairment on other -49 -122
Intangible fixed assets (other than goodwill) -36 -77
Property and equipment (including investment property) -2 -15
Associated companies and joint ventures 0 0
Other -11 -30
\n\n\n\n\n\n\n\n\n
\n
* Positive figures indicate a reversal and hence a positive impact on results
\n

\n\n\n\n\n\n\n\n\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 loans:
\n
- In 2024, this item included a partial reversal of 134 million euros related to the reserve for geopolitical and macroeconomic
\n
uncertainties (see below) and a net increase of 333 million euros for loans in the loan portfolio (of which a 72-million-euro
\n
reduction of the backstop shortfall for old non-performing loans in Belgium \u2013 see also the \u2018How do we manage our
\n
capital?\u2019 section);
\n
- In 2023, this item included a partial reversal of 155 million euros related to the reserve for geopolitical and macroeconomic
\n
uncertainties (see below) and a net increase of 139 million euros for loans in the loan portfolio;
\n
- The impact of the extreme weather conditions, including flooding and storms, in 2024 and 2023 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 2024, this item included impairment of software and modification losses related to the extension of the interest cap
\n
regulation in Hungary;
\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
\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 specified in that section. Among
\n
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

\n\n\n\n\n\n\n\n\n\n\n\n\n\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 In order to calculate ECL, KBC uses specific models for probability of default (PD), exposure at default (EAD) and loss given
\n
default (LGD). It is essential to take account of historical observations 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
\n
in these models include collateral types and financial ratios.
\n
\u2022 On 31 December 2024, 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
\n
(mortgages, pledges on business assets, guarantees, etc.). Examples of IFRS 9 models include \u2018Banks\u2019, \u2018Belgian private persons
\n
\u2013 home loans\u2019, \u2018Czech corporates\u2019, \u2018Bulgarian corporates and SMEs\u2019 and \u2018Central governments\u2019. Detailed documentation is
\n
available for each PD, EAD and LGD model. These models are periodically back-tested and, if necessary, redesigned. There
\n
was no material net impact on ECL from redesigned models in 2024. The main models are subject to review by external
\n
auditors. The Basel models, which the IFRS 9 models are based on, are subject to external control performed by the supervisory
\n
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
\n
unemployment rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation.
\n
Microeconomic variables include, for example, confidence indicators, the harmonised consumer price index (HICP), the
\n
producer price index (PPI), and so on. As a result of regular back-testing, models may change and economic variables may
\n
be reassessed. The following table gives the base-case scenario for the three key indicators (GDP growth, unemployment
\n
rate and house price index) for each of our core countries for the coming years. After that, we take into account a gradual
\n
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
Macroeconomic base-case scenario \u2013 key indicators
(used for situation at year-end 2024)* 202420252026
Real GDP growth
Belgium 1.0% 0.6% 0.9%
Czech Republic 1.0% 2.3% 2.3%
Hungary 0.4% 2.1% 3.1%
Slovakia 2.2% 2.0% 2.6%
Bulgaria 2.2% 2.1% 2.4%
Unemployment rate
Belgium 5.8% 6.0% 5.9%
Czech Republic 2.9% 3.2% 3.1%
Hungary 4.6% 4.3% 3.9%
Slovakia 5.5% 5.5% 5.5%
Bulgaria 4.2% 4.2% 4.0%
House price index
Belgium 2.9% 3.0% 3.0%
Czech Republic 3.9% 4.2% 3.5%
Hungary 7.0% 4.5% 4.0%
Slovakia 3.0% 3.0% 3.5%
Bulgaria 12.2% 5.0% 3.5%
\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 2024\u2019 and \u2018Our business units\u2019 sections.
\n
\n

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

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

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

\n\n\n\n\n\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 use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
\n
weightings at year-end 2024 were 60% for the \u2018base\u2019 scenario, 20% for the optimistic \u2018up\u2019 scenario and 20% for the pessimistic
\n
\u2018down\u2019 scenario. The forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on
\n
the collectively assessed ECL (i.e. without the ECL for individually assessed loans of 1.65 billion euros at the end of 2024 and
\n
1.56 billion euros at the end of 2023) shows that the \u2018base\u2019 scenario generates an ECL of 0.81 billion euros (0.91 billion euros in
\n
2023), which is 0.02 billion euros lower than for the \u2018down\u2019 scenario (0.07 billion euros in 2023) and 0.01 billion euros higher than
\n
for the \u2018up\u2019 scenario (0.03 billion euros in 2023). The assessed scenario-weighted collective ECL results (that were recognised)
\n
amounted to 0.81 billion euros (0.93 billion euros in 2023). These amounts include the ECL related to geopolitical and
\n
macroeconomic uncertainties.
\n
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 (2024, in billions of EUR) base-case scenario optimistic scenario pessimistic
scenario
Total 0.81 0.79 0.83
Belgium 0.26 0.260.27
Czech Republic 0.27 0.27 0.27
Slovakia 0.080.08 0.08
Hungary 0.04 0.04 0.05
Bulgaria 0.15 0.14 0.15
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
\u2022 The management of ESG risks is an integral part of the Credit Risk Management Framework (CRMF; see \u2018How do we manage
\n
our risks?\u2019 (under \u2018Credit risk\u2019)). Dedicated processes have been developed focusing on the risk management of ESG-related
\n
credit risks, and in particular on identification measurement, risk appetite and follow-up. A detailed explanation of the Credit
\n
Risk Management Framework is provided in the \u2018ESG in credit risk management\u2019 section of the Risk Report, which is available
\n
at www.kbc.com. The main elements of this management framework are as follows:
\n
- In order to identify ESG-related credit risks, we use the Environmental Risk Impact Map (ERIM) to assess the impact of
\n
various climate and environmental risk drivers on the credit risk profile. Additionally, regular thematic analyses are also
\n
carried out (so-called \u2018White Papers\u2019). In the loan origination and review process, a sector-based environmental and social
\n
(E&S) heat map is used. This is a screening tool to identify the risks involved in the portfolio of loans to corporate entities
\n
and SMEs. For material credit files in scope of high E&S Risk sectors, an ESG assessment is performed at counterparty level.
\n
- In the context of risk quantification, specific measurement techniques are being developed to assess the impact of ESG
\n
risks on our loan portfolio. For example, KBC is exploring the possibility of assessing sectoral climate impacts on Probability
\n
of Default (PD) based on climate scenarios from the Network for Greening the Financial System (NGFS). The quantifiability
\n
of ESG-related risks will gradually increase with the improved availability of data and measurement methodologies.
\n
- As regards risk appetite, KBC aims to limit the adverse impact of its activities on the environment and society and to
\n
encourage a positive impact, based on a responsible lending culture, the principles of which are laid out in a group-wide
\n
sustainability policy. KBC\u2019s commitment to consider climate and environmental risks is reflected in standards and policies
\n
addressing credit risk. These standards and policies apply in every step of the credit process, including, for instance, in
\n
loan pricing and collateral valuation. Furthermore, climate-related Key Risk Indicators (KRIs) were introduced in the Risk
\n
Appetite Process. These KRI\u2019s are monitored on a semi-annual basis by the Group Lending Committee and integrated in
\n
the Climate Risk Dashboard.
\n
\u2022 KBC is gradually incorporating climate-related risks in the ECL process. This is reflected in our commitment, as described
\n
above, to consider climate-related risks in our collateral valuation process and in the ESG assessment of the relevant
\n
counterparty. KBC is also looking into the possibilities of a portfolio approach, which involves studying new methods to
\n
determine any relationship between the expected evolution of the climate and credit risk. As stated above, KBC is
\n
investigating whether a practicable model can be built to assess sectoral climate impacts based on climate scenarios
\n
developed by the NGFS. At this stage of the investigation, it is too early to include any impacts in the accounting policies.
\n
Management has the ability to overrule the expected credit losses and to capture the growing insights into ESG and climate-
\n
related 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
\u2022 Impairment on goodwill in 2023: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the
\n
reduction of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future
\n
projected earnings. This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros
\n
(based on the exchange rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of
\n
\u010cSOB Stavebn\u00ed (the former \u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time,
\n
which resulted in a one-off gain of 82 million euros.
\n
\u2022 Reserve for geopolitical and macroeconomic uncertainties (referred to as the \u2018reserve for geopolitical and emerging risks\u2019 up
\n
until year-end 2023): the outstanding balance of the ECL for geopolitical and macroeconomic uncertainties came to 117 million
\n
euros at year-end 2024; the corresponding figure at year-end 2023 was 256 million euros. This ECL is determined based on
\n
individual counterparties and sectors in our portfolio which are deemed to have incurred an increase in credit risk because
\n
they are either (\u00b0) exposed to the macroeconomic risks (e.g., high(er) inflation and interest rates, high(er) energy prices) or (\u00b0)
\n
indirectly exposed to ongoing military conflict, such as the one in Ukraine. The decline is largely attributable to the improved
\n
micro- and macroeconomic outlook and the reversal of a collective migration of \u2018Stage 1\u2019 positions to \u2018Stage 2\u2019 for positions
\n
whose credit risk has increased significantly, which are included in the standard staging assessment since the fourth quarter
\n
of 2024. At year-end 2023, 12 billion euros\u2019 worth of \u2018Stage 1\u2019 positions were collectively migrated to \u2018Stage 2\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
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
(in millions of EUR) 31-12-202431-12-2023
Property and equipment 3 396 3 216
Investment property 585 485
Rental income 55 53
Direct operating expenses from investments generating rental income 16 15
Direct operating expenses from investments not generating rental income 1 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 IT Other Total property
MOVEMENTS TABLE buildings equipment equipment and equipment Investment property
2024
Opening balance 1 306 122 1 789 3 216 485
Acquisitions 109 83 803 995 149
Disposals -44 -2 -271 -317 -13
Depreciation -102-62 -30 -194 -33
Other movements 3 -6 -300 -304 -2
Closing balance 1 271 135 1 990 3 396 585
Accumulated depreciation and impairment1 609 484 882 2 975 324
Fair value 839
2023
Opening balance 1 373 130 1 486 2 989 571
Acquisitions 106 53 830 988 34
Disposals -240-242-266-82
Depreciation-119-62-25-206-31
Other movements -30 1 -260 -289 -7
Closing balance 1 306 122 1 789 3 216 485
Accumulated depreciation and impairment 1 585 479 915 2 979 308
Fair value 733
\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
\u2022 There was a small amount (around 0.2 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
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\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 2024 and 2023 on property and equipment and
\n
regarding climate-related and other ESG risks, see the \u2018Sustainability statement\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
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
can also be found in our Climate Report and our Sustainability Report at www.kbc.com.
\n
income statement.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation. More details
\n
\u2022 \u2018Other equipment\u2019 mostly comprises full service vehicle leases (mainly cars and bicycles) under operating leases. The other
\n
movements in \u2018Other equipment\u2019 mainly concern depreciation of these assets, recognised under \u2018Net other income\u2019 in the
\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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag975": { "value": "\n

\n

\n
Note 3.9: Impairment (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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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*) 20242023
Total -248 -215
Impairment on financial assets at AC and at FVOCI -199 16
(impairment on loans)
By IFRS category
Financial assets at amortised cost -201 17
Financial assets at fair value through OCI 2 -1
By product
Loans and advances -224 -5
Debt securities 4 6
Off-balance-sheet commitments and financial guarantees 21 15
By type
Stage 1 (12-month ECL) -30 -41
Stage 2 (lifetime ECL) 162 160
Stage 3 (lifetime ECL) -283 -92
Purchased or originated credit impaired assets -49 -11
By business unit/country
Belgium -246 -82
Czech Republic 34 70
International Markets 25 19
Slovakia 18 8
Hungary 23 11
Bulgaria -160
Group Centre -12 8
Impairment on goodwill 0 -109
Impairment on other -49 -122
Intangible fixed assets (other than goodwill) -36 -77
Property and equipment (including investment property) -2 -15
Associated companies and joint ventures 0 0
Other -11 -30
\n\n\n\n\n\n\n\n\n
\n
* Positive figures indicate a reversal and hence a positive impact on results
\n

\n\n\n\n\n\n\n\n\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 loans:
\n
- In 2024, this item included a partial reversal of 134 million euros related to the reserve for geopolitical and macroeconomic
\n
uncertainties (see below) and a net increase of 333 million euros for loans in the loan portfolio (of which a 72-million-euro
\n
reduction of the backstop shortfall for old non-performing loans in Belgium \u2013 see also the \u2018How do we manage our
\n
capital?\u2019 section);
\n
- In 2023, this item included a partial reversal of 155 million euros related to the reserve for geopolitical and macroeconomic
\n
uncertainties (see below) and a net increase of 139 million euros for loans in the loan portfolio;
\n
- The impact of the extreme weather conditions, including flooding and storms, in 2024 and 2023 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 2024, this item included impairment of software and modification losses related to the extension of the interest cap
\n
regulation in Hungary;
\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
\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 specified in that section. Among
\n
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

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

\n
\u2022 In order to calculate ECL, KBC uses specific models for probability of default (PD), exposure at default (EAD) and loss given
\n
default (LGD). It is essential to take account of historical observations 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
\n
in these models include collateral types and financial ratios.
\n
\u2022 On 31 December 2024, 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
\n
(mortgages, pledges on business assets, guarantees, etc.). Examples of IFRS 9 models include \u2018Banks\u2019, \u2018Belgian private persons
\n
\u2013 home loans\u2019, \u2018Czech corporates\u2019, \u2018Bulgarian corporates and SMEs\u2019 and \u2018Central governments\u2019. Detailed documentation is
\n
available for each PD, EAD and LGD model. These models are periodically back-tested and, if necessary, redesigned. There
\n
was no material net impact on ECL from redesigned models in 2024. The main models are subject to review by external
\n
auditors. The Basel models, which the IFRS 9 models are based on, are subject to external control performed by the supervisory
\n
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
\n
unemployment rate, policy interest rates, the exchange rate, government bond yields, house prices and inflation.
\n
Microeconomic variables include, for example, confidence indicators, the harmonised consumer price index (HICP), the
\n
producer price index (PPI), and so on. As a result of regular back-testing, models may change and economic variables may
\n
be reassessed. The following table gives the base-case scenario for the three key indicators (GDP growth, unemployment
\n
rate and house price index) for each of our core countries for the coming years. After that, we take into account a gradual
\n
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
Macroeconomic base-case scenario \u2013 key indicators
(used for situation at year-end 2024)* 202420252026
Real GDP growth
Belgium 1.0% 0.6% 0.9%
Czech Republic 1.0% 2.3% 2.3%
Hungary 0.4% 2.1% 3.1%
Slovakia 2.2% 2.0% 2.6%
Bulgaria 2.2% 2.1% 2.4%
Unemployment rate
Belgium 5.8% 6.0% 5.9%
Czech Republic 2.9% 3.2% 3.1%
Hungary 4.6% 4.3% 3.9%
Slovakia 5.5% 5.5% 5.5%
Bulgaria 4.2% 4.2% 4.0%
House price index
Belgium 2.9% 3.0% 3.0%
Czech Republic 3.9% 4.2% 3.5%
Hungary 7.0% 4.5% 4.0%
Slovakia 3.0% 3.0% 3.5%
Bulgaria 12.2% 5.0% 3.5%
\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 2024\u2019 and \u2018Our business units\u2019 sections.
\n
\n

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\n\n

\n\n
\u2022 We use three different forward-looking macroeconomic scenarios (with different probability weightings) to measure ECL. The
\n
weightings at year-end 2024 were 60% for the \u2018base\u2019 scenario, 20% for the optimistic \u2018up\u2019 scenario and 20% for the pessimistic
\n
\u2018down\u2019 scenario. The forecast horizon is 30 years. A sensitivity analysis of the impact of these multiple economic scenarios on
\n
the collectively assessed ECL (i.e. without the ECL for individually assessed loans of 1.65 billion euros at the end of 2024 and
\n
1.56 billion euros at the end of 2023) shows that the \u2018base\u2019 scenario generates an ECL of 0.81 billion euros (0.91 billion euros in
\n
2023), which is 0.02 billion euros lower than for the \u2018down\u2019 scenario (0.07 billion euros in 2023) and 0.01 billion euros higher than
\n
for the \u2018up\u2019 scenario (0.03 billion euros in 2023). The assessed scenario-weighted collective ECL results (that were recognised)
\n
amounted to 0.81 billion euros (0.93 billion euros in 2023). These amounts include the ECL related to geopolitical and
\n
macroeconomic uncertainties.
\n
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 (2024, in billions of EUR) base-case scenario optimistic scenario pessimistic
scenario
Total 0.81 0.79 0.83
Belgium 0.26 0.260.27
Czech Republic 0.27 0.27 0.27
Slovakia 0.080.08 0.08
Hungary 0.04 0.04 0.05
Bulgaria 0.15 0.14 0.15
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
\u2022 The management of ESG risks is an integral part of the Credit Risk Management Framework (CRMF; see \u2018How do we manage
\n
our risks?\u2019 (under \u2018Credit risk\u2019)). Dedicated processes have been developed focusing on the risk management of ESG-related
\n
credit risks, and in particular on identification measurement, risk appetite and follow-up. A detailed explanation of the Credit
\n
Risk Management Framework is provided in the \u2018ESG in credit risk management\u2019 section of the Risk Report, which is available
\n
at www.kbc.com. The main elements of this management framework are as follows:
\n
- In order to identify ESG-related credit risks, we use the Environmental Risk Impact Map (ERIM) to assess the impact of
\n
various climate and environmental risk drivers on the credit risk profile. Additionally, regular thematic analyses are also
\n
carried out (so-called \u2018White Papers\u2019). In the loan origination and review process, a sector-based environmental and social
\n
(E&S) heat map is used. This is a screening tool to identify the risks involved in the portfolio of loans to corporate entities
\n
and SMEs. For material credit files in scope of high E&S Risk sectors, an ESG assessment is performed at counterparty level.
\n
- In the context of risk quantification, specific measurement techniques are being developed to assess the impact of ESG
\n
risks on our loan portfolio. For example, KBC is exploring the possibility of assessing sectoral climate impacts on Probability
\n
of Default (PD) based on climate scenarios from the Network for Greening the Financial System (NGFS). The quantifiability
\n
of ESG-related risks will gradually increase with the improved availability of data and measurement methodologies.
\n
- As regards risk appetite, KBC aims to limit the adverse impact of its activities on the environment and society and to
\n
encourage a positive impact, based on a responsible lending culture, the principles of which are laid out in a group-wide
\n
sustainability policy. KBC\u2019s commitment to consider climate and environmental risks is reflected in standards and policies
\n
addressing credit risk. These standards and policies apply in every step of the credit process, including, for instance, in
\n
loan pricing and collateral valuation. Furthermore, climate-related Key Risk Indicators (KRIs) were introduced in the Risk
\n
Appetite Process. These KRI\u2019s are monitored on a semi-annual basis by the Group Lending Committee and integrated in
\n
the Climate Risk Dashboard.
\n
\u2022 KBC is gradually incorporating climate-related risks in the ECL process. This is reflected in our commitment, as described
\n
above, to consider climate-related risks in our collateral valuation process and in the ESG assessment of the relevant
\n
counterparty. KBC is also looking into the possibilities of a portfolio approach, which involves studying new methods to
\n
determine any relationship between the expected evolution of the climate and credit risk. As stated above, KBC is
\n
investigating whether a practicable model can be built to assess sectoral climate impacts based on climate scenarios
\n
developed by the NGFS. At this stage of the investigation, it is too early to include any impacts in the accounting policies.
\n
Management has the ability to overrule the expected credit losses and to capture the growing insights into ESG and climate-
\n
related risks.
\n

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\n\n

\n\n
\u2022 Impairment on goodwill in 2023: \u010cSOB Stavebn\u00ed spo\u0159itelna (a subsidiary of \u010cSOB Czech Republic) is facing the impact of the
\n
reduction of the building saving state subsidy in the Czech Republic, which has a significant negative impact on future
\n
projected earnings. This created an impairment of 109 million euros on the total goodwill outstanding of 175 million euros
\n
(based on the exchange rate as at 31 December 2023). This goodwill was created in June 2019 during the full acquisition of
\n
\u010cSOB Stavebn\u00ed (the former \u010cMSS), partially through the revaluation of the group\u2019s existing 55% stake in \u010cMSS at that time,
\n
which resulted in a one-off gain of 82 million euros.
\n
\u2022 Reserve for geopolitical and macroeconomic uncertainties (referred to as the \u2018reserve for geopolitical and emerging risks\u2019 up
\n
until year-end 2023): the outstanding balance of the ECL for geopolitical and macroeconomic uncertainties came to 117 million
\n
euros at year-end 2024; the corresponding figure at year-end 2023 was 256 million euros. This ECL is determined based on
\n
individual counterparties and sectors in our portfolio which are deemed to have incurred an increase in credit risk because
\n
they are either (\u00b0) exposed to the macroeconomic risks (e.g., high(er) inflation and interest rates, high(er) energy prices) or (\u00b0)
\n
indirectly exposed to ongoing military conflict, such as the one in Ukraine. The decline is largely attributable to the improved
\n
micro- and macroeconomic outlook and the reversal of a collective migration of \u2018Stage 1\u2019 positions to \u2018Stage 2\u2019 for positions
\n
whose credit risk has increased significantly, which are included in the standard staging assessment since the fourth quarter
\n
of 2024. At year-end 2023, 12 billion euros\u2019 worth of \u2018Stage 1\u2019 positions were collectively migrated to \u2018Stage 2\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

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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
Carrying value before Carrying value after
(in millions of EUR) impairmentImpairmentimpairment
31-12-2024
Financial assets at amortised cost: Loans and advances* 217 093 -2 448 214 645
Stage 1 (12-month ECL) 197 031 -176 196 855
Stage 2 (lifetime ECL) 16 177 -331 15 847
Stage 3 (lifetime ECL) 3 472 -1 803 1 669
Purchased or originated credit impaired assets (POCI) 414 -138 276
Financial assets at amortised cost: Debt securities 50 084 -8 50 075
Stage 1 (12-month ECL) 49 979 -6 49 973
Stage 2 (lifetime ECL) 100 -1 99
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 securities 22 543 -4 22 539
Stage 1 (12-month ECL) 22 543 -4 22 539
Stage 2 (lifetime ECL) 0 0 0
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2023
Financial assets at amortised cost: Loans and advances* 213 531 -2 474 211 057
Stage 1 (12-month ECL) 175 853 -146 175 708
Stage 2 (lifetime ECL) 33 571 -490 33 081
Stage 3 (lifetime ECL) 3 694 -1 750 1 944
Purchased or originated credit impaired assets (POCI) 412 -88 324
Financial assets at amortised cost: Debt securities 51 384 -12 51 372
Stage 1 (12-month ECL) 51 300 -6 51 294
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 securities 16 897 -5 16 892
Stage 1 (12-month ECL) 16 864 -4 16 861
Stage 2 (lifetime ECL) 33 -1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
\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

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\n\n
\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily
\n
to:
\n
- an organic net increase in the loan portfolio (mainly mortgage loans and term loans);
\n
- a decrease in the carrying value 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 17.4 billion euros in 2024,
\n
due primarily to:
\n
- the release 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 conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic
\n
risks (12.0 billion euros at year-end 2023).
\n
- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying
\n
value of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to
\n
the introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a
\n
lesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk
\n
was updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The
\n
aim of both adjustments is to better reflect the underlying credit risk after initial recognition.
\n
- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect
\n
exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks,
\n
which are included in the standard staging assessment since the fourth quarter of 2024.
\n
\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in
\n
\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly
\n
offset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial
\n
assets at fair value through OCI\u2019 (FVOCI) category.
\n
\u2022 Impairment: stable in 2024 compared to 2023:
\n
- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2).
\n
\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to
\n
modifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage
\n
1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros
\n
in 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or
\n
losses are recognised under impairment (see Note 3.9).
\n
\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure for 2023 was 59 million euros.
\n
\n

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\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
Subject to
lifetime ECL
Stage 1 Stage 2 Stage 3 (purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR) 12-month ECL lifetime ECL lifetime ECL impaired) Total
2024
Impairment on 1 January 146 490 1 750 88 2 474
Movements with an impact on results1 31 -154 334 49 260
Transfer of financial assets
Stage 1 (12-month ECL) -11 76 43 0 108
Stage 2 (lifetime ECL) 19 -112 98 0 4
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 12 -31 -1 -20
New financial assets2 56 14 6 0 76
Changes in risk parameters during the reporting period -23 -81 242 50 188
Changes in the model or methodology 1 -35 -1 0 -35
Derecognised financial assets3-11 -28 -35 -1 -75
Other 0 0 12 1 13
Movements without an impact on results -1 -6 -280 1 -286
Derecognised financial assets3-1 -2 -234 -1 -238
Changes in the scope of consolidation 1 -1 0 0 0
Transfers under IFRS 5 0 0 0 0 0
Other -1 -3 -46 2 -48
Impairment on 31 December 176 331 1 803 138 2 448
2023
Impairment on 1 January 110 635 1 796 77 2 619
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 assets2 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 assets3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets3-2-1-207-1-211
Changes in the scope of consolidation 0 0 0 0 0
Transfers under IFRS 50 0 0 0 0
Other 0019120
Impairment on 31 December 146 490 1 750 88 2 474
\n\n\n\n\n\n
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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
\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 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt
\n
securities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited.
\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 specified in that 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", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag989": { "value": "\n

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Note 3.10: Share in results of associated companies and joint ventures
\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
(in millions of EUR) 20242023
Total 80 -4
Of which
IGLUU s.r.o. 0 -1
Bancontact Payconiq Company NV 1 1
Isabel NV 78 3
Payconiq International SA - -3
Batopin NV 1 -3
\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
\u2022 The results in 2024 are mainly due to a one-off gain of 79 million euros related to Isabel NV.
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\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
(in millions of EUR) 31-12-202431-12-2023
Total 116 30
Overview of investments, including goodwill
IGLUU s.r.o. 3 2
Immoscoop 2.0 BV -0
Isabel NV 94 15
Bancontact Payconiq Company NV 8 7
Batopin NV 8 3
Other 3 2
Goodwill on associated companies and joint ventures
Gross amount 0 0
Accumulated impairment 0 0
Breakdown by type
Unlisted 116 30
Listed 0 0
Fair value of investments in listed associated companies and joint ventures 0 0
\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 are recognised (see table).
\n
\u2022 For information on Isabel NV, see Note 3.10.
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\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag990": { "value": "\n

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Note 3.10: Share in results of associated companies and joint ventures
\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
(in millions of EUR) 20242023
Total 80 -4
Of which
IGLUU s.r.o. 0 -1
Bancontact Payconiq Company NV 1 1
Isabel NV 78 3
Payconiq International SA - -3
Batopin NV 1 -3
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\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
\u2022 The results in 2024 are mainly due to a one-off gain of 79 million euros related to Isabel NV.
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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
(in millions of EUR) 31-12-202431-12-2023
Total 116 30
Overview of investments, including goodwill
IGLUU s.r.o. 3 2
Immoscoop 2.0 BV -0
Isabel NV 94 15
Bancontact Payconiq Company NV 8 7
Batopin NV 8 3
Other 3 2
Goodwill on associated companies and joint ventures
Gross amount 0 0
Accumulated impairment 0 0
Breakdown by type
Unlisted 116 30
Listed 0 0
Fair value of investments in listed associated companies and joint ventures 0 0
\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 are recognised (see table).
\n
\u2022 For information on Isabel NV, see Note 3.10.
\n

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Note 6.5: Subsidiaries, joint ventures and associated companies
\n
KBC Group: main companies included in the scope of consolidation at year-end 2024
\n
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Company Share of capital held Business
CompanyRegistered officenumber at group level (in %) unit*Activity
KBC Bank (group)
KBC Bank NV Brussels \u2013 BE 0462.920.226 100.00 BEL/GRP credit institution
CBC BANQUE SA Namur \u2013 BE 0403.211.380 100.00 BEL credit institution
\u010ceskoslovensk\u00e1 Obchodn\u00e1 Banka a.s. Bratislava \u2013 SK -- 100.00 IMA credit institution
\u010ceskoslovensk\u00e1 Obchodn\u00ed Banka a.s. Prague \u2013 CZ -- 100.00 CZR credit institution
KBC Asset Management NV Brussels \u2013 BE 0469.444.267 100.00 BEL asset management
KBC Autolease NV Leuven \u2013 BE 0422.562.385 100.00 BEL leasing
KBC Commercial Finance NV Brussels \u2013 BE 0403.278.488 100.00 BEL factoring
KBC IFIMA SA Luxembourg \u2013 LU -- 100.00 GRP Finance
KBC Securities NV Brussels \u2013 BE 0437.060.521 100.00 BEL stockbroker
K&H Bank Zrt. Budapest \u2013 HU -- 100.00 IMA credit institution
Loan Invest NV Brussels \u2013 BE0889.054.884 100.00 BEL securitisation
United Bulgarian Bank AD Sofia \u2013 BG -- 99.96 IMA credit institution
KBC Insurance (group)
KBC Insurance NV Leuven \u2013 BE 0403.552.563 100.00 BEL/GRP insurance company
ADD NV Heverlee \u2013 BE 0406.080.305 100.00 BEL insurance broker
KBC Group Re SA Luxembourg \u2013 LU -- 100.00 GRP reinsurance company
\u010cSOB Poji\u0161t\u2019ovna a.s. Pardubice \u2013 CZ -- 100.00 CZR insurance company
\u010cSOB Poist\u2019ov\u0148a a.s. Bratislava \u2013 SK-- 100.00 IMA insurance company
DZI (group) Sofia \u2013 BG -- 100.00 IMA insurance company
Groep VAB NV Zwijndrecht \u2013 BE 0456.920.676 100.00 BEL driving school/roadside
assistance
K&H Biztos\u00edt\u00f3 Zrt. Budapest \u2013 HU -- 100.00 IMA insurance company
KBC group
DISCAI NV Brussels \u2013 BE 0773.435.537 100.00 GRP software company
KBC Group NV Brussels \u2013 BE 0403.227.515 100.00 GRP bank-insurance holding
company
KBC Bank (group) various locations -- 100.00 various credit institution
KBC Global Services NV Brussels \u2013 BE 0772.332.707 100.00 GRP cost-sharing structure
KBC Insurance (group) various locations -- 100.00 various insurance company
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* BEL: Belgium Business Unit; CZR: Czech Republic Business Unit; IMA: International Markets Business Unit; GRP: Group Centre.
\n

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\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

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\u2022 Disclosures of interests in other entities (IFRS 12)
\n
- Significant judgements and assumptions:
\n
- 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
- 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
- For the vast majority of the entities, the voting rights are materially equal to the ownership rights.
\n
- 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
- 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
- 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 2024, the assets under
\n
management at these entities amounted to 4.8 billion euros.
\n
- 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
- In 2024, KBC had received income from unconsolidated structured entities in the form of management fees (11 million
\n
euros) and accounting fees (1 million euros).
\n
- At year-end 2024, KBC held 1.5 billion euros\u2019 worth of notes issued by the unconsolidated structured entities. Its
\n
liabilities towards the unconsolidated structured entities amounted to 0.5 billion euros and comprised mainly time
\n
deposits (0.5 billion euros).
\n
- 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 2024, 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", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag991": { "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
(in millions of EUR) 20242023
Total 80 -4
Of which
IGLUU s.r.o. 0 -1
Bancontact Payconiq Company NV 1 1
Isabel NV 78 3
Payconiq International SA - -3
Batopin NV 1 -3
\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
\u2022 The results in 2024 are mainly due to a one-off gain of 79 million euros related to Isabel NV.
\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
(in millions of EUR) 31-12-202431-12-2023
Total 116 30
Overview of investments, including goodwill
IGLUU s.r.o. 3 2
Immoscoop 2.0 BV -0
Isabel NV 94 15
Bancontact Payconiq Company NV 8 7
Batopin NV 8 3
Other 3 2
Goodwill on associated companies and joint ventures
Gross amount 0 0
Accumulated impairment 0 0
Breakdown by type
Unlisted 116 30
Listed 0 0
Fair value of investments in listed associated companies and joint ventures 0 0
\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 are recognised (see table).
\n
\u2022 For information on Isabel NV, see Note 3.10.
\n

\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag992": { "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
(in millions of EUR) 20242023
Total 80 -4
Of which
IGLUU s.r.o. 0 -1
Bancontact Payconiq Company NV 1 1
Isabel NV 78 3
Payconiq International SA - -3
Batopin NV 1 -3
\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
\u2022 The results in 2024 are mainly due to a one-off gain of 79 million euros related to Isabel NV.
\n

\n\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
(in millions of EUR) 31-12-202431-12-2023
Total 116 30
Overview of investments, including goodwill
IGLUU s.r.o. 3 2
Immoscoop 2.0 BV -0
Isabel NV 94 15
Bancontact Payconiq Company NV 8 7
Batopin NV 8 3
Other 3 2
Goodwill on associated companies and joint ventures
Gross amount 0 0
Accumulated impairment 0 0
Breakdown by type
Unlisted 116 30
Listed 0 0
Fair value of investments in listed associated companies and joint ventures 0 0
\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 are recognised (see table).
\n
\u2022 For information on Isabel NV, see Note 3.10.
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag993": { "value": "\n
Note 3.11: Income tax expense
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 20242023
Total -527 -778
By type
Current taxes on income -699 -532
Deferred taxes on income 173 -246
Tax components
Result before tax 3 941 4 179
Income tax at the Belgian statutory rate 25.00% 25.00%
Income tax calculated -985 -1 045
Plus/minus tax effects attributable to
differences in tax rates, Belgium \u2013 abroad 168 234
tax-free income 64 117
adjustments related to prior years -8 4
adjustments to deferred taxes due to change in tax rate 0 4
unused tax losses and unused tax credits to reduce current tax expense 4 9
unused tax losses and unused tax credits to reduce deferred tax expense 3 25
reversal of previously recognised deferred tax assets due to tax losses -13 0
liquidation of Exicon (formerly KBC Bank Ireland) 318 -
other (including non-deductible expenses) -78 -126
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n
\n
\u2022 For information on tax assets and tax liabilities, see Note 5.2.
\n
\u2022 Taxes in 2024 were positively impacted by the imminent liquidation of Exicon (formerly KBC Bank Ireland) (see below), partly
\n
offset by an updated estimate of future taxable profits of the London branch (-9 million euros). Taxes in 2023 were positively
\n
impacted by an updated estimate of future taxable profits of the London branch (15 million euros).
\n
\u2022 In 2023, income tax expense was negatively impacted by 36 million euros as the deductibility of the Belgian bank and
\n
insurance tax was reduced by 80%. The remainder of the tax deductibility (20%) has also been abolished as of 2024 (having
\n
an additional impact of 11 million euros in 2024).
\n
\u2022 The government of the Czech Republic introduced a windfall tax, which will also apply to major banks and will be in force for
\n
the period 2023-2025. Any excess profits will be taxed at 79% (19% standard business tax, 60% windfall tax). As \u010cSOB in the
\n
Czech Republic did not make any excess profit in 2024 and 2023, no Czech windfall tax was due.
\n
\u2022 On 14 December 2023, Belgium, where ultimate parent company KBC Group NV has its registered office, laid down the Pillar
\n
Two global minimum tax in statute and declared that it would take effect on 1 January 2024. Under these rules, KBC is required
\n
to pay top-up tax (in Belgium or abroad) on the profits of its subsidiaries and permanent establishments, which are taxed at
\n
an effective tax rate of less than 15%. Based on the 2024 results, the additional top-up tax will be around 20 million euros
\n
(mainly in the Czech Republic and in Bulgaria). The group has applied the temporary exception issued by the IASB in May 2023
\n
relating to the accounting requirements for deferred taxes in IAS 12. The group will continue to monitor the effect of the Pillar
\n
Two legislation on its future financial performance.
\n
\u2022 Liquidation of Exicon (formerly KBC Bank Ireland): following approval from the Irish Ministry of Finance in September 2023, the
\n
remaining positions of KBC Bank Ireland were transferred to KBC Bank\u2019s Dublin branch, which means the main hurdles to
\n
commencing the legal process of liquidating Exicon (formerly KBC Bank Ireland) were overcome. In the fourth quarter of 2024,
\n
the imminent liquidation resulted in the recognition of a deferred tax asset for KBC Bank NV of 318 million euros.
\n
\u2022 The table on the next page shows the country-by-country reporting.
\n
\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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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 \u2013 paid on a Retained equiva-grants
(in millions of EUR) FTEs sales1jurisdictions2before tax current yearcash basis earnings lents3received
2024
KBC core countries
Belgium 14 053 6 230 510 1 822 -364 -338 12 680 2 559 0
Czech Republic 10 276 2 382-412 1 062 -165 -114 2 200 637 0
Slovakia 3 002 451 -180 125 -24 -21 28 165 0
Hungary 3 887 1 070 -77 394 -62 -46 1 261 157 0
Bulgaria 6 479 808 -31 358 -51 -31 432 197 0
Other countries
China 29 1 0 0 0 0 0 3 0
Germany 22 3 0 4 -2 -2 0 0 0
France 46 7 -13 5 -1 0 2 0 0
Great Britain 37 34 25 17 -11 -11 567 1 0
Hong Kong 28 1 0 0 0 1 0 1 0
Ireland 65 137 135 128 -18 -17 -1 593 4 0
Italy 8 0 0 0 0 0 0 1 0
Luxembourg 39 27 44 15 -1 0 118 172 0
The Netherlands 29 7 0 3 -1 -1 1 37 0
Romania 0 4 0 4 -1 -1 27 30 0
Singapore 32 2 0 1 0 2 0 1 0
USA 43 4 0 3 0 0 0 17 0
Total 38 074 11 167 0 3 941 -699 -579 15 724 3 981 0
2023
KBC core countries
Belgium 14 184 6 101 753 1 889 -338 -303 12 254 2 385 0
Czech Republic 10 189 2 215 -732 890 -65 -52 2 044 522 0
Slovakia 3 011 408 -162 134 -25 1 -104 178 0
Hungary 3 810 994 -79 336 -54 -39 929 164 0
Bulgaria 6 519 715 -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
Great Britain 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
Total 38 609 11 224 0 4 179 -532 -433 14 332 3 702 0
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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
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
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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
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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) 31-12-202431-12-2023
CURRENT TAXES
Current tax assets 59 176
Current tax liabilities 121 99
DEFERRED TAXES 593 351
Deferred tax assets by type of temporary difference 1 382 1 134
Employee benefits 80 85
Losses carried forward 366 103
Tangible and intangible fixed assets 98 80
Provisions for risks and charges 18 19
Impairment for losses on loans and advances 212 207
Financial instruments at fair value through profit or loss and fair value hedges 86 92
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 426 445
Insurance contract liabilities 33 36
Other, incl. reinsurance contracts 64 68
Deferred tax liabilities by type of temporary difference 789 784
Employee benefits 113 95
Losses carried forward 0 0
Tangible and intangible fixed assets 57 43
Provisions for risks and charges 9 9
Impairment for losses on loans and advances 3 3
Financial instruments at fair value through profit or loss and fair value hedges 85 76
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 21 41
Insurance contract liabilities 452 467
Other, incl. reinsurance contracts 50 50
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets 942 724
Deferred tax liabilities 349 373
Unused tax losses and unused tax credits 95 117
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\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag995": { "value": "\n
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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 \u2013 paid on a Retained equiva-grants
(in millions of EUR) FTEs sales1jurisdictions2before tax current yearcash basis earnings lents3received
2024
KBC core countries
Belgium 14 053 6 230 510 1 822 -364 -338 12 680 2 559 0
Czech Republic 10 276 2 382-412 1 062 -165 -114 2 200 637 0
Slovakia 3 002 451 -180 125 -24 -21 28 165 0
Hungary 3 887 1 070 -77 394 -62 -46 1 261 157 0
Bulgaria 6 479 808 -31 358 -51 -31 432 197 0
Other countries
China 29 1 0 0 0 0 0 3 0
Germany 22 3 0 4 -2 -2 0 0 0
France 46 7 -13 5 -1 0 2 0 0
Great Britain 37 34 25 17 -11 -11 567 1 0
Hong Kong 28 1 0 0 0 1 0 1 0
Ireland 65 137 135 128 -18 -17 -1 593 4 0
Italy 8 0 0 0 0 0 0 1 0
Luxembourg 39 27 44 15 -1 0 118 172 0
The Netherlands 29 7 0 3 -1 -1 1 37 0
Romania 0 4 0 4 -1 -1 27 30 0
Singapore 32 2 0 1 0 2 0 1 0
USA 43 4 0 3 0 0 0 17 0
Total 38 074 11 167 0 3 941 -699 -579 15 724 3 981 0
2023
KBC core countries
Belgium 14 184 6 101 753 1 889 -338 -303 12 254 2 385 0
Czech Republic 10 189 2 215 -732 890 -65 -52 2 044 522 0
Slovakia 3 011 408 -162 134 -25 1 -104 178 0
Hungary 3 810 994 -79 336 -54 -39 929 164 0
Bulgaria 6 519 715 -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
Great Britain 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
Total 38 609 11 224 0 4 179 -532 -433 14 332 3 702 0
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Note 3.12: Earnings per share
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(in millions of EUR) 20242023
Result after tax, attributable to equity holders of the parent 3 415 3 402
Coupon on AT1 instruments -84 -64
Net result used to determine basic earnings per share 3 332 3 338
Weighted average number of ordinary shares outstanding (millions of units) 400 415
Basic earnings per share (EUR) 8.33 8.04
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\u2022 Diluted earnings per share are currently almost the same as basic earnings per share.
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\u2022 Number of ordinary shares outstanding is after deduction of shares repurchased (see 2023-2024 share buyback programme).
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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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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6 Financial liabilities not included under deposits from customers as they are not directly related to commercial deposit acquisition.
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\u2022 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
\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 2024.
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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 specified in that section.
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\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
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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 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
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collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
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risks?\u2019 section.
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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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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end 2024 (2 808 million euros at year-end 2023).
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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
\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 or other financial assets 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
Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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 before Carrying value after
(in millions of EUR) impairmentImpairmentimpairment
31-12-2024
Financial assets at amortised cost: Loans and advances* 217 093 -2 448 214 645
Stage 1 (12-month ECL) 197 031 -176 196 855
Stage 2 (lifetime ECL) 16 177 -331 15 847
Stage 3 (lifetime ECL) 3 472 -1 803 1 669
Purchased or originated credit impaired assets (POCI) 414 -138 276
Financial assets at amortised cost: Debt securities 50 084 -8 50 075
Stage 1 (12-month ECL) 49 979 -6 49 973
Stage 2 (lifetime ECL) 100 -1 99
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 securities 22 543 -4 22 539
Stage 1 (12-month ECL) 22 543 -4 22 539
Stage 2 (lifetime ECL) 0 0 0
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2023
Financial assets at amortised cost: Loans and advances* 213 531 -2 474 211 057
Stage 1 (12-month ECL) 175 853 -146 175 708
Stage 2 (lifetime ECL) 33 571 -490 33 081
Stage 3 (lifetime ECL) 3 694 -1 750 1 944
Purchased or originated credit impaired assets (POCI) 412 -88 324
Financial assets at amortised cost: Debt securities 51 384 -12 51 372
Stage 1 (12-month ECL) 51 300 -6 51 294
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 securities 16 897 -5 16 892
Stage 1 (12-month ECL) 16 864 -4 16 861
Stage 2 (lifetime ECL) 33 -1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
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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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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily
\n
to:
\n
- an organic net increase in the loan portfolio (mainly mortgage loans and term loans);
\n
- a decrease in the carrying value 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 17.4 billion euros in 2024,
\n
due primarily to:
\n
- the release 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 conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic
\n
risks (12.0 billion euros at year-end 2023).
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- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying
\n
value of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to
\n
the introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a
\n
lesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk
\n
was updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The
\n
aim of both adjustments is to better reflect the underlying credit risk after initial recognition.
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- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect
\n
exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks,
\n
which are included in the standard staging assessment since the fourth quarter of 2024.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in
\n
\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly
\n
offset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial
\n
assets at fair value through OCI\u2019 (FVOCI) category.
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\u2022 Impairment: stable in 2024 compared to 2023:
\n
- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2).
\n
\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to
\n
modifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage
\n
1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros
\n
in 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or
\n
losses are recognised under impairment (see Note 3.9).
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\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject
\n
to enforcement activities; the corresponding figure for 2023 was 59 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 1 Stage 2 Stage 3 (purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR) 12-month ECL lifetime ECL lifetime ECL impaired) Total
2024
Impairment on 1 January 146 490 1 750 88 2 474
Movements with an impact on results1 31 -154 334 49 260
Transfer of financial assets
Stage 1 (12-month ECL) -11 76 43 0 108
Stage 2 (lifetime ECL) 19 -112 98 0 4
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 12 -31 -1 -20
New financial assets2 56 14 6 0 76
Changes in risk parameters during the reporting period -23 -81 242 50 188
Changes in the model or methodology 1 -35 -1 0 -35
Derecognised financial assets3-11 -28 -35 -1 -75
Other 0 0 12 1 13
Movements without an impact on results -1 -6 -280 1 -286
Derecognised financial assets3-1 -2 -234 -1 -238
Changes in the scope of consolidation 1 -1 0 0 0
Transfers under IFRS 5 0 0 0 0 0
Other -1 -3 -46 2 -48
Impairment on 31 December 176 331 1 803 138 2 448
2023
Impairment on 1 January 110 635 1 796 77 2 619
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 assets2 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 assets3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets3-2-1-207-1-211
Changes in the scope of consolidation 0 0 0 0 0
Transfers under IFRS 50 0 0 0 0
Other 0019120
Impairment on 31 December 146 490 1 750 88 2 474
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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 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt
\n
securities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited.
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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 specified in that 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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
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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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\u2022 The loan portfolio accounts for the largest share of the financial assets. Based on internal management reports, the
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\n
risk\u2019). All parts of that particular section which have been audited by the statutory auditor are specified in that section.
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\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
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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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\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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Note 4.4: Fair value of financial assets and liabilities \u2013 general
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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 cost cost
Carrying
(in millions of EUR) value Fair value Carrying value Fair value
31-12-2024
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 23 360 23 635 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 191 285 186 569 \u2013 \u2013
Debt securities 50 075 48 205 \u2013 \u2013
Other 1 154 1 154 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -1 930 \u2013 \u2013 \u2013
Total 263 945 259 564 \u2013 \u2013
Level 1 \u2013 44 892 \u2013 \u2013
Level 2 \u2013 25 400 \u2013 \u2013
Level 3 \u2013 189 272 \u2013 \u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 31 439 31 263
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 272 428 272 595
Liabilities under investment contracts \u2013 \u2013 27 27
Other \u2013 \u2013 2 157 2 153
Total \u2013 \u2013 306 050 306 038
Level 1 \u2013 \u2013 \u2013 16
Level 2 \u2013 \u2013 \u2013 101 305
Level 3 \u2013 \u2013 \u2013 204 717
31-12-2023
FINANCIAL ASSETS
Loans and advances to credit institutions and investment firms (incl. reverse repos) 28 135 28 100 \u2013 \u2013
Loans and advances to customers (incl. reverse repos) 182 921 175 381 \u2013 \u2013
Debt securities 51 372 48 976 \u2013 \u2013
Other 1 196 1 196 \u2013 \u2013
Adjustment for fair value hedges for a portfolio of interest rate risk -2 402 \u2013 \u2013 \u2013
Total 261 223 253 653 \u2013 \u2013
Level 1 \u2013 45 992 \u2013\u2013
Level 2 \u201331 953 \u2013\u2013
Level 3 \u2013 175 708 \u2013\u2013
FINANCIAL LIABILITIES
Deposits from credit institutions and investment firms (incl. repos)\u2013 \u2013 18 272 18 142
Deposits from customers and debt securities (incl. repos)\u2013 \u2013 260 028 259 713
Liabilities under investment contracts \u2013\u20132929
Other \u2013 \u2013 2 546 2 533
Total \u2013 \u2013 280 874 280 417
Level 1 \u2013\u2013\u2013 119
Level 2 \u2013\u2013\u2013 99 879
Level 3 \u2013\u2013\u2013 180 418
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\u2022 The difference between the fair value and the carrying value of the financial instruments at amortised cost (the unrealised
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losses, mainly on the debt securities portfolio) was caused by interest rate movements in 2024, 2023 and 2022. As a hold-to-
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collect business model is applied on the assets side, interim changes in fair value are less relevant. Taking into account i) KBC\u2019s
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large stock of high-quality liquid assets (approximately 101 billion euros on average in 2024), which consist of cash and bonds
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which can be repoed in the private market and at the central banks, ii) the fact that 56% of total customer deposits at KBC
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are covered by the Deposit Guarantee and iii) the fact that 86% of total customer deposits consist of more stable retail and
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SME clients, the unrealised losses on the debt securities portfolio at amortised cost do not need to be realised for liquidity
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purposes and are therefore irrelevant from a capital perspective.
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\u2022 Also see the paragraph on the outlier stress test under \u2018Market risk in non-trading activities\u2019 in the \u2018How do we manage our
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risks?\u2019 section.
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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 on 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 20 million euros were not recorded in the revaluation reserve in 2024
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(35 million euros in 2023). The fair value of this reclassified portfolio (after redemptions) amounted to 1 761 million euros at year-
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end 2024 (2 808 million euros at year-end 2023).
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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag114": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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
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agricultural sector, and cement and steel producers. See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag115": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
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programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
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in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
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Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
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time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
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etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
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outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
\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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
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section for a more detailed explanation.
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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:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag120": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
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(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
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contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
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frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
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governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
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been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
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usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
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are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
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been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
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projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
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2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
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in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
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this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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
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agricultural sector, and cement and steel producers. See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag118": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
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(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
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These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
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The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
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sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
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Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
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\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
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\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
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issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
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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 state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
\n
this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
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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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag122": { "value": "\n

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Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
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The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
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these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
\n
The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
\n
\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
\n
this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
\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 or other financial assets received.
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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:DisclosureOfNetAssetValueAttributableToUnitholdersExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag123": { "value": "\n
Note 4.1: Financial assets and liabilities, breakdown by portfolio and product
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Measu-Manda-
red at torily
fair measured
value at fair
through value
Measu-other through Desig-
red 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, 31-12-2024
Loans and advances to credit institutions and investment firms (excl. reverse 2 438 0 0 1 0 0 2 439
repos)
of which loans and advances to banks repayable on demand and term loans to banks at not 225
more than three months
Loans and advances to customers (excluding reverse repos) 191 124 0 943 0 0 0 192 067
Trade receivables 2 887 0 0 0 0 0 2 887
Consumer credit 6 316 0 633 0 0 0 6 949
Mortgage loans 77 750 0 309 0 0 0 78 059
Term loans 90 754 0 1 0 0 0 90 755
Finance lease 7 919 0 0 0 0 0 7 919
Current account advances 4 790 0 0 0 0 0 4 790
Other 708 0 0 0 0 0 708
Reverse repos2 21 083 0 0 0 0 0 21 083
with credit institutions and investment firms 20 922 0 0 0 0 0 20 922
with customers 162 0 0 0 0 0 162
Equity instruments 0 1 722 10 902 0 0 2 633
Investment contracts (insurance)3 0 0 16 602 0 0 0 16 602
Debt securities issued by 50 075 22 539 70 5 021 0 0 77 705
Public bodies 41 955 18 165 0 3 360 0 0 63 480
Credit institutions and investment firms 5 982 2 510 0 1 593 0 0 10 085
Corporates 2 139 1 864 70 68 0 0 4 140
Derivatives 0 0 0 4 584 0 271 4 856
Other4 1 154 0 0 0 0 0 1 154
Total 265 875 24 261 17 624 10 509 0 271 318 540
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
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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
Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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).
\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 \u2018Loans and advances to customers\u2019 also includes loans whose interest payments are linked to ESG targets of the client
\n
(\u2018Sustainability-linked loans\u2019). These are described in our 2024 Sustainability Report, in table 5.4 (this has not been audited).
\n
The contractual cashflows of these loans are deemed to be solely payments of principal and interest on the principal amount
\n
(SPPI), since the variability in interest payments resulting from the ESG component reflects the instrument\u2019s credit risk. For
\n
these loans, the margin on interest payments depends on whether or not the borrower meets the contractual ESG targets.
\n
These may be climate-related, environmental or social targets. This item also includes loans provided to clients which
\n
contribute to ESG targets. These are loans that fully or partially meet the EU Taxonomy criteria or the criteria of sustainability
\n
frameworks of other external parties, such as the European Investment Bank, the Loan Market Association (LMA) or local
\n
governments. These amounts are also described in our 2024 Sustainability Report, in table 5.5 (this has not been audited).
\n
The \u2018Debt securities\u2019 item also includes bonds purchased by KBC that were issued to finance investments containing a
\n
sustainability component. These bonds comply with the ICMA Green Bond Principles, the Social Bond Principles or the
\n
Sustainability Bond Guidelines. These amounts are also described in our 2024 Sustainability Report, in table 5.6 (this has not
\n
been audited).
\n
\u2022 \u2018Deposits from credit institutions and investment firms\u2019 include the (remaining) funding obtained from the ECB\u2019s TLTRO
\n
programme. While this item still included an amount of 2.6 billion euros at year-end 2023, the remaining sum reached maturity
\n
in the first half of 2024.
\n
\u2022 \u2018Non-convertible bonds\u2019 comprise mainly KBC Bank, KBC Group, \u010cSOB (Czech Republic) and KBC IFIMA issues. They are
\n
usually recognised under \u2018Measured at amortised cost\u2019. However, if they contain closely related embedded derivatives, they
\n
are recorded under \u2018Designated at fair value\u2019 (see accounting policies). In 2024, these items also include three green bonds
\n
issued by KBC (for 500, 750 and 750 million euros each) and two social bonds (for 750 and 750 million euros each), which have
\n
been recognised at amortised cost. The purpose of these bonds is to fund loans to our clients intended for green or social
\n
projects; however, the cashflows of these bonds themselves are not linked to any ESG targets. More information on our Green
\n
Bond Framework and our Social Bond Framework is available at www.kbc.com.
\n
\u2022 More information on major new debt issues or redemptions is provided under the \u2018Consolidated cashflow statement\u2019.
\n
\u2022 The state note issued by the Kingdom of Belgium, with a term of one year and totalling 22 billion euros, matured in September
\n
2024. This temporarily resulted in exceptional promotions offered by various banks in Belgium to secure the money invested
\n
in the state note. KBC managed to attract around 6.5 billion euros in core client money in September 2024 (6.0 billion euros in
\n
time deposits, 1.2 billion euros in savings certificates and 0.9 billion euros in other client money (investment funds, life insurance,
\n
etc.), partly offset by a shift of -1.6 billion euros in demand deposits and savings accounts), exceeding the 5.7-billion-euro
\n
outflow to the state note in September 2023. Please note that the relaunch of the savings certificate in Belgium means that
\n
this product is now part of \u2018Subtotal deposits from customers\u2019 with retrospective effect.
\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 or other financial assets received.
\n
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Transferred financial assets that continue to be recognised in their entirety (carrying value, in millions of EUR)31-12-2024 31-12-2023
Transferred financial assets that continue to be recognised in their entirety: repo transactions and securities lent out 27 079 19 065
Held for trading 1 549 622
Fair value through OCI 4 866 1 172
Amortised cost 20 664 17 271
Associated financial liability 18 623 3 214
Held for trading 1 147 126
Fair value through OCI 3 439183
Amortised cost 14 037 2 905
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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 \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019
\n
section for a more detailed explanation.
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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) 20242023
TotalPAABBAVFATotalPAABBAVFA
Life
Reinsurance assets 20 20 \u2014 \u201400\u2014\u2014
Insurance contract liabilities 13 925 57 12 899 969 13 862 55 12 878 928
LRC (liability for remaining coverage) 13 718 2 12 769 948 13 674 2 12 762 910
Unit-linked 823 0 \u2014 823 798 0 \u2014 798
Non-unit-linked 11 931 2 11 929 \u2014 12 651 2 12 650 \u2014
Hybrid 964 0 840 125 225 0 112 112
Accepted reinsurance 0 0 0 0 0 0 0 0
LIC (liability for incurred claims) 207 55 130 22 188 53 116 18
Unit-linked 19 0 \u2014 19 13 0 \u2014 13
Non-unit-linked 168 55 112 \u2014 153 53 99 \u2014
Hybrid 21 0 18 3 21 0 17 4
Accepted reinsurance 0 0 0 0 0 0 0 0
Assets for acquisition cost 0 0 0 0 0 0 0 0
Non-life
Reinsurance assets 98 98 \u2014 \u2014 64 64 \u2014\u2014
Insurance contract liabilities 3 186 2 971 214 \u2014 2 922 2 716 206 \u2014
LRC (liability for remaining coverage) 744 547 196 \u2014 701 512 190 \u2014
Personal insurance 211 14 196 \u2014 205 16 190 \u2014
Motor Third-Party Liability (MTPL) 156 156 \u2014 \u2014 160 160 \u2014\u2014
Liabilities other than MTPL 25 25 \u2014 \u2014 25 25 \u2014\u2014
Casco 118 118 \u2014 \u2014 96 96 \u2014\u2014
Property other than casco 234 234 \u2014 \u2014 216 216 \u2014\u2014
Accepted reinsurance -1 -1 0 \u2014 0 0 0 \u2014
LIC (liability for incurred claims) 2 442 2 424 18 \u2014 2 220 2 204 16 \u2014
Personal insurance 656 638 18 \u2014 610 594 16 \u2014
Motor Third-Party Liability (MTPL) 935 935 \u2014 \u2014 863 863 \u2014\u2014
Liabilities other than MTPL 401 401 \u2014 \u2014 357 357 \u2014\u2014
Casco 66 66 \u2014 \u2014 53 53 \u2014\u2014
Property other than casco 364 364 \u2014 \u2014 319 319 \u2014\u2014
Accepted reinsurance 20 20 0 \u2014 18 18 0 \u2014
Assets for acquisition cost 0 0 0 \u2014 0 0 0 \u2014
\n\n\n\n\n\n
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\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
\n
key assumptions are:
\n
- Lapse and dormancy rates at both contract and premium level, as well as mortality and morbidity rates, based on
\n
standard mortality tables and adapted where necessary to reflect the group\u2019s own experience.
\n
- Operating expense assumptions which reflect the projected costs of maintaining and servicing in-force policies and
\n
associated overhead expenses which are considered directly attributable. Expenses are considered directly attributable
\n
if they are 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
\n
assumptions for the entire group.
\n
\u2022 Assumptions for LIC are based on past claims experience relating to claim numbers, claim payments and claims handling
\n
costs, and adjusted to take account of such factors as anticipated market experience, claims inflation and external factors
\n
such as court awards, legislation and discounting.
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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
\n
the individual benefit components separately and (b) weights are assigned to each component to reflect an appropriate
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level of service to be provided. Such weightings appropriately reflect the release of CSM based on the quantity of the benefits
\n
provided for each service. Analogous to coverage units, these weights are also reassessed at the end of each reporting
\n
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
\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.
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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
\n
risk, from the unit-linked to the non-unit-linked component and vice versa.
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\u2022 Non-life LRC BBA (196 million euros in 2024, 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 (638 million euros in 2024, 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.
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\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.
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\u2022 Current account transactions with intermediaries and reinsurers are not included in the measurement of insurance liabilities
\n
but treated as a separate asset measured under IFRS 9.
\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 Solvency II volatility adjustment and one without (the latter is used for VFA liabilities; the former is used for all other
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liabilities for which bottom-up curves are used).
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Yield curve used to discount cashflows not varying based on underlying items; bottom-up method (forward rates)
CurrencyIlliquidity premiumPortfolio duration
1 year 5 years 10 years 20 years
2024
EUR with volatility adjustment 1.91% 2.61% 2.84% 2.14%
without volatility adjustment 1.67% 2.37% 2.60% 1.91%
CZK with volatility adjustment 4.01% 3.93% 4.30% 4.20%
without volatility adjustment 3.84% 3.76% 4.12% 4.03%
HUFwith volatility adjustment6.92% 6.93% 7.39% 6.55%
without volatility adjustment 6.84% 6.85% 7.30% 6.48%
BGN with volatility adjustment 1.94% 2.58% 2.83% 2.19%
without volatility adjustment 1.78% 2.42% 2.67% 2.03%
2023
EURwith volatility adjustment3.14%2.51%2.96%2.34%
without volatility adjustment 2.92% 2.29% 2.74% 2.13%
CZK with volatility adjustment 4.83% 3.19% 3.70% 3.98%
without volatility adjustment 4.67%3.03% 3.54% 3.82%
HUF with volatility adjustment 5.55% 5.25% 6.29% 5.49%
without volatility adjustment 5.44% 5.14% 6.18% 5.38%
BGN with volatility adjustment 3.16% 2.50% 3.00% 2.43%
without volatility adjustment 2.84% 2.18%2.68% 2.11%
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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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured PAA
under PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 13 667 7 134 50 3 13 862
Insurance service result -435 24 225 19 0 -168
Insurance revenues -463 \u2014 \u2014 \u2014 \u2014 -463
BBA + VFA by transition method -432 \u2014 \u2014 \u2014 \u2014 -432
Modified retrospective approach -9 \u2014 \u2014 \u2014 \u2014 -9
Fair value approach -280 \u2014 \u2014 \u2014 \u2014 -280
Other -143 \u2014 \u2014 \u2014 \u2014 -143
PAA -31 \u2014 \u2014 \u2014 \u2014 -31
Insurance service expenses 28 24 225 19 0 296
Incurred claims (excl. repayments of investment components) \u2014 -2 156 14 1 169
Incurred costs other than claims 0 -2 99 3 0 100
Amortised acquisition expenses 28 \u2014 \u2014 \u2014 \u2014 28
Changes in fulfilment cashflows that relate to future service \u2013 loss on \u2014 28 \u2014 \u2014 \u2014 28
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 -29 1 -1 -29
Investment components -2 591 \u2014 2 591 \u2014 \u2014 0
Investment result 6 0 \u2014 \u2014 \u2014 6
Net result from financial instruments at fair value through profit or loss 6 0 \u2014 \u2014 \u2014 6
Insurance finance income and expense 490 1 2 2 0 495
In P&L 292 1 2 1 0 296
In OCI 198 0 0 1 0 199
Total changes in comprehensive income -2 529 25 2 818 20 0 334
Total cashflows 2 585 \u2014 -2 798 -19 \u2014 -232
Premiums received2 712 \u2014 \u2014 \u2014 \u2014 2 712
Claims paid \u2014 \u2014 -2 699 -16 \u2014 -2 715
Costs other than claims paid \u2014 \u2014 -99 -3 \u2014 -102
Acquisition costs paid -127 \u2014 \u2014 \u2014 \u2014 -127
Other -37 0 -2 0 0 -39
Closing balance 13 686 32 152 52 4 13 925
2023
Opening balance13 258 1012647313 444
Insurance service result -381 -2 218 16 1 -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 expenses 19-2218161251
Incurred claims (excl. repayments of investment components)\u2013-1156131169
Incurred costs other than claims0-7922\u201387
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 \u2013 1 284 \u2013 \u2013 0
Investment result 0 0 \u2014 \u2014 \u2014 0
Net result from financial instruments at fair value through profit or loss 0 0\u2014\u2014\u2014 0
Insurance finance income and expense 815 0 3 3 0 821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows 1 271 \u2013 -1 497 -16 \u2013 -242
Premiums received1 401 \u2013 \u2013 \u2013 \u2013 1 401
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 balance 13 667 7 134 50 3 13 862
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\u2022 In the transition from IFRS 4 to IFRS 17 on 1 January 2022, KBC applied the Full Retrospective Approach (FRA) for recent years.
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Applying the FRA for non-recent years was impracticable due to either a lack of historical data (data and hypotheses) or high
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costs associated with making information from the past available for FRA transition calculations. Where the FRA was
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impracticable, the Fair Value Approach (FVA) was predominantly used to determine the CSM on the transition date. The
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Modified Retrospective Approach (MRA) was rarely applied as this transition approach was overly complex and the costs did
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not outweigh the benefits. KBC calculated a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently
\n
adjusted a few assumptions or parameters. The adjustments related to the inclusion in the IFRS 13 fair value of total expenses,
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i.e. including non-directly attributable expenses, and to the inclusion of a risk premium that covers not only non-financial risk,
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but also system and integration expenses and capital funding costs. All past years were combined into a single cohort for the
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FVA transition calculations. The FVA CSM ensued from cost and risk margin differences under IFRS 17 and IFRS 13 measurement
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approaches. Due to the application of the FVA on the transition date in accordance with the transition exemptions provided
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in IFRS 17, the OCI amount was set at nil.
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\u2022 Movement in insurance liabilities in 2024:
\n
- Due to the further decrease in market interest rates during 2024, an expense in OCI of 199 million euros before tax is
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recognised as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance
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income and expense between P&L and OCI.
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- The movement in the investment component of 2 591 million euros from LRC to LIC indicates the amounts of contracts
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coming at maturity or lapsed and includes 866 million euros resulting from the surrender in 2024 of individual pension
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agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
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policyholders of the relevant contracts were given the opportunity to invest in unit-linked products.
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\u2022 Movement in insurance liabilities in 2023:
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- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised
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as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income
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and 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
\n
coming 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, and 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
\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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured under
PAA
PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 700 1 16 1 964 240 2 922
Insurance service result -1 952 3 31 1 606 10 -303
Insurance revenues -2 482 \u2014 \u2014 \u2014 \u2014 -2 482
BBA by transition method -39 \u2014 \u2014 \u2014 \u2014 -39
Modified retrospective approach 0 \u2014 \u2014 \u2014 \u2014 0
Fair value approach -29 \u2014 \u2014 \u2014 \u2014 -29
Other -11 \u2014 \u2014 \u2014 \u2014 -11
PAA -2 443 \u2014 \u2014 \u2014 \u2014 -2 443
Insurance service expenses 530 3 31 1 606 10 2 179
Incurred claims (excl. repayments of investment components) \u2014 -1 28 1 251 65 1 343
Incurred costs other than claims 0 0 3 232 0 236
Amortised acquisition expenses 529 \u2014 \u2014 \u2014 \u2014 529
Changes in fulfilment cashflows that relate to future service \u2013 loss \u2014 4 \u2014 \u2014 \u2014 4
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 0 122 -55 66
Investment components 0 \u2014 0 \u2014 \u2014 0
Insurance finance income and expense 7 0 0 58 7 72
In P&L 1 0 0 39 5 45
In OCI 6 0 0 18 2 26
Total changes in comprehensive income -1 945 3 31 1 664 17 -231
Total cashflows 1 991 \u2014 -29 -1 453 \u2014 509
Premiums received2 532 \u2014 \u2014 \u2014 \u2014 2 532
Claims paid \u2014 \u2014 -26 -1 222 \u2014 -1 248
Costs other than claims paid \u2014 \u2014 -3 -231 \u2014 -234
Acquisition costs paid -540 \u2014 \u2014 \u2014 \u2014 -540
Other -6 0 0 -6 -1 -14
Closing balance 740 4 182 168 256 3 186
2023
Opening balance6751141 8022222 714
Insurance service result -1 789 0 28 1 343 7 -410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach 0\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 expenses 491 0 28 1 343 7 1 869
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 components 0 \u2013 0 \u2013 \u2013 0
Insurance finance income and expense -48 0 1 89 12 54
In P&L00027430
In OCI-480063824
Total changes in comprehensive income -1 837 0 29 1 433 19 -356
Total cashflows 1 862 \u2013 -27 -1 288 \u2013 547
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
Other 10017018
Closing balance 700 1 16 1 964 240 2 922
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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
of future Risk Total insurance
cashflows adjustment contract
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin liabilities
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
2024
Opening balance 11 538 152 47 1 387 683 13 807
Insurance service result -212 41 -2 -125 138 -159
Changes that relate to future service -201 53 4 -11 182 28
New business -245 29\u2013\u2013 230 14
Changes in estimates reflected in the CSM 32 23 4-11-48 0
Changes in estimates that result in onerous contract 13 1\u2013\u2013\u2013 14
losses and reversals
Changes that relate to current service 16 -9 -5 -114 -44 -157
CSM recognised in P&L 0--5-114-44-163
Changes in the risk adjustment (expected) 0-9\u2013\u2013\u2013-9
Experience adjustments 16-\u2013\u2013\u2013 16
Changes to liabilities for incurred claims related to past -27 -3 \u2013 \u2013 \u2013 -29
service
Investment result 6 - \u2013 \u2013 \u2013 6
Net result from financial instruments at fair value through P&L 6-\u2013\u2013\u2013 6
Insurance finance income and expense 466 4 1 10 13 493
In P&L 269 3 1 10 13 295
In OCI 197 1--- 198
Total changes in comprehensive income 260 44 -1 -115 151 341
Total cashflows -241\u2013 \u2013 \u2013 \u2013 -241
Premiums received 2 681\u2013\u2013\u2013\u20132 681
Claims paid -2 699\u2013\u2013\u2013\u2013-2 699
Costs other than claims paid -99\u2013\u2013\u2013\u2013-99
Acquisition costs paid -124\u2013\u2013\u2013\u2013-124
Other changes -28 -1 -3 -4 -3 -39
Closing balance 11 529 195 43 1 268 832 13 868
2023
Opening balance11 378112451 37748013 393
Insurance service result -390 47 -1 8 198 -139
Changes that relate to future service -399 56 4 120 224 5
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
Investment result 0 \u2013 \u2013 \u2013 \u2013 0
Net result from financial instruments at fair value through P&L0\u2013\u2013\u2013\u20130
Insurance finance income and expense 809 -7 1 9 7 818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income 418 40 0 16 205 679
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 -1 2 -6 -1 -14
Closing balance 11 538 152 47 1 387 683 13 807
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
\n
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- Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by
\n
the insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity
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- Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected
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\u2022 Main movements in 2024 and 2023: the 43-million-euro increase in the risk adjustment in 2024 is mostly related to a model
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change to take into account the risk that clients stop paying premiums for long-term life insurance contracts. The movement
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value
of future Risk
cashflows adjustment Total insurance
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin contract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2024
Opening balance 8 71 52 74 206
Insurance service result -72 60 -21 26 -7
Changes that relate to future service -74 62 -19 31 0
New business -21 3 \u2014 18 0
Changes in estimates reflected in the CSM -52 58 -19 13 0
Changes in estimates that result in onerous contract 0 0 \u2014 \u2014 0
losses and reversals
Changes that relate to current service 1 -1 -2 -5 -7
CSM recognised in P&L \u2014 \u2014 -2 -5 -7
Changes in the risk adjustment (expected) \u2014 -1 \u2014 \u2014 -1
Experience adjustments 1 \u2014 \u2014 \u2014 1
Changes to liabilities for incurred claims related to past 0 0 \u2014 \u2014 0
service
Insurance finance income and expense 15 -9 0 1 7
In P&L -1 1 0 1 1
In OCI 16 -10 \u2014 \u2014 6
Total changes in comprehensive income -57 51 -21 27 -1
Total cashflows 9 \u2014 \u2014 \u2014 9
Premiums received 46 \u2014 \u2014 \u2014 46
Claims paid -26 \u2014 \u2014 \u2014 -26
Costs other than claims paid -3 \u2014 \u2014 \u2014 -3
Acquisition costs paid -8 \u2014 \u2014 \u2014 -8
Other changes 0 0 0 0 0
Closing balance -40 122 31 101 214
2023
Opening balance17759367252
Insurance service result 11 16 -41 7 -7
Changes that relate to future service 9 19 -38 10 0
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 service 2 -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 -19 0 1 -48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income -17 -4 -41 7 -54
Total cashflows 8 \u2013 \u2013 \u2013 8
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 changes 0 0 0 0 0
Closing balance 8 71 52 74 206
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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 6-million-euro increase in 2024 is attributable to
\n

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a slight decline in the yield curve. A typical feature of the hospitalisation portfolio is that interest rate movements have a
\n
greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums are levelled (constant \u2018cash in\u2019 during
\n
the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019 more towards the end of the contract).
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\u2022 The 52-million-euro drop in the present value of future cashflows for changes in estimates reflected in the CSM in 2024 is due
\n
to a model update in which expected higher claims result in higher premiums. A higher premium volume generates more future
\n
profit and, as a result, lower fulfilment cashflows. The 58-million-euro increase in changes in estimates reflected in the CSM in
\n
the risk adjustment in 2024 was accounted for by a model change involving a more conservative estimate of the uncertainty
\n
of claim costs related to hospitalisation.
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Note 5.6.6: New business (BBA/VFA)
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(in millions of EUR) (Re)insurance contracts issued (Re)insurance contracts acquired Total
Not onerous OnerousNot onerousOnerous
2024
Estimates of present value of cash outflows 2 942 625 0 0 3 567
Expected claims 2 645 593 0 0 3 238
Expected other insurance service expenses 151 19 0 0 170
Insurance acquisition cashflows 145 13 0 0 159
Estimates of present value of cash inflows -3 218 -614 0 0 -3 833
Risk adjustment for non-financial risk 29 3 0 0 32
Contractual service margin 248 \u2014 0 \u2014 248
Increase in insurance contract liabilities: loss component \u2014 14 \u2014 0 14
2023
Estimates of present value of cash outflows 1 194 212 0 0 1 406
Expected claims1 034171001 205
Expected other insurance service expenses63190082
Insurance acquisition cashflows972200119
Estimates of present value of cash inflows -1 378 -207 0 0 -1 585
Risk adjustment for non-financial risk 16 2 0 0 18
Contractual service margin 166 - 0 0 166
Increase in insurance contract liabilities: loss component \u2013 7 \u2013 0 7
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\u2022 \u2018Estimates of present value of cash outflows\u2019 includes 866 million euros resulting from the surrender in 2024 of individual pension
\n
agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
\n
policyholders of the relevant contracts were given the opportunity to invest in unit-linked products. The net impact of this
\n
migration on the CSM is a 96-million-euro increase (see also Note 5.6.2).
\n
\u2022 The sale of business with a loss component in 2024 was largely attributable to commercial campaigns in response to the
\n
Belgian state note maturing in September 2024. This new business was created with a market-driven competitive guaranteed
\n
interest rate (see also Note 4.1).
\n

\n\n\n\n\n\n\n\n\n\n\n
Note 5.6.7: Future CSM recognition in profit and loss on insurance contracts (at the end of the reporting period) (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
CSM recognition in P&L in the \u2026 following reporting year
(in millions of EUR) 1st year 2nd year 3rd year 4th year 5th year 6-10th year +10th year
2024
Life 153 145 138 132 126 548 1 023
Non-life 7 7 7 6 6 27 57
2023
Life 149 142 135 129 122 529 973
Non-life 6 6 6 6 5 24 51
\n\n\n\n\n
\n
\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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Of which Life
direct
participation
(in millions of EUR) Life (VFA) Non-lifeNon-technicalTotal
2024
Total (underlying) assets 30 414 967 4 204 1 845 36 463
At amortised cost 1 886 0 2 887 1 047 5 819
At FVOCI 11 753 15 1 221 593 13 568
Debt securities 10 698 15 993 373 12 064
Equity instruments 1 055 0 228 220 1 504
At FVPL (excl. derivatives) 16 666 951 0 8 16 673
Instruments backing unit-linked contracts 16 602 951 \u2014 \u2014 16 602
Other 64 0 0 8 71
At FVO 0 0 0 0 0
Property and equipment and investment property 109 0 97 198 403
2023
Total (underlying) assets 27 930 928 4 152 1 686 33 769
At amortised cost 1 9490 2 926 882 5 757
At FVOCI 11 490 15 1 158 590 13 238
Debt securities 10 441 15 933 386 11 759
Equity instruments1 050 0 225 204 1 479
At FVPL (excl. derivatives) 14 364 913 0 8 14 372
Instruments backing unit-linked contracts14 348 912 \u2013\u201314 348
Other16 1 0 8 24
At FVO 0 0 0 0 0
Property and equipment and investment property 127 0 68 207 401
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\u2022 The table also includes the assets backing the liabilities under investment contracts (IFRS 9).
\n
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
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 20242023
OCI that may be recycled to P&L -26 340
Net change in revaluation reserve (FVOCI debt instruments) -26 340
Fair value adjustments before tax -33 446
Deferred tax on fair value changes 9 -108
Transfer from reserve to net result -1 2
Impairment -2 2
Net gains/losses on disposal 0 0
Deferred taxes 0 -1
OCI that will not be recycled to P&L 101 110
Net change in revaluation reserve (FVOCI equity instruments) 101 110
Fair value adjustments before tax 101 110
Deferred tax on fair value changes 0 0
\n\n\n\n\n
\n
\u2022 IFRS 17 allows simplifications to set the accumulated OCI for the insurance liabilities at nil at the transition date while
\n
maintaining the accumulated OCI for the covering financial assets. This disclosure gives insight into the mismatch between
\n
covering financial assets and insurance liabilities as it distorts classification within equity at transition date and subsequently
\n
the years thereafter until the portfolio subject to the transition approach reaches maturity.
\n
\u2022 See also \u2018Consolidated statement of comprehensive income\u2019.
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\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag140": { "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
Measured
at
amortised Designated
cost Held for at fair value Hedging
(in millions of EUR) (AC) trading (HFT) (FVO)derivativesTotal
FINANCIAL LIABILITIES, 31-12-2024
Deposits from credit institutions and investment firms (excl. repos) 12 852 0 0 0 12 852
of which deposits from banks repayable on demand 6 456
Deposits from customers and debt securities (excl. repos) 270 030 22 1 035 0 271 087
Demand deposits (incl. special deposits and other deposits) 110 090 0 0 0 110 090
Time deposits 42 781 22 163 0 42 966
Savings accounts 74 440 0 0 0 74 440
Savings certificates 1 250 0 0 0 1 250
Subtotal deposits from customers 228 562 22 163 0 228 747
Certificates of deposit 14 376 0 5 0 14 382
Non-convertible bonds 24 185 0 745 0 24 930
Non-convertible subordinated liabilities 2 907 0 121 0 3 028
Repos5 20 985 94 0 0 21 079
with credit institutions and investment firms 18 587 94 0 0 18 681
with customers 2 398 0 0 0 2 398
Liabilities under investment contracts3 27 0 15 644 0 15 671
Derivatives 0 4 679 0 316 4 995
Short positions 0 882 0 0 882
In equity instruments 0 9 0 0 9
In debt securities 0 872 0 0 872
Other6 2 157 0 0 0 2 157
Total 306 050 5 677 16 680 316 328 723
FINANCIAL LIABILITIES, 31-12-2023
Deposits from credit institutions and investment firms (excl. repos) 15 013 0 0 0 15 013
of which deposits from banks repayable on demand 6 136
Deposits from customers and debt securities (excl. repos) 258 051 81 1 359 0 259 491
Demand deposits (incl. special deposits and other deposits) 107 568 0 0 0 107 568
Time deposits 37 770 81 194 0 38 044
Savings accounts 70 810 0 0 0 70 810
Savings certificates 79 0 0 0 79
Subtotal deposits from customers 216 227 81 194 0 216 501
Certificates of deposit 16 840 0 6 0 16 846
Non-convertible bonds 22 294 0 1 045 0 23 339
Non-convertible subordinated liabilities 2 690 0 114 0 2 804
Repos5 5 235 40 0 0 5 275
with credit institutions and investment firms 3 259 40 0 0 3 298
with customers 1 976 0 0 0 1 976
Liabilities under investment contracts3 29 0 13 432 0 13 461
Derivatives 0 5 501 0 401 5 902
Short positions 0 1 428 0 0 1 428
In equity instruments 0 6 0 0 6
In debt securities 0 1 421 0 0 1 421
Other6 2 546 0 0 0 2 547
Total 280 874 7 050 14 791 401 303 116
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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).
\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.
\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:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag166": { "value": "\n

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Note 4.2.1: Impaired financial assets
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Carrying value before Carrying value after
(in millions of EUR) impairmentImpairmentimpairment
31-12-2024
Financial assets at amortised cost: Loans and advances* 217 093 -2 448 214 645
Stage 1 (12-month ECL) 197 031 -176 196 855
Stage 2 (lifetime ECL) 16 177 -331 15 847
Stage 3 (lifetime ECL) 3 472 -1 803 1 669
Purchased or originated credit impaired assets (POCI) 414 -138 276
Financial assets at amortised cost: Debt securities 50 084 -8 50 075
Stage 1 (12-month ECL) 49 979 -6 49 973
Stage 2 (lifetime ECL) 100 -1 99
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 securities 22 543 -4 22 539
Stage 1 (12-month ECL) 22 543 -4 22 539
Stage 2 (lifetime ECL) 0 0 0
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
31-12-2023
Financial assets at amortised cost: Loans and advances* 213 531 -2 474 211 057
Stage 1 (12-month ECL) 175 853 -146 175 708
Stage 2 (lifetime ECL) 33 571 -490 33 081
Stage 3 (lifetime ECL) 3 694 -1 750 1 944
Purchased or originated credit impaired assets (POCI) 412 -88 324
Financial assets at amortised cost: Debt securities 51 384 -12 51 372
Stage 1 (12-month ECL) 51 300 -6 51 294
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 securities 16 897 -5 16 892
Stage 1 (12-month ECL) 16 864 -4 16 861
Stage 2 (lifetime ECL) 33 -1 32
Stage 3 (lifetime ECL) 0 0 0
Purchased or originated credit impaired assets (POCI) 0 0 0
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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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\u2022 Carrying value (before impairment) of loans and advances at amortised cost: increase of 3.6 billion euros in 2024, due primarily
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to:
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- an organic net increase in the loan portfolio (mainly mortgage loans and term loans);
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- a decrease in the carrying value 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 17.4 billion euros in 2024,
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due primarily to:
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- the release 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 conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic
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risks (12.0 billion euros at year-end 2023).
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- In the first quarter of 2024, we initiated a combined net migration from \u2018Stage 2\u2019 to \u2018Stage 1\u2019 of loans with a gross carrying
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value of roughly 8.5 billion euros, resulting in a net release of 17 million euros in impairment. This was largely attributable to
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the introduction of the new multi-tier approach for assessing a significant increase in credit risk (see Note 1.2) and to a
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lesser extent to a migration of KBC Commercial Finance loans where the assessment of a significant increase in credit risk
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was updated based on the very low historical credit losses in this portfolio and the very short term of this type of loan. The
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aim of both adjustments is to better reflect the underlying credit risk after initial recognition.
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- Other factors explaining the decrease are mostly related to the continuous changes in staging of loans that have indirect
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exposure to military conflict, such as the one in Ukraine, and/or are vulnerable to geopolitical and macroeconomic risks,
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which are included in the standard staging assessment since the fourth quarter of 2024.
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\u2022 Carrying value (before impairment) of debt securities at amortised cost: decrease of 1.3 billion euros in 2024, almost entirely in
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\u2018Stage 1\u2019. This involves a movement of -1.4 billion euros in (issues by) public bodies and -0.2 billion euros for corporates, partly
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offset by +0.3 billion euros for credit institutions and related primarily to reinvestments of securities at maturity in the \u2018Financial
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assets at fair value through OCI\u2019 (FVOCI) category.
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\u2022 Impairment: stable in 2024 compared to 2023:
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- due to derecognised financial assets, partly offset by changes in risk parameters (see Note 4.2.2).
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\u2022 In 2024, \u2018Stage 2\u2019 and \u2018Stage 3\u2019 financial assets with a net carrying value of 474 million euros have been subject to
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modifications in 2024 that did not result in derecognition. The gross carrying value of financial assets moved back into \u2018Stage
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1\u2019 this year that have been subject to modifications in the past that did not result in derecognition came to 683 million euros
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in 2024. The corresponding figures for 2023 were 579 million euros and 1 001 million euros, respectively. Modification gains or
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losses are recognised under impairment (see Note 3.9).
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\u2022 In 2024, financial assets at amortised cost with a gross carrying value of 55 million euros were written off, but were still subject
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to enforcement activities; the corresponding figure for 2023 was 59 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 1 Stage 2 Stage 3 (purchased or
Subject to Subject to Subject to originated credit
(in millions of EUR) 12-month ECL lifetime ECL lifetime ECL impaired) Total
2024
Impairment on 1 January 146 490 1 750 88 2 474
Movements with an impact on results1 31 -154 334 49 260
Transfer of financial assets
Stage 1 (12-month ECL) -11 76 43 0 108
Stage 2 (lifetime ECL) 19 -112 98 0 4
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 12 -31 -1 -20
New financial assets2 56 14 6 0 76
Changes in risk parameters during the reporting period -23 -81 242 50 188
Changes in the model or methodology 1 -35 -1 0 -35
Derecognised financial assets3-11 -28 -35 -1 -75
Other 0 0 12 1 13
Movements without an impact on results -1 -6 -280 1 -286
Derecognised financial assets3-1 -2 -234 -1 -238
Changes in the scope of consolidation 1 -1 0 0 0
Transfers under IFRS 5 0 0 0 0 0
Other -1 -3 -46 2 -48
Impairment on 31 December 176 331 1 803 138 2 448
2023
Impairment on 1 January 110 635 1 796 77 2 619
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 assets2 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 assets3-15-45-58-2-121
Other 0 0 14 0 14
Movements without an impact on results-2-1-187-1-191
Derecognised financial assets3-2-1-207-1-211
Changes in the scope of consolidation 0 0 0 0 0
Transfers under IFRS 50 0 0 0 0
Other 0019120
Impairment on 31 December 146 490 1 750 88 2 474
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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
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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 12 million euros at year-end 2023 to 8 million euros at year-end 2024) and on debt
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securities at fair value through OCI (from 5 million euros at year-end 2023 to 4 million euros at year-end 2024) are very limited.
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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
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risk\u2019). All parts of that particular section which have been audited by the statutory auditor are specified in that 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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
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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
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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 2024.
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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 specified in that section.
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\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
\n
\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 4.3: 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)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
\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 2024.
\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 specified in that section.
\n\n
\u2022 Collateral and credit enhancements received are 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 Net
netting agreements and similar arrangements instruments off sheet Amounts not set off in the balance sheet amount
Financial Cash Securities
(in millions of EUR) instruments collateral collateral
31-12-2024
FINANCIAL ASSETS
Derivatives 20 538 15 682 4 856 2 459 1 797 0 600
Derivatives (excluding central clearing houses) 4 812 0 4 812 2 459 1 797 0 557
Derivatives with central clearing houses* 15 725 15 682 44 0 0 0 44
Reverse repos, securities borrowing and similar arrangements 29 933 8 850 21 083 14 0 21 067 3
Reverse repos 29 933 8 850 21 083 14 0 21 067 3
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 50 471 24 531 25 939 2 472 1 797 21 067 603
FINANCIAL LIABILITIES
Derivatives 19 214 14 219 4 995 2 459 540 78 1 918
Derivatives (excluding central clearing houses) 4 943 0 4 943 2 459 540 78 1 865
Derivatives with central clearing houses* 14 271 14 219 52 0 0 0 52
Repos, securities lending and similar arrangements 29 934 8 855 21 079 14 0 21 055 11
Repos 29 934 8 855 21 079 14 0 21 055 11
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 49 148 23 074 26 074 2 473 540 21 133 1 928
31-12-2023
FINANCIAL ASSETS
Derivatives 24 076 19 163 4 914 3 162 1 123 6 623
Derivatives (excluding central clearing houses) 4 821 0 4 821 3 162 1 123 6 531
Derivatives with central clearing houses* 19 255 19 163 93 0 0 0 93
Reverse repos, securities borrowing and similar arrangements 38 919 13 418 25 501 120 0 25 361 19
Reverse repos 38 919 13 418 25 501 120 0 25 361 19
Securities borrowing 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 62 996 32 581 30 415 3 282 1 123 25 367 643
FINANCIAL LIABILITIES
Derivatives 23 223 17 321 5 902 3 166 809 576 1 352
Derivatives (excluding central clearing houses) 5 796 0 5 796 3 166 809 576 1 245
Derivatives with central clearing houses* 17 427 17 321 106 0 0 0 106
Repos, securities lending and similar arrangements 18 693 13 418 5 275 120 0 5 112 43
Repos 18 693 13 418 5 275 120 0 5 112 43
Securities lending 0 0 0 0 0 0 0
Other financial instruments 0 0 0 0 0 0 0
Total 41 916 30 739 11 177 3 286 809 5 688 1 394
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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 1 462 million euros at year-end 2024 and 1 842 million euros at year-end 2023.
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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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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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, significant movements in financial assets and liabilities classified in level 3 of the fair value hierarchy included the
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- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances
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increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
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account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
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market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
\n
changes in market inputs.
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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 (not held for trading): the fair value of loans and advances
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increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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 at year-end 2024 (the same as at year-end 2023).
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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) 31-12-202431-12-2023
Carrying value Notional amounts* Carrying value Notional amounts*
AssetsLiabilitiesPurchasedSoldAssetsLiabilitiesPurchasedSold
Total 4 584 4 679 616 452 615 520 4 618 5 501 598 880 591 923
Interest rate contracts 1 589 1 781 429 232 426 678 1 821 2 252 403 723 395 170
of which interest rate swaps and futures 1 510 1 740 421 656 422 160 1 684 2 169 394 018 389 184
of which options 80 41 7 576 4 518 137 83 9 705 5 986
Foreign exchange contracts 2 193 1 784 172 410 174 374 2 318 2 481 180 438 182 719
of which currency and interest rate swaps, forward 2 101 1 720 167 819 167 306 2 246 2 409 176 708 176 829
foreign exchange transactions and futures
of which options 92 64 4 592 7 067 72 72 3 730 5 890
Equity contracts 799 1 110 14 530 14 191 471 761 14 381 13 698
of which equity swaps 646 692 11 348 10 995 385 393 11 314 11 031
of which options 153 418 3 181 3 196 85 368 3 067 2 667
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 4 3 280 277 8 7 338 336
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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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31-12-2024
(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 strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 37 727 37 727 96 63 281Debt securities held at AC 8 050 -252 17
Currency and 0 0 0 0 0 Loans and advances at AC 569 33 -45
interest rate swaps
Debt securities held at FVOCI 7 254 64 80
Debt securities issued at AC 21 802 -226 -334
Deposits at AC 102 -11 13
Total 37 727 37 727 96 63 281 Total -269 11 -
Portfolio hedge of interest rate risk
Interest rate swaps 141 341 141 341 67 95 -464 Debt securities held at AC 831 -31 -23
Currency and 1 214 0 48 0 -3 Loans and advances at AC 121 621 -1 988 622
interest rate options
Debt securities held at FVOCI 76 0 -3
Debt securities issued at AC 0 0 0
Deposits at AC 17 471 -379 -121
Insurance contract liabilities, Life 161 6 -6
Total 142 555 141 341 115 95 -467Total 469 2 -
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 17 376 17 376 5 120 22
Currency and 1 830 1 790 19 17 -30
interest rate swaps
Total 19 206 19 166 24 137 -8 Total 8 0 -486
Hedge of net investments in foreign operations
Total3 2 826 2 806 35 518 54 Total -54 0 147
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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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31-12-2023
(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
Notional amounts1Carrying valuethe period2Typefor the period2profit or loss OCI
Of which
Total (including accumulated
fair value fair value
Hedging strategy Purchased Sold Assets Liabilities changes) adjustments
Fair value micro hedge
Interest rate swaps 31 864 31 864 97 112 267 Debt securities held at AC 6 547 -300 377
Currency and 0 0 0 0 0 Loans and advances at AC 601 75 3
interest rate swaps
Debt securities held at FVOCI 2 999 -25 124
Debt securities issued at AC 21 285 -560 -774
Deposits at AC 0 0 0
Total 31 86431 864 97 112 267 Total -269 -2 \u2013
Portfolio hedge of interest rate risk
Interest rate swaps 143 932 143 932 93 123 -995 Debt securities held at AC 937 -7 115
Currency and 1 618 0 70 0 -27 Loans and advances at AC 125 541 -2 473 1 841
interest rate options
Debt securities held at FVOCI 85 3 9
Debt securities issued at AC 0 0 0
Deposits at AC 15 938 -507 -936
Total 145 550 143 932 163 123 -1 022 Total 1 029 7 \u2013
Cashflow hedge (micro hedge and portfolio hedge)
Interest rate swaps 19 603 19 603 15 127 401
Currency and 1 181 1 205 1 22 -14
interest rate swaps
Total 20 784 20 808 17 149 387 Total -395 -9 -611
Hedge of net investments in foreign operations
Total32 579 2 570 19 460 77 Total -77 0 92
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
\n
negative impact, the maturities of assets and liabilities are adjusted on the balance sheet using interest rate swaps and other
\n
derivatives.
\n
\u2022 As regards the relationship between risk management and hedge accounting policy, \u2018economic\u2019 management takes priority
\n
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.
\n
\u2022 The balances remaining in the cashflow hedge reserve from any hedging relationships for which hedge accounting is no longer
\n
applied came to -187 million euros in 2024 (-322 million euros in 2023). The accumulated amount of fair value hedge
\n
adjustments remaining on the balance sheet for any hedged items that have ceased to be adjusted for hedging gains and
\n
losses amounted to -99 million euros in 2024 (-82 million euros in 2023). These adjustments are amortised to profit or loss.
\n
\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
\n
accumulated fair value adjustments regarding discontinued fair value hedges not included in Note 4.8.2 but included in the
\n
balance sheet.
\n
\u2022 The accumulated fair value adjustments of the hedged assets involved in portfolio hedges of interest rate risk were less
\n
negative in 2024 due to the decrease in the risk-free rate and the unwinding effect of the negative accumulated fair value
\n
adjustment. The \u2018Profit/loss on positions in portfolios hedged against interest rate risk\u2019 balance sheet item on the liabilities
\n
side of the balance sheet was also less negative for the same reasons.
\n
\u2022 Also see the paragraph on hedge accounting in the \u2018How do we manage our risks?\u2019 section and Note 3.3.
\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
Estimated cashflows from cashflow hedging derivatives per time bucket (in millions of EUR) Inflow Outflow
Not more than three months 21 -38
More than three but not more than six months 46 -54
More than six months but not more than one year 103 -177
More than one but not more than two years 183 -325
More than two but not more than five years 533 -770
More than five years 1 321 -1 572
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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", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag191": { "value": "\n

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Note 4.3: Maximum credit exposure and offsetting
\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
Collateral and other
Maximum credit credit enhancements
(in millions of EUR) exposure (A) received (B) Net (A-B)
31-12-2024
Subject to impairment 349 640 139 298 210 342
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 1 981 1 467 514
Debt securities 72 615 32 72 583
Loans and advances (excl. reverse repos) 193 562 106 128 87 434
Reverse repos 21 083 21 054 29
Other financial assets 1 154 0 1 154
Off-balance-sheet liabilities 61 226 12 085 49 142
Irrevocable 41 578 7 006 34 572
Revocable 19 648 5 078 14 570
Not subject to impairment 10 890 4 871 6 019
Debt securities 5 090 0 5 090
Loans and advances (excl. reverse repos) 943 840 103
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos 0 0 0
Derivatives 4 856 4 031 825
Other financial assets 0 0 0
Off-balance-sheet liabilities 0 0 0
Total 360 530 144 169 216 361
31-12-2023
Subject to impairment 341 106 141 604 199 502
of which Stage 3 \u2018non-performing\u2019 (AC and FVOCI) 2 261 1 721 540
Debt securities 68 265 56 68 209
Loans and advances (excl. reverse repos) 185 556 103 556 82 000
Reverse repos 25 501 25 476 24
Other financial assets 1 196 0 1 196
Off-balance-sheet liabilities 60 589 12 515 48 073
Irrevocable 40 149 7 179 32 970
Revocable 20 440 5 337 15 103
Not subject to impairment 8 902 2 400 6 502
Debt securities 3 152 0 3 152
Loans and advances (excl. reverse repos) 836 796 40
of which designated upon initial recognition at fair value through profit or loss (FVO) 0 0 0
Reverse repos000
Derivatives 4 914 1 604 3 310
Other financial assets000
Off-balance-sheet liabilities000
Total 350 009 144 004 206 004
\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 2024.
\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 specified in that section.
\n\n
\u2022 Collateral and credit enhancements received are recognised at market value and limited to the outstanding amount of the
\n
relevant loans.
\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
(in millions of EUR) 31-12-202431-12-2023
Nominal ProvisionNet exposureNominal ProvisionNet exposure
amount amount
Undrawn portion of credit lines granted
Stage 1 45 481 18 45 463 41 551 20 41 531
Stage 2 3 314 9 3 305 6 683 14 6 670
Stage 3 52 2 50 79 5 73
Total 48 848 30 48 818 48 313 39 48 274
of which irrevocable credit lines 29 180 10 29 170 27 856 23 27 833
Financial guarantees given
Stage 1 10 245 3 10 242 7 860 2 7 859
Stage 2 992 5 987 2 952 6 2 947
Stage 3 113 32 80 133 44 90
Total 11 350 41 11 309 10 946 51 10 895
Other commitments given
Total 1 101 2 1 099 1 421 1 1 420
Off-balance-sheet commitments and financial
guarantees
Total 61 299 73 61 226 60 680 91 60 589
\n\n\n\n
\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 40 924 million euros for liabilities and
\n
1 667 million euros for contingent liabilities (36 842 million euros and 4 489 million euros in 2023). At year-end 2024, some
\n
21.8 billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the
\n
special estate of the covered bond programme (18.9 billion euros at year-end 2023).
\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 2024 (3 million euros in 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
Collateral received (which may be sold or repledged Fair value of collateral sold or
in the absence of default by the owner) (in millions of EUR) Fair value of collateral received repledged
31-12-202431-12-202331-12-202431-12-2023
Financial assets 32 091 42 215 12 279 5 267
Equity instruments 30 21 2 2
Debt securities 31 809 41 959 12 277 5 265
Loans and advances 252 235 0 0
Cash 0 0 0 0
Other 0 0 0 0
\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: i) the amount of cash collateral is recognised as a financial asset and
\n
ii) 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 its 2023 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 amount of 90 million euros is deducted in the calculation of the common equity capital.
\n

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\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag192": { "value": "\n
\u2022 Collateral and credit enhancements received are recognised at market value and limited to the outstanding amount of the
\n
relevant 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
\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\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:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag225": { "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 hierarchy 31-12-202431-12-2023
(in millions of EUR) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
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 0 0 0 0 0
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 943 943 0 0 836 836
Equity instruments 0 0 10 10 0 0 14 14
Investment contracts (insurance) 16 527 75 0 16 602 14 241 107 0 14 348
Debt securities 13 0 57 70 13 0 1 14
of which sovereign bonds 0 0 0 0 0 0 0 0
Held for trading
Loans and advances to credit institutions and investment firms (incl. 0 1 0 1 0 1 0 1
reverse repos)
Loans and advances to customers (incl. reverse repos) 0 0 0 0 0 0 0 0
Equity instruments 902 0 0 902 567 0 2 570
Debt securities 2 451 2 570 0 5 021 2 420 717 1 3 138
of which sovereign bonds 2 397 963 0 3 360 2 364 602 0 2 966
Derivatives 1 3 527 1 057 4 584 3 3 908 708 4 618
At fair value through OCI
Equity instruments 1 219 1 501 1 722 1 212 1 483 1 695
Debt securities 20 190 2 199 150 22 539 14 079 2 628 186 16 892
of which sovereign bonds 16 892 1 273 0 18 165 11 679 1 501 26 13 206
Hedging derivatives
Derivatives 0 271 0 271 0 295 0 295
Total
Total financial assets at fair value 41 303 8 644 2 717 52 665 32 534 7 656 2 231 42 422
FINANCIAL LIABILITIES AT FAIR VALUE
Held for trading
Deposits from credit institutions and investment firms (incl. repos) 0 94 0 94 0 40 0 40
Deposits from customers and debt securities (incl. repos) 0 22 0 22 0 81 0 81
Derivatives 1 3 271 1 406 4 679 2 4 460 1 039 5 501
Short positions 882 0 0 882 1 428 0 0 1 428
Designated upon initial recognition at fair value through profit or loss (FVO)
Deposits from credit institutions and investment firms (incl. repos) 0 0 0 0 0 0 0 0
Deposits from customers and debt securities (incl. repos) 0 186 850 1 035 0 202 1 157 1 359
Liabilities under investment contracts 15 644 0 0 15 644 13 432 0 0 13 432
Hedging derivatives
Derivatives 0 265 51 316 0 306 95 401
Total
Total financial liabilities at fair value 16 527 3 838 2 307 22 673 14 862 5 090 2 290 22 242
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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.
\n
- 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
\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.
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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 type ProductsValuation technique
Liquid financial instruments FX spots, exchange traded financial futures, exchange traded options, Mark-to-market (quoted prices in active
Level 1 for which quoted prices are exchange traded stocks, exchange traded funds, liquid government markets), for bonds: BVAL or vendor data
regularly available bonds, 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
derivatives rate 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, FX swaps and
index swaps (OIS), FX resets (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 transactions Discounted cashflow analysis based on
(without optional features) \u2013 discount and estimation curves (derived
cash instruments from quoted deposit rates, FX swaps and
Level 2 (CC)IRS)
Semi-liquid bonds/asset Semi-liquid bonds/asset backed securities BVAL, prices corroborated by alternative
backed securities observable market data, or using
comparable spread method
Debt instruments KBC IFIMA own issues (liabilities) Discounted cashflow analysis and
valuation of related derivatives based on
observable inputs
Linear financial assets (cash Loans, commercial paper Discounted cashflow analysis based on
instruments) discount and estimation curves (derived
from quoted deposit rates, FX swaps and
(CC)IRS)
Exotic derivatives Target 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
instruments probability of default of underlying assets
Private equity investments Private equity and non-quoted participations Based 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
securities priced by a single pricing provider in an inactive market manager), where prices cannot be
corroborated due to a lack of
available/reliable alternative market data
Debt instruments KBC own issues (KBC IFIMA ), mortgage bonds held by \u010cSOB Discounted cashflow analysis and
valuation of related derivatives based on
unobservable inputs (indicative pricing by
third parties for derivatives)
Structured loans Government-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 2024, KBC transferred 201 million euros\u2019 worth of financial assets and liabilities out of level 1 and into level 2, and 445 million
\n
euros\u2019 worth of financial assets and liabilities out of level 2 and into level 1 (176 million euros and 286 million euros, respectively,
\n
in 2023). Most of these reclassifications were carried out due to a change in the liquidity of government bonds and corporate
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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 2024, 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 (not held for trading): the fair value of loans and advances
\n
increased by 107 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
\n
instruments that had reached maturity. The fair value of debt instruments rose by 55 million euros, due primarily to new
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purchases.
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- Financial assets at fair value through OCI: the fair value of debt instruments decreased by 36 million euros, primarily on
\n
account of shifts from level 3, partly offset by new purchases. The fair value of the equity instruments rose by 19 million
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euros, due mainly to new purchases, partly offset by the sale of existing positions.
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- Financial assets held for trading: the fair value of derivatives increased by 349 million euros, due mainly to changes in
\n
market inputs and new purchases, partly offset by the sale of existing positions.
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- Financial liabilities held for trading: the fair value of derivatives rose by 367 million euros, mainly on account of changes in
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market inputs and new transactions, partly offset by the settlement of existing positions.
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- Financial liabilities measured at fair value through profit or loss: the fair value of issued debt instruments decreased by
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307 million euros, primarily on account of transactions that had reached maturity and the sale of existing positions, partly
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offset by new transactions and changes in market inputs.
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- Financial liabilities relating to hedging derivatives: the fair value of derivatives decreased by 43 million euros due to
\n
changes in market inputs.
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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
\n
following:
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- Financial assets measured at fair value through profit or loss (not held for trading): the fair value of loans and advances
\n
increased by 210 million euros, primarily on account of new transactions and changes in market inputs, partly offset by
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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 the sale of
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existing 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 the sale of
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existing 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 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
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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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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", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag313": { "value": "\n

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Note 5.1: Other assets
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(in millions of EUR) 31-12-202431-12-2023
Total 1 911 1 691
Prepaid charges and accrued income 592627
Other 1 320 1 064
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\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag314": { "value": "\n

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Note 5.1: Other assets
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(in millions of EUR) 31-12-202431-12-2023
Total 1 911 1 691
Prepaid charges and accrued income 592627
Other 1 320 1 064
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\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag815": { "value": "\n

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Note 5.1: Other assets
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(in millions of EUR) 31-12-202431-12-2023
Total 1 911 1 691
Prepaid charges and accrued income 592627
Other 1 320 1 064
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\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag816": { "value": "\n
Note 5.1: Other assets
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(in millions of EUR) 31-12-202431-12-2023
Total 1 911 1 691
Prepaid charges and accrued income 592627
Other 1 320 1 064
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\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag315": { "value": "\n

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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
(in millions of EUR) 31-12-202431-12-2023
CURRENT TAXES
Current tax assets 59 176
Current tax liabilities 121 99
DEFERRED TAXES 593 351
Deferred tax assets by type of temporary difference 1 382 1 134
Employee benefits 80 85
Losses carried forward 366 103
Tangible and intangible fixed assets 98 80
Provisions for risks and charges 18 19
Impairment for losses on loans and advances 212 207
Financial instruments at fair value through profit or loss and fair value hedges 86 92
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 426 445
Insurance contract liabilities 33 36
Other, incl. reinsurance contracts 64 68
Deferred tax liabilities by type of temporary difference 789 784
Employee benefits 113 95
Losses carried forward 0 0
Tangible and intangible fixed assets 57 43
Provisions for risks and charges 9 9
Impairment for losses on loans and advances 3 3
Financial instruments at fair value through profit or loss and fair value hedges 85 76
Fair value changes, financial instruments at FVOCI, cashflow hedges and hedges of net investments in foreign operations 21 41
Insurance contract liabilities 452 467
Other, incl. reinsurance contracts 50 50
Recognised as a net amount in the balance sheet as follows:
Deferred tax assets 942 724
Deferred tax liabilities 349 373
Unused tax losses and unused tax credits 95 117
\n\n\n\n
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\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 (+242 million euros in 2024) breaks down as follows:
\n
- The change in deferred tax assets of +248 million euros was primarily due to:
\n
- an increase in deferred tax assets via the income statement (+235 million euros), due mainly to losses carried forward
\n
(+263 million euros). This increase includes the recognition of a deferred tax asset for KBC Bank NV of 318 million euros
\n
relating to the imminent liquidation of Exicon (formerly KBC Bank Ireland) in the fourth quarter of 2024, partly offset by
\n
using deferred tax assets previously created due to taxable profits;
\n
- a decrease in deferred tax assets on account of changes in the revaluation reserve for financial instruments measured
\n
at fair value through OCI, cashflow hedges and hedges of net investments in foreign operations (-19 million euros).
\n
- The change in deferred tax liabilities of +6 million euros was accounted for chiefly by:
\n
- an increase in deferred tax liabilities for employee benefit liabilities mainly recorded through OCI (+17 million euros),
\n
tangible and intangible fixed assets (+14 million euros) and reinforced by financial instruments at fair value through
\n
profit or loss and fair value hedges (+9 million euros);
\n
- a decrease in deferred tax liabilities 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 (-19 million
\n
euros);
\n
- a decrease in deferred tax liabilities for insurance contract liabilities (-15 million euros), with an amount of +64 million
\n
euros being recorded through OCI and -49 million euros being recorded via the income statement.
\n
\u2022 The deferred tax assets presented in the balance sheet are attributable primarily to KBC Bank and \u010cSOB in the Czech
\n
Republic.
\n
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag327": { "value": "\n

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\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
(in millions of EUR) 31-12-202431-12-2023
Property and equipment 3 396 3 216
Investment property 585 485
Rental income 55 53
Direct operating expenses from investments generating rental income 16 15
Direct operating expenses from investments not generating rental income 1 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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 IT Other Total property
MOVEMENTS TABLE buildings equipment equipment and equipment Investment property
2024
Opening balance 1 306 122 1 789 3 216 485
Acquisitions 109 83 803 995 149
Disposals -44 -2 -271 -317 -13
Depreciation -102-62 -30 -194 -33
Other movements 3 -6 -300 -304 -2
Closing balance 1 271 135 1 990 3 396 585
Accumulated depreciation and impairment1 609 484 882 2 975 324
Fair value 839
2023
Opening balance 1 373 130 1 486 2 989 571
Acquisitions 106 53 830 988 34
Disposals -240-242-266-82
Depreciation-119-62-25-206-31
Other movements -30 1 -260 -289 -7
Closing balance 1 306 122 1 789 3 216 485
Accumulated depreciation and impairment 1 585 479 915 2 979 308
Fair value 733
\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
\u2022 There was a small amount (around 0.2 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
basis, based primarily on the capitalisation of the estimated rental value and on unit prices of similar real property. Account
\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 2024 and 2023 on property and equipment and
\n
regarding climate-related and other ESG risks, see the \u2018Sustainability statement\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
(commuting). We nevertheless also calculate our own direct greenhouse gas impact and apply certain targets in that regard.
\n
can also be found in our Climate Report and our Sustainability Report at www.kbc.com.
\n
income statement.
\n
\u2022 Most investment property is valued by an independent expert on a regular basis and by in-house specialists on an annual
\n
is taken of all the market inputs available on the date of the assessment (including location and market situation, type of
\n
investment property (in this case, our branch network) and on the associated impairment was insignificant. For information
\n
companies and our indirect impact through lending and other activities, and stems mainly from our buildings and vehicles
\n
See \u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation. More details
\n
\u2022 \u2018Other equipment\u2019 mostly comprises full service vehicle leases (mainly cars and bicycles) under operating leases. The other
\n
movements in \u2018Other equipment\u2019 mainly concern depreciation of these assets, recognised under \u2018Net other income\u2019 in 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", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag332": { "value": "\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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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

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Note 6.6: Main changes in the scope of consolidation
\n
\n
\n
\u2022 Sale of activities in Ireland (2022, 2023 and 2024)
\n
- At the end of August 2021, KBC Bank Ireland reached agreement on the disposal of a non-performing mortgage loan
\n
portfolio of roughly 1.1 billion euros in a transaction that was financed by funds that were managed by CarVal Investors.
\n
The deal was finalised in early February 2022. The loans will be managed by Pepper Finance Corporation (Ireland) DAC as
\n
the legal title holder of the 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, included
\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. The transaction had an impact on the income statement of +365 million euros in 2023 (of which
\n
+408 million euros in \u2018Net other income\u2019). Once finalised, the transaction also positively impacted the common equity ratio
\n
by approximately 0.9 percentage points in the first quarter of 2023 (partly due to a reduction in risk-weighted assets).
\n
- On 1 December 2023, KBC Bank Ireland transferred the vast majority of the remaining assets and liabilities to KBC Bank
\n
Dublin branch. On 30 April 2024, KBC Bank Ireland (currently Exicon DAC) returned its banking licence to the Central Bank
\n
of Ireland.
\n
- See also Note 3.11.
\n
\u2022 There were no other material changes in 2024.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag337": { "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
Software Software
developed developed
(in millions of EUR) Goodwill in-house externallyOtherTotal
2024
Opening balance 1 240829 266 20 2 355
Acquisitions 0 311 69 7 387
Disposals 0 0 -7 -6 -14
Amortisation - -124 -63 -2 -188
Other movements -18 -44 2 -4 -65
Closing balance 1 221 972 266 15 2 475
Accumulated amortisation and impairment 369 1 006 886 24 2 286
2023
Opening balance 1 346 719 250 16 2 331
Acquisitions 02718711370
Disposals 000-2-2
Amortisation--113-64-2-179
Other movements -106-48-7-3-164
Closing balance 1 240 829 266 20 2 355
Accumulated amortisation and impairment 369 806 909 31 2 115
\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 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. This is because 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
Discount rates throughout the specific period
Goodwill outstandingof cashflow projections
(in millions of EUR) 31-12-2024 31-12-202331-12-202431-12-2023
K&H Bank 16918114.7% \u2013 13.5% 15.2% \u2013 13.7%
\u010cSOB (Czech Republic) 24825212.7% \u2013 12.6% 13.0% \u2013 12.8%
\u010cSOB Stavebn\u00ed sporitelna656612.7% \u2013 12.6%13.0% \u2013 12.8%
United Bulgarian Bank 54654612.4% \u2013 12.3% 13.3% \u2013 12.5%
DZI Insurance 757510.1%11.2% \u2013 10.4%
KBC Commercial Finance 212111.6% \u2013 12.2% 12.0%
Pension Insurance Company UBB 56567.3% \u2013 7.8% 8.3% \u2013 8.4%
Rest 4242\u2013\u2013
Total 1 221 1 240 \u2013\u2013
\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 2024 (between
\n
3.2% and 4.7% in 2023).
\n
\u2022 For all entities, at year-end 2024 the recoverable amount exceeded the carrying value to such a large extent that no
\n
reasonably possible change in the key assumptions would result in the recoverable amount being less than or equal to the
\n
carrying 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", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag830": { "value": "\n

\n\n

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Note 5.6.2: Movements in Life insurance contract liabilities
\n
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(in millions of EUR) Liabilities for remaining coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured PAA
under PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 13 667 7 134 50 3 13 862
Insurance service result -435 24 225 19 0 -168
Insurance revenues -463 \u2014 \u2014 \u2014 \u2014 -463
BBA + VFA by transition method -432 \u2014 \u2014 \u2014 \u2014 -432
Modified retrospective approach -9 \u2014 \u2014 \u2014 \u2014 -9
Fair value approach -280 \u2014 \u2014 \u2014 \u2014 -280
Other -143 \u2014 \u2014 \u2014 \u2014 -143
PAA -31 \u2014 \u2014 \u2014 \u2014 -31
Insurance service expenses 28 24 225 19 0 296
Incurred claims (excl. repayments of investment components) \u2014 -2 156 14 1 169
Incurred costs other than claims 0 -2 99 3 0 100
Amortised acquisition expenses 28 \u2014 \u2014 \u2014 \u2014 28
Changes in fulfilment cashflows that relate to future service \u2013 loss on \u2014 28 \u2014 \u2014 \u2014 28
and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 -29 1 -1 -29
Investment components -2 591 \u2014 2 591 \u2014 \u2014 0
Investment result 6 0 \u2014 \u2014 \u2014 6
Net result from financial instruments at fair value through profit or loss 6 0 \u2014 \u2014 \u2014 6
Insurance finance income and expense 490 1 2 2 0 495
In P&L 292 1 2 1 0 296
In OCI 198 0 0 1 0 199
Total changes in comprehensive income -2 529 25 2 818 20 0 334
Total cashflows 2 585 \u2014 -2 798 -19 \u2014 -232
Premiums received2 712 \u2014 \u2014 \u2014 \u2014 2 712
Claims paid \u2014 \u2014 -2 699 -16 \u2014 -2 715
Costs other than claims paid \u2014 \u2014 -99 -3 \u2014 -102
Acquisition costs paid -127 \u2014 \u2014 \u2014 \u2014 -127
Other -37 0 -2 0 0 -39
Closing balance 13 686 32 152 52 4 13 925
2023
Opening balance13 258 1012647313 444
Insurance service result -381 -2 218 16 1 -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 expenses 19-2218161251
Incurred claims (excl. repayments of investment components)\u2013-1156131169
Incurred costs other than claims0-7922\u201387
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 \u2013 1 284 \u2013 \u2013 0
Investment result 0 0 \u2014 \u2014 \u2014 0
Net result from financial instruments at fair value through profit or loss 0 0\u2014\u2014\u2014 0
Insurance finance income and expense 815 0 3 3 0 821
In P&L2810100283
In OCI5340230538
Total changes in comprehensive income-850-21 505191672
Total cashflows 1 271 \u2013 -1 497 -16 \u2013 -242
Premiums received1 401 \u2013 \u2013 \u2013 \u2013 1 401
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 balance 13 667 7 134 50 3 13 862
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\u2022 In the transition from IFRS 4 to IFRS 17 on 1 January 2022, KBC applied the Full Retrospective Approach (FRA) for recent years.
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Applying the FRA for non-recent years was impracticable due to either a lack of historical data (data and hypotheses) or high
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costs associated with making information from the past available for FRA transition calculations. Where the FRA was
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impracticable, the Fair Value Approach (FVA) was predominantly used to determine the CSM on the transition date. The
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Modified Retrospective Approach (MRA) was rarely applied as this transition approach was overly complex and the costs did
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not outweigh the benefits. KBC calculated a fair value according to IFRS 13 based on the IFRS 17 cashflows and subsequently
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adjusted a few assumptions or parameters. The adjustments related to the inclusion in the IFRS 13 fair value of total expenses,
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i.e. including non-directly attributable expenses, and to the inclusion of a risk premium that covers not only non-financial risk,
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but also system and integration expenses and capital funding costs. All past years were combined into a single cohort for the
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FVA transition calculations. The FVA CSM ensued from cost and risk margin differences under IFRS 17 and IFRS 13 measurement
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approaches. Due to the application of the FVA on the transition date in accordance with the transition exemptions provided
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in IFRS 17, the OCI amount was set at nil.
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\u2022 Movement in insurance liabilities in 2024:
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- Due to the further decrease in market interest rates during 2024, an expense in OCI of 199 million euros before tax is
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recognised as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance
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income and expense between P&L and OCI.
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- The movement in the investment component of 2 591 million euros from LRC to LIC indicates the amounts of contracts
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coming at maturity or lapsed and includes 866 million euros resulting from the surrender in 2024 of individual pension
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agreements from the \u2018Risk and Savings\u2019 portfolio in order to migrate them to the \u2018Hybrid products\u2019 portfolio as the
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policyholders of the relevant contracts were given the opportunity to invest in unit-linked products.
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\u2022 Movement in insurance liabilities in 2023:
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- Due to the decrease in market interest rates during 2023, an expense in OCI of 538 million euros before tax is recognised
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as KBC made the accounting policy choice for all portfolios within the group to disaggregate insurance finance income
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and 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
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coming 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, and 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 coverage Liabilities for incurred claims Total
Excl. loss Contracts not Contracts measured under
component Loss component measured under
PAA
PAA
Present value Risk
of future adjustment
cashflows
2024
Opening balance 700 1 16 1 964 240 2 922
Insurance service result -1 952 3 31 1 606 10 -303
Insurance revenues -2 482 \u2014 \u2014 \u2014 \u2014 -2 482
BBA by transition method -39 \u2014 \u2014 \u2014 \u2014 -39
Modified retrospective approach 0 \u2014 \u2014 \u2014 \u2014 0
Fair value approach -29 \u2014 \u2014 \u2014 \u2014 -29
Other -11 \u2014 \u2014 \u2014 \u2014 -11
PAA -2 443 \u2014 \u2014 \u2014 \u2014 -2 443
Insurance service expenses 530 3 31 1 606 10 2 179
Incurred claims (excl. repayments of investment components) \u2014 -1 28 1 251 65 1 343
Incurred costs other than claims 0 0 3 232 0 236
Amortised acquisition expenses 529 \u2014 \u2014 \u2014 \u2014 529
Changes in fulfilment cashflows that relate to future service \u2013 loss \u2014 4 \u2014 \u2014 \u2014 4
on and reversal of loss on onerous contracts
Changes in fulfilment cashflows that relate to past service \u2014 \u2014 0 122 -55 66
Investment components 0 \u2014 0 \u2014 \u2014 0
Insurance finance income and expense 7 0 0 58 7 72
In P&L 1 0 0 39 5 45
In OCI 6 0 0 18 2 26
Total changes in comprehensive income -1 945 3 31 1 664 17 -231
Total cashflows 1 991 \u2014 -29 -1 453 \u2014 509
Premiums received2 532 \u2014 \u2014 \u2014 \u2014 2 532
Claims paid \u2014 \u2014 -26 -1 222 \u2014 -1 248
Costs other than claims paid \u2014 \u2014 -3 -231 \u2014 -234
Acquisition costs paid -540 \u2014 \u2014 \u2014 \u2014 -540
Other -6 0 0 -6 -1 -14
Closing balance 740 4 182 168 256 3 186
2023
Opening balance6751141 8022222 714
Insurance service result -1 789 0 28 1 343 7 -410
Insurance revenues-2 280\u2013\u2013\u2013\u2013-2 280
BBA by transition method-36\u2013\u2013\u2013\u2013-36
Modified retrospective approach 0\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 expenses 491 0 28 1 343 7 1 869
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 components 0 \u2013 0 \u2013 \u2013 0
Insurance finance income and expense -48 0 1 89 12 54
In P&L00027430
In OCI-480063824
Total changes in comprehensive income -1 837 0 29 1 433 19 -356
Total cashflows 1 862 \u2013 -27 -1 288 \u2013 547
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
Other 10017018
Closing balance 700 1 16 1 964 240 2 922
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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
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costs) and claim numbers based on the observed claim development of earlier years and expected loss ratio. Historical claims
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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
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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
of future Risk Total insurance
cashflows adjustment contract
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin liabilities
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
2024
Opening balance 11 538 152 47 1 387 683 13 807
Insurance service result -212 41 -2 -125 138 -159
Changes that relate to future service -201 53 4 -11 182 28
New business -245 29\u2013\u2013 230 14
Changes in estimates reflected in the CSM 32 23 4-11-48 0
Changes in estimates that result in onerous contract 13 1\u2013\u2013\u2013 14
losses and reversals
Changes that relate to current service 16 -9 -5 -114 -44 -157
CSM recognised in P&L 0--5-114-44-163
Changes in the risk adjustment (expected) 0-9\u2013\u2013\u2013-9
Experience adjustments 16-\u2013\u2013\u2013 16
Changes to liabilities for incurred claims related to past -27 -3 \u2013 \u2013 \u2013 -29
service
Investment result 6 - \u2013 \u2013 \u2013 6
Net result from financial instruments at fair value through P&L 6-\u2013\u2013\u2013 6
Insurance finance income and expense 466 4 1 10 13 493
In P&L 269 3 1 10 13 295
In OCI 197 1--- 198
Total changes in comprehensive income 260 44 -1 -115 151 341
Total cashflows -241\u2013 \u2013 \u2013 \u2013 -241
Premiums received 2 681\u2013\u2013\u2013\u20132 681
Claims paid -2 699\u2013\u2013\u2013\u2013-2 699
Costs other than claims paid -99\u2013\u2013\u2013\u2013-99
Acquisition costs paid -124\u2013\u2013\u2013\u2013-124
Other changes -28 -1 -3 -4 -3 -39
Closing balance 11 529 195 43 1 268 832 13 868
2023
Opening balance11 378112451 37748013 393
Insurance service result -390 47 -1 8 198 -139
Changes that relate to future service -399 56 4 120 224 5
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
Investment result 0 \u2013 \u2013 \u2013 \u2013 0
Net result from financial instruments at fair value through P&L0\u2013\u2013\u2013\u20130
Insurance finance income and expense 809 -7 1 9 7 818
In P&L2642197283
In OCI544-9\u2013\u2013\u2013535
Total changes in comprehensive income 418 40 0 16 205 679
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 -1 2 -6 -1 -14
Closing balance 11 538 152 47 1 387 683 13 807
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\u2022 The amount recognised in P&L as release of the CSM is determined by:
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- Identifying the coverage units in the group. The number of coverage units in a group is the quantity of service provided by
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the insurer under the contracts in that Group of Contracts (GoC), determined by considering for each contract the quantity
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of the benefits provided to the policyholder under a contract and its expected coverage period.
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- Allocating the CSM at the end of the period equally to each coverage unit provided in the current period and expected
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to be provided in the future, and recognising in P&L the amount allocated to coverage units allocated to the current
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period.
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\u2022 Main movements in 2024 and 2023: the 43-million-euro increase in the risk adjustment in 2024 is mostly related to a model
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change to take into account the risk that clients stop paying premiums for long-term life insurance contracts. The movement
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of the contractual service margin in 2024, under \u2018New business\u2019, includes a 96-million-euro increase related to the migration
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of individual pension agreements from the \u2018Risk and Savings\u2019 portfolio to the \u2018Hybrid products\u2019 portfolio (see also Note 5.6.2).
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There were no material changes in 2023.
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Note 5.6.5: Movements in Non-life insurance contract liability components (BBA)
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Present value
of future Risk
cashflows adjustment Total insurance
(in millions of EUR) (incl. LIC) (incl. LIC) Contractual service margin contract liabilities
Insurance contracts that
existed at the transition Other insurance
date, fair value approach contracts
2024
Opening balance 8 71 52 74 206
Insurance service result -72 60 -21 26 -7
Changes that relate to future service -74 62 -19 31 0
New business -21 3 \u2014 18 0
Changes in estimates reflected in the CSM -52 58 -19 13 0
Changes in estimates that result in onerous contract 0 0 \u2014 \u2014 0
losses and reversals
Changes that relate to current service 1 -1 -2 -5 -7
CSM recognised in P&L \u2014 \u2014 -2 -5 -7
Changes in the risk adjustment (expected) \u2014 -1 \u2014 \u2014 -1
Experience adjustments 1 \u2014 \u2014 \u2014 1
Changes to liabilities for incurred claims related to past 0 0 \u2014 \u2014 0
service
Insurance finance income and expense 15 -9 0 1 7
In P&L -1 1 0 1 1
In OCI 16 -10 \u2014 \u2014 6
Total changes in comprehensive income -57 51 -21 27 -1
Total cashflows 9 \u2014 \u2014 \u2014 9
Premiums received 46 \u2014 \u2014 \u2014 46
Claims paid -26 \u2014 \u2014 \u2014 -26
Costs other than claims paid -3 \u2014 \u2014 \u2014 -3
Acquisition costs paid -8 \u2014 \u2014 \u2014 -8
Other changes 0 0 0 0 0
Closing balance -40 122 31 101 214
2023
Opening balance17759367252
Insurance service result 11 16 -41 7 -7
Changes that relate to future service 9 19 -38 10 0
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 service 2 -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 -19 0 1 -48
In P&L00010
In OCI-28-19\u2013\u2013-48
Total changes in comprehensive income -17 -4 -41 7 -54
Total cashflows 8 \u2013 \u2013 \u2013 8
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 changes 0 0 0 0 0
Closing balance 8 71 52 74 206
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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 6-million-euro increase in 2024 is attributable to
\n

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a slight decline in the yield curve. A typical feature of the hospitalisation portfolio is that interest rate movements have a
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greater impact on the cash outflows than on the cash inflows. Hospitalisation premiums are levelled (constant \u2018cash in\u2019 during
\n
the lifetime of the contract) and claims increase as the insured person ages (\u2018cash out\u2019 more towards the end of the contract).
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\u2022 The 52-million-euro drop in the present value of future cashflows for changes in estimates reflected in the CSM in 2024 is due
\n
to a model update in which expected higher claims result in higher premiums. A higher premium volume generates more future
\n
profit and, as a result, lower fulfilment cashflows. The 58-million-euro increase in changes in estimates reflected in the CSM in
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the risk adjustment in 2024 was accounted for by a model change involving a more conservative estimate of the uncertainty
\n
of claim costs related to hospitalisation.
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\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag873": { "value": "\n

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Note 5.7: Provisions for risks and charges
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Note 5.7.1: Overview
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(in millions of EUR) 31-12-202431-12-2023
Total provisions for risks and charges 141 183
Provisions for off-balance-sheet commitments and financial guarantees 73 91
Provisions for other risks and charges 69 92
Provisions for restructuring 22 37
Provisions for taxes and pending legal disputes 31 37
Other 17 18
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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
Subject to
Subject to 12-Subject to lifetime ECL \u2013
(in millions of EUR) month ECLlifetime ECL non-performingTotal
31-12-2024
Provisions on 1 January 22 20 49 91
Movements with an impact on results
Transfer of financial assets
Stage 1 (12-month ECL) -1 5 2 6
Stage 2 (lifetime ECL) 1 -9 3 -5
Stage 3 \u2018non-performing\u2019 (lifetime ECL) 0 1 -5 -4
New financial assets 5 1 1 8
Changes in risk parameters during the reporting period -6 -1 -13 -21
Changes in the model or methodology 2 0 -1 1
Derecognised financial assets -3 -1 -2 -6
Other 0 0 0 0
Movements without an impact on results
Derecognised financial assets 0 0 0 0
Changes in the scope of consolidation 0 -1 0 -1
Other 2 0 1 3
Provisions on 31 December 22 15 36 73
31-12-2023
Provisions on 1 January 19 35 60 114
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
\n\n\n\n\n
\n
\n
\u2022 Also see Note 6.1.
\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
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
Provisions for Provisions for taxes and
(in millions of EUR) restructuringpending legal disputes Other Total
2024
Opening balance 37 37 18 92
Movements with an impact on results
Amounts allocated 3 2 4 9
Amounts used -20 -5 -3 -27
Unused amounts reversed 0 -1 -2 -4
Transfers out of/into liabilities associated 0 0 0 0
with disposal groups
Changes in the scope of consolidation 0 0 0 0
Other 2 -2 -1 -1
Closing balance 22 31 17 69
2023
Opening balance 92 192 20 305
Movements with an impact on results
Amounts allocated 11 10 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 1 0 1
Closing balance 37 37 18 92
\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 Other provisions include 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
- 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
(Court of Appeals for the Second Circuit) 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
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. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the
\n
amended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden
\n
of proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may
\n
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\n\n\n\n\n\n\n\n

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

\n\n\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
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 31-12-202431-12-2023
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period 2 724 2 580
Current service cost 105 95
Interest cost 89 104
Actuarial gain or loss resulting from changes in demographic assumptions 0 -3
Actuarial gain or loss resulting from changes in financial assumptions -76 152
Experience adjustments 29 -56
Past-service cost 0 0
Benefits paid -190 -149
Other 3 0
Defined benefit obligations at the end of the period 2 684 2 724
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period 2 936 2 746
Actual return on plan assets 198 222
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 96 115
Employer contributions 97 93
Plan participant contributions 20 20
Benefits paid -190 -149
Other 9 5
Fair value of plan assets at the end of the period 3 070 2 936
of which financial instruments issued by the group 0 0
of which property occupied by KBC 2 2
Funded status
Plan assets in excess of defined benefit obligations 386 212
Reimbursement rights 0 0
Asset ceiling limit -131 -70
Unfunded accrued/prepaid pension cost 255 142
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period 142 153
Amounts recognised in the income statement -82 -65
Amounts recognised in other comprehensive income 92 -43
Employer contributions 97 93
Other 6 4
Unfunded accrued/prepaid pension cost at the end of the period 255 142
Amounts recognised in the income statement -82 -65
Current service cost -105 -95
Interest cost 5 10
Plan participant contributions 20 20
Other -2 0
Changes to the amounts recognised in other comprehensive income 92 -43
Actuarial gain or loss resulting from changes in demographic assumptions 0 3
Actuarial gain or loss resulting from changes in financial assumptions 76 -152
Actuarial result on plan assets 102 107
Experience adjustments -29 56
Adjustments to asset ceiling limits -59 1
Other 1 -58
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans -14 -18
\n\n\n\n\n
\n

\n
\n

\n\n\n\n\n\n\n\n\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag876": { "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
(in millions of EUR) 31-12-202431-12-2023
Total provisions for risks and charges 141 183
Provisions for off-balance-sheet commitments and financial guarantees 73 91
Provisions for other risks and charges 69 92
Provisions for restructuring 22 37
Provisions for taxes and pending legal disputes 31 37
Other 17 18
\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
Provisions for Provisions for taxes and
(in millions of EUR) restructuringpending legal disputes Other Total
2024
Opening balance 37 37 18 92
Movements with an impact on results
Amounts allocated 3 2 4 9
Amounts used -20 -5 -3 -27
Unused amounts reversed 0 -1 -2 -4
Transfers out of/into liabilities associated 0 0 0 0
with disposal groups
Changes in the scope of consolidation 0 0 0 0
Other 2 -2 -1 -1
Closing balance 22 31 17 69
2023
Opening balance 92 192 20 305
Movements with an impact on results
Amounts allocated 11 10 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 1 0 1
Closing balance 37 37 18 92
\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 Other provisions include 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
- 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
(Court of Appeals for the Second Circuit) 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
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. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the
\n
amended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden
\n
of proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may
\n
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\n\n\n\n\n\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag881": { "value": "\n

\n\n
- 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
(Court of Appeals for the Second Circuit) 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
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. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the
\n
amended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden
\n
of proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may
\n
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\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
(in millions of EUR) 31-12-202431-12-2023
Nominal ProvisionNet exposureNominal ProvisionNet exposure
amount amount
Undrawn portion of credit lines granted
Stage 1 45 481 18 45 463 41 551 20 41 531
Stage 2 3 314 9 3 305 6 683 14 6 670
Stage 3 52 2 50 79 5 73
Total 48 848 30 48 818 48 313 39 48 274
of which irrevocable credit lines 29 180 10 29 170 27 856 23 27 833
Financial guarantees given
Stage 1 10 245 3 10 242 7 860 2 7 859
Stage 2 992 5 987 2 952 6 2 947
Stage 3 113 32 80 133 44 90
Total 11 350 41 11 309 10 946 51 10 895
Other commitments given
Total 1 101 2 1 099 1 421 1 1 420
Off-balance-sheet commitments and financial
guarantees
Total 61 299 73 61 226 60 680 91 60 589
\n\n\n\n
\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 40 924 million euros for liabilities and
\n
1 667 million euros for contingent liabilities (36 842 million euros and 4 489 million euros in 2023). At year-end 2024, some
\n
21.8 billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the
\n
special estate of the covered bond programme (18.9 billion euros at year-end 2023).
\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 2024 (3 million euros in 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
Collateral received (which may be sold or repledged Fair value of collateral sold or
in the absence of default by the owner) (in millions of EUR) Fair value of collateral received repledged
31-12-202431-12-202331-12-202431-12-2023
Financial assets 32 091 42 215 12 279 5 267
Equity instruments 30 21 2 2
Debt securities 31 809 41 959 12 277 5 265
Loans and advances 252 235 0 0
Cash 0 0 0 0
Other 0 0 0 0
\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: i) the amount of cash collateral is recognised as a financial asset and
\n
ii) 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 its 2023 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 amount of 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", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag882": { "value": "\n
- 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
(Court of Appeals for the Second Circuit) 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
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. The proceedings on the merits will therefore continue. On 28 June 2023, KBC filed an answer to the
\n
amended complaint. An investigation of the facts will be concluded on 22 September 2025. Despite the increased burden
\n
of proof, KBC still believes it has good and credible defenses, including demonstrating its good faith. The procedure may
\n
still take several years.
\n

\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag883": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag884": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag885": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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

\n\n
Note 5.9: Retirement benefit obligations
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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) 31-12-202431-12-2023
DEFINED BENEFIT PLANS
Reconciliation of defined benefit obligations
Defined benefit obligations at the beginning of the period 2 724 2 580
Current service cost 105 95
Interest cost 89 104
Actuarial gain or loss resulting from changes in demographic assumptions 0 -3
Actuarial gain or loss resulting from changes in financial assumptions -76 152
Experience adjustments 29 -56
Past-service cost 0 0
Benefits paid -190 -149
Other 3 0
Defined benefit obligations at the end of the period 2 684 2 724
Reconciliation of the fair value of plan assets
Fair value of plan assets at the beginning of the period 2 936 2 746
Actual return on plan assets 198 222
Expected interest income on plan assets, calculated based on market yields on high quality corporate bonds 96 115
Employer contributions 97 93
Plan participant contributions 20 20
Benefits paid -190 -149
Other 9 5
Fair value of plan assets at the end of the period 3 070 2 936
of which financial instruments issued by the group 0 0
of which property occupied by KBC 2 2
Funded status
Plan assets in excess of defined benefit obligations 386 212
Reimbursement rights 0 0
Asset ceiling limit -131 -70
Unfunded accrued/prepaid pension cost 255 142
Movement in net liabilities or net assets
Unfunded accrued/prepaid pension cost at the beginning of the period 142 153
Amounts recognised in the income statement -82 -65
Amounts recognised in other comprehensive income 92 -43
Employer contributions 97 93
Other 6 4
Unfunded accrued/prepaid pension cost at the end of the period 255 142
Amounts recognised in the income statement -82 -65
Current service cost -105 -95
Interest cost 5 10
Plan participant contributions 20 20
Other -2 0
Changes to the amounts recognised in other comprehensive income 92 -43
Actuarial gain or loss resulting from changes in demographic assumptions 0 3
Actuarial gain or loss resulting from changes in financial assumptions 76 -152
Actuarial result on plan assets 102 107
Experience adjustments -29 56
Adjustments to asset ceiling limits -59 1
Other 1 -58
DEFINED CONTRIBUTION PLANS
Expenses for defined contribution plans -14 -18
\n\n\n\n\n
\n

\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
\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
2024, 48% of employees were active participants in the defined benefit plan and 52% in the defined contribution plan (the
\n
corresponding figures at year-end 2023 were 52% and 48%).
\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

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

\n\n\n\n\n\n\n\n\n\n\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-related issues. As regards the
\n
management of the assets, the share of responsible investments came to around 89% at year-end 2024 (89% at year-end
\n
2023). The aim is for the KBC Pension Fund investment portfolio to be carbon-neutral by 2050.
\n
At the end of September 2024, the greenhouse gas intensity of the shares held in portfolio was roughly 37% of the MSCI World
\n
AC benchmark, for the corporate bonds held in portfolio it was roughly 42% of the Iboxx Euro Corporates benchmark and for
\n
the government bonds held in portfolio it was roughly 114% of the JPM EMU Government Bond benchmark, a decrease from
\n
2019 of 62%, 43% and 27%, 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 2024 was 75 million euros and has been added to \u2018Adjustments to asset
\n
ceiling limits\u2019, resulting in the net asset being reduced by this amount.
\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
Additional information on retirement benefit obligations (in millions of EUR) 2024 2023 2022 2021 2020
Changes in main headings in the main table
Defined benefit obligations 2 684 2 724 2 580 3 335 3 387
Fair value of plan assets 3 070 2 936 2 746 3 244 2 849
Unfunded accrued/prepaid pension cost 255142153-128-537
Impact of changes in the assumptions used in the actuarial calculation of plan
assets and retirement benefit obligations
Impact on plan assets 00000
Impact on retirement benefit obligations* -77149-825-35253
\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
Additional information on retirement benefit obligations: DEFINED BENEFIT PLANS, KBC pension fund
Composition (31-12-2024)
Equity instruments 33%
Bonds 53%
Real estate 13%
Cash 0%
of which illiquid assets 17%
Composition (31-12-2023)
Equity instruments 31%
Bonds 55%
Real estate 13%
Cash 1%
of which illiquid assets 17%
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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 2025 (in millions of EUR) 34
Regulatory framework Pension 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 KBC Investment risk and inflation risk.
ALM policy The hedging portfolio hedges against interest rate risk and inflation risk using interest rate swaps.
The return portfolio aims to generate an extra return.
Plan amendments A 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. New employees are signed up to the employer-funded defined contribution
plan.
Curtailments and settlements Not applicable.
Discounting method Based 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
xAverage discount rate 3.10%
xExpected rate of salary increase 2.47%
xExpected inflation rate 2.16%
xExpected rate of increase in pensions \u2013
xWeighted average duration of the obligations 10 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2024 consequent on:
xa decrease of 1% in the discount rate 10.98%
xan increase of 1% in the expected inflation rate 8.69%
xan increase that is 1% higher than the expected real 11.54%
increase in salary
xan 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.
Additional information on retirement benefit obligations: DEFINED CONTRIBUTION PLANS, KBC pension fund
Contributions expected in 2025 (in millions of EUR) 51
Regulatory framework Pursuant to the Belgian Supplementary Pensions Act, the employer must guarantee a minimum return of
2.50% on employee and employer contributions in 2025.
Risks for KBC Investment risk.
Valuation Retirement 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 method Based 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
xAverage discount rate 3.30%
xWeighted average duration of the obligations 15 years
Impact of changes in the assumptions used in the
actuarial calculation of the retirement benefit
obligations
Increase in the retirement benefit obligations
on 31-12-2024 consequent on:
xa decrease of 1% in the discount rate 17.99%
\n\n\n\n\n
\n
\n
\n
\n
\n

\n\n\n\n\n\n\n\n\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag886": { "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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag887": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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
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
(in millions of EUR) 31-12-202431-12-2023
Finance lease receivables
Gross investment in finance leases, receivable 8 607 7 824
At not more than one year 2 132 1 925
At more than one but not more than five years 5 001 4 551
At more than five years 1 475 1 349
Unearned future finance income on finance leases 689 627
Net investment in finance leases 7 919 7 198
At not more than one year 1 948 1 766
At more than one but not more than five years 4 596 4 178
At more than five years 1 375 1 254
Of which unguaranteed residual values accruing to the benefit of the lessor 43 41
Accumulated impairment for uncollectable lease payments receivable 40 31
Contingent rents recognised in the income statement 107 110
Operating lease receivables
Future aggregate minimum rentals receivable under non-cancellable operating leases 773 694
Contingent rents recognised in the income statement 1 1
\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. That channel is becoming increasingly
\n
important in Central Europe, too.
\n
\u2022 Operating leases: involve primarily full service vehicle leases (mainly cars and bicycles). These are sold through the KBC Bank
\n
and CBC Banque branch network and through an internal sales team. Full service car leasing activities are being further
\n
developed in Central Europe, too. The increased importance of leasing hybrid and all-electric vehicles supports the transition
\n
to green mobility, and the 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
\n
\u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation.
\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": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag888": { "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
(in millions of EUR) 31-12-202431-12-2023
Total 2 678 2 611
Retirement benefit obligations or other employee benefits 41 93
Accrued charges and deferred income 437 385
Salaries and social security charges 540 531
Lease liabilities 5 63
Other 1 6561 539
\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", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag901": { "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
Quantities 31-12-202431-12-2023
Ordinary shares 417 544 151 417 305 876
of which ordinary shares that entitle the holder to a dividend payment396 563 328 408 508 807
of which treasury shares20 980 825 8 801 316
Additional information
Par value per share (in EUR) 3.513.51
Number of shares issued but not fully paid up 00
\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 238 275 in 2024 and by 136 462 in 2023, 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
- 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 were repurchased subject to the conditions stated in the authorisation granted by the General Meeting of 5
\n
May 2022. Under this authorisation, the Board of Directors is authorised to repurchase a maximum of 10% of the treasury
\n
shares under specific conditions and at a price that may not be lower than 1 euro or higher than 110% of the last closing
\n
price on Euronext Brussels preceding the date of acquisition. Up to and including 31 July 2024, a total of 20 980 823 treasury
\n
shares were repurchased in several transactions for a total amount of 1 299 999 960 euros. The voting rights attached to
\n
these shares are suspended.
\n
- On 31 December 2023, KBC group companies also held 4 247 KBC shares in portfolio, 4 245 of which were intended to
\n
hedge outstanding derivatives on indices that include KBC Group shares. The 4 245 shares were sold in 2024 as there was
\n
no longer any need for this hedge.
\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
- 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). The instrument was called on 5 March 2024.
\n
- In September 2023, KBC issued 750 million euros in AT1 securities (a perpetual AT1 instrument with a five year first-call date,
\n
a temporary write-down trigger should the common equity ratio fall below 5.125% and an initial coupon of 8.00% per
\n
annum, which is payable every six months).
\n
- In September 2024, KBC issued 750 million euros in AT1 securities (a perpetual AT1 instrument with a seven year first-call
\n
date, a temporary write-down trigger should the common equity ratio fall below 5.125% and an initial coupon of 6.25% per
\n
annum, which is payable every six months).
\n
- 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). In September 2024, KBC made the holders of those securities a capped purchase offer.
\n
Following the placement of new AT1 securities in the amount of 750 million euros in September 2024 (see above), KBC
\n
announced that the maximum acceptance amount for the AT1 securities issued in April 2018 was set at 750 million euros;
\n
on 18 September, KBC announced that 636 million euros had ultimately been repurchased.
\n

\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag902": { "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
Quantities 31-12-202431-12-2023
Ordinary shares 417 544 151 417 305 876
of which ordinary shares that entitle the holder to a dividend payment396 563 328 408 508 807
of which treasury shares20 980 825 8 801 316
Additional information
Par value per share (in EUR) 3.513.51
Number of shares issued but not fully paid up 00
\n\n\n\n\n
\n
\n
\n

\n\n\n\n\n\n\n\n\n\n\n
\u2022 Treasury shares:
\n
- 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 were repurchased subject to the conditions stated in the authorisation granted by the General Meeting of 5
\n
May 2022. Under this authorisation, the Board of Directors is authorised to repurchase a maximum of 10% of the treasury
\n
shares under specific conditions and at a price that may not be lower than 1 euro or higher than 110% of the last closing
\n
price on Euronext Brussels preceding the date of acquisition. Up to and including 31 July 2024, a total of 20 980 823 treasury
\n
shares were repurchased in several transactions for a total amount of 1 299 999 960 euros. The voting rights attached to
\n
these shares are suspended.
\n
- On 31 December 2023, KBC group companies also held 4 247 KBC shares in portfolio, 4 245 of which were intended to
\n
hedge outstanding derivatives on indices that include KBC Group shares. The 4 245 shares were sold in 2024 as there was
\n
no longer any need for this hedge.
\n

\n\n\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag680": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Nominal ProvisionNet exposureNominal ProvisionNet exposure
amount amount
Undrawn portion of credit lines granted
Stage 1 45 481 18 45 463 41 551 20 41 531
Stage 2 3 314 9 3 305 6 683 14 6 670
Stage 3 52 2 50 79 5 73
Total 48 848 30 48 818 48 313 39 48 274
of which irrevocable credit lines 29 180 10 29 170 27 856 23 27 833
Financial guarantees given
Stage 1 10 245 3 10 242 7 860 2 7 859
Stage 2 992 5 987 2 952 6 2 947
Stage 3 113 32 80 133 44 90
Total 11 350 41 11 309 10 946 51 10 895
Other commitments given
Total 1 101 2 1 099 1 421 1 1 420
Off-balance-sheet commitments and financial
guarantees
Total 61 299 73 61 226 60 680 91 60 589
\n\n\n\n
\n
\n
\u2022 Fair value of financial guarantees: based on the available market value.
\n
\u2022 The carrying value of financial assets pledged by KBC as collateral came to 40 924 million euros for liabilities and
\n
1 667 million euros for contingent liabilities (36 842 million euros and 4 489 million euros in 2023). At year-end 2024, some
\n
21.8 billion euros\u2019 worth of residential mortgage loans and cash collections were entered in the cover asset register for the
\n
special estate of the covered bond programme (18.9 billion euros at year-end 2023).
\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 2024 (3 million euros in 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
Collateral received (which may be sold or repledged Fair value of collateral sold or
in the absence of default by the owner) (in millions of EUR) Fair value of collateral received repledged
31-12-202431-12-202331-12-202431-12-2023
Financial assets 32 091 42 215 12 279 5 267
Equity instruments 30 21 2 2
Debt securities 31 809 41 959 12 277 5 265
Loans and advances 252 235 0 0
Cash 0 0 0 0
Other 0 0 0 0
\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: i) the amount of cash collateral is recognised as a financial asset and
\n
ii) 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 its 2023 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 amount of 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", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag685": { "value": "\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
(in millions of EUR) 31-12-202431-12-2023
Finance lease receivables
Gross investment in finance leases, receivable 8 607 7 824
At not more than one year 2 132 1 925
At more than one but not more than five years 5 001 4 551
At more than five years 1 475 1 349
Unearned future finance income on finance leases 689 627
Net investment in finance leases 7 919 7 198
At not more than one year 1 948 1 766
At more than one but not more than five years 4 596 4 178
At more than five years 1 375 1 254
Of which unguaranteed residual values accruing to the benefit of the lessor 43 41
Accumulated impairment for uncollectable lease payments receivable 40 31
Contingent rents recognised in the income statement 107 110
Operating lease receivables
Future aggregate minimum rentals receivable under non-cancellable operating leases 773 694
Contingent rents recognised in the income statement 1 1
\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. That channel is becoming increasingly
\n
important in Central Europe, too.
\n
\u2022 Operating leases: involve primarily full service vehicle leases (mainly cars and bicycles). These are sold through the KBC Bank
\n
and CBC Banque branch network and through an internal sales team. Full service car leasing activities are being further
\n
developed in Central Europe, too. The increased importance of leasing hybrid and all-electric vehicles supports the transition
\n
to green mobility, and the 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
\n
\u2018Sustainability statement\u2019 in the \u2018Report of the Board of Directors\u2019 section for a more detailed explanation.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag686": { "value": "\n

\n

\n
Note 6.3: Related-party 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
20242023
Transactions with related parties,
excluding key management Subsi-Associated Joint Subsi-Associated Joint
(in millions of EUR) diaries companies venturesOtherTotaldiaries companies venturesOtherTotal
Assets 125 202 9 0 337 161 100 25 0 287
Loans and advances 8 72 0 0 80 15 81 0 0 96
Equity instruments (including investments
in associated companies and joint 117 130 9 0 256 146 19 25 0 191
ventures)
Other 0 0 0 0 0 0 0 0 0 0
Liabilities 66 92 1 716 875 45 80 0 677 803
Deposits 63 40 1 713 817 41 23 0 674 738
Other financial liabilities 0 0 0 0 0 0 0 0 0 0
Other 3 52 0 3 58 4 58 0 3 65
Income statement -38 2 0 -21 -56 7 -3 0 1 6
Net interest income -1 2 0 -22 -21 0 1 0 0 1
Interest income 0 3 0 0 4 0 2 0 0 2
Interest expense -1 -2 0 -22 -25 -1 -1 0 0 -2
Insurance revenues before reinsurance 0 0 0 0 0 0 0 0 0 0
Insurance service expenses before 0 0 0 0 0 0 0 0 0 0
reinsurance
Dividend income 4 3 0 4 11 10 0 0 4 14
Net fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission income 0 0 0 3 3 0 0 0 2 2
Fee and commission expense 0 0 0 0 0 0 0 0 0 0
Net other income 1 0 0 0 1 0 -1 0 0 -1
Total operating expenses excluding bank -42 -3 0 -5 -50 -3 -2 0 -5 -10
and insurance tax
Undrawn portion of loan commitments,
financial guarantees and other
commitments
Given by the group 0 1 0 50 51 0 1 0 150 151
Received by the group 0 0 0 0 0 0 0 0 0 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\n\n\n\n\n\n\n\n\n

\n\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Transactions with key management (members of the Board of Directors and Executive Committee of
KBC Group NV) (in millions of EUR)* 20242023
Total* 16 15
Breakdown by type of remuneration
Short-term employee benefits 13 12
Post-employment benefits 3 2
Defined benefit plans 0 0
Defined contribution plans 3 2
Other long-term employee benefits 0 0
Termination benefits 0 0
Share-based payments 0 0
Stock options (units)
At the beginning of the period 0 0
Granted 0 0
Exercised 0 0
Composition-related changes 0 0
At the end of the period 0 0
Advances and loans granted to key management and partners 3 1
\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.
\n

\n\n\n\n\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 \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.
\n

\n\n\n\n\n\n\n\n\n
\u2022 There were no significant impairment charges vis-\u00e0-vis related parties.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag690": { "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
Transactions with key management (members of the Board of Directors and Executive Committee of
KBC Group NV) (in millions of EUR)* 20242023
Total* 16 15
Breakdown by type of remuneration
Short-term employee benefits 13 12
Post-employment benefits 3 2
Defined benefit plans 0 0
Defined contribution plans 3 2
Other long-term employee benefits 0 0
Termination benefits 0 0
Share-based payments 0 0
Stock options (units)
At the beginning of the period 0 0
Granted 0 0
Exercised 0 0
Composition-related changes 0 0
At the end of the period 0 0
Advances and loans granted to key management and partners 3 1
\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.
\n

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

\n\n\n\n\n\n\n\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.
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag715": { "value": "KBC Group NV", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag716": { "value": "NV", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag694": { "value": "\n
Note 6.4: Statutory auditor\u2019s remuneration
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Statutory auditor\u2019s remuneration (in EUR) 20242023
PWC
KBC Group NV and its subsidiaries
Standard audit services 8 425 513 8 547 038
Other services
Other certifications 1 116 295 1 007 482
Tax advice 0 0
Other non-audit assignments 5 279 1 351
KBC Group NV (alone)
Standard audit services 218 335 237 914
Other services 403 751 440 228
\n\n\n\n
\n
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag696": { "value": "\n
Note 6.5: Subsidiaries, joint ventures and associated companies
\n
KBC Group: main companies included in the scope of consolidation at year-end 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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company Share of capital held Business
CompanyRegistered officenumber at group level (in %) unit*Activity
KBC Bank (group)
KBC Bank NV Brussels \u2013 BE 0462.920.226 100.00 BEL/GRP credit institution
CBC BANQUE SA Namur \u2013 BE 0403.211.380 100.00 BEL credit institution
\u010ceskoslovensk\u00e1 Obchodn\u00e1 Banka a.s. Bratislava \u2013 SK -- 100.00 IMA credit institution
\u010ceskoslovensk\u00e1 Obchodn\u00ed Banka a.s. Prague \u2013 CZ -- 100.00 CZR credit institution
KBC Asset Management NV Brussels \u2013 BE 0469.444.267 100.00 BEL asset management
KBC Autolease NV Leuven \u2013 BE 0422.562.385 100.00 BEL leasing
KBC Commercial Finance NV Brussels \u2013 BE 0403.278.488 100.00 BEL factoring
KBC IFIMA SA Luxembourg \u2013 LU -- 100.00 GRP Finance
KBC Securities NV Brussels \u2013 BE 0437.060.521 100.00 BEL stockbroker
K&H Bank Zrt. Budapest \u2013 HU -- 100.00 IMA credit institution
Loan Invest NV Brussels \u2013 BE0889.054.884 100.00 BEL securitisation
United Bulgarian Bank AD Sofia \u2013 BG -- 99.96 IMA credit institution
KBC Insurance (group)
KBC Insurance NV Leuven \u2013 BE 0403.552.563 100.00 BEL/GRP insurance company
ADD NV Heverlee \u2013 BE 0406.080.305 100.00 BEL insurance broker
KBC Group Re SA Luxembourg \u2013 LU -- 100.00 GRP reinsurance company
\u010cSOB Poji\u0161t\u2019ovna a.s. Pardubice \u2013 CZ -- 100.00 CZR insurance company
\u010cSOB Poist\u2019ov\u0148a a.s. Bratislava \u2013 SK-- 100.00 IMA insurance company
DZI (group) Sofia \u2013 BG -- 100.00 IMA insurance company
Groep VAB NV Zwijndrecht \u2013 BE 0456.920.676 100.00 BEL driving school/roadside
assistance
K&H Biztos\u00edt\u00f3 Zrt. Budapest \u2013 HU -- 100.00 IMA insurance company
KBC group
DISCAI NV Brussels \u2013 BE 0773.435.537 100.00 GRP software company
KBC Group NV Brussels \u2013 BE 0403.227.515 100.00 GRP bank-insurance holding
company
KBC Bank (group) various locations -- 100.00 various credit institution
KBC Global Services NV Brussels \u2013 BE 0772.332.707 100.00 GRP cost-sharing structure
KBC Insurance (group) various locations -- 100.00 various insurance company
\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
\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
\u2022 Disclosures of interests in other entities (IFRS 12)
\n
- Significant judgements and assumptions:
\n
- 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
- 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
- For the vast majority of the entities, the voting rights are materially equal to the ownership rights.
\n
- 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
- 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
- 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 2024, the assets under
\n
management at these entities amounted to 4.8 billion euros.
\n
- 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
- In 2024, KBC had received income from unconsolidated structured entities in the form of management fees (11 million
\n
euros) and accounting fees (1 million euros).
\n
- At year-end 2024, KBC held 1.5 billion euros\u2019 worth of notes issued by the unconsolidated structured entities. Its
\n
liabilities towards the unconsolidated structured entities amounted to 0.5 billion euros and comprised mainly time
\n
deposits (0.5 billion euros).
\n
- 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 2024, 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", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag699": { "value": "KBC Group NV", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag700": { "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", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag703": { "value": "\n
Note 6.7: Risk management and capital adequacy
\n
\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
\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 10.88% (fully loaded) at
\n
year-end 2024. This includes the Pillar 1 minimum requirement (4.5%), the Pillar 2 requirement (1.09% set by the ECB following its
\n
supervisory review and evaluation process) and the buffer requirements (5.28% set by the local competent authorities in KBC\u2019s
\n
core markets). At year-end 2024, the fully loaded common equity ratio came to 15.0% (see the \u2018How do we manage our
\n
capital?\u2019 section). At year-end 2024, the transitional common equity ratio came to 13.9%, which represented a capital buffer
\n
of 2.4% relative to the minimum requirement of 11.4%.
\n
\u2022 In accordance with the regulatory requirement, the common equity ratio of KBC Bank must be 11.1% (transitional) at year-end
\n
2024. At year-end 2024, the transitional common equity ratio was 13.2%.
\n
\u2022 The solvency of KBC Insurance is calculated on the basis of Solvency II. At year-end 2024, the Solvency II ratio came to 200%
\n
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
KBC group KBC Bank
(consolidated) (consolidated) KBC Insurance
Key solvency figures for the KBC group, CRR/CRD CRR/CRD (consolidated)
KBC Bank and KBC Insurance (in millions of EUR) transitional transitional Solvency II
31-12-202431-12-202331-12-202431-12-202331-12-202431-12-2023
Total regulatory capital, after profit appropriation 21 048 19 768 18 981 17 952 4 392 4 130
Tier-1 capital 18 485 17 389 16 440 15 573 3 891 3 629
Common equity 16 621 15 639 14 576 13 823 \u2013 \u2013
Parent shareholders\u2019 equity (after deconsolidating KBC 18 932 18 209 16 665 15 450 3 331 3 302
Insurance for the KBC group)
Solvency adjustments -2 311 -2 571 -2 088 -1 627 560 327
Additional going concern capital11 864 1 750 1 864 1 750 \u2013 \u2013
Tier-2 capital22 563 2 379 2 541 2 379 501 501
Total weighted risk volume (RWA)3119 950 113 029 110 087 103 192 \u2013 \u2013
Credit risks 94 218 88 042 94 218 88 042 \u2013 \u2013
Market risks 2 026 2 116 2 026 2 116 \u2013 \u2013
Operational risks 13 843 13 034 13 843 13 034 \u2013 \u2013
Insurance risks 9 133 9 133 \u2013 \u2013 \u2013 \u2013
Holding-company activities and elimination of intragroup 729 704 \u2013 \u2013 \u2013 \u2013
transactions
Solvency capital requirement (insurance) \u2013 \u2013 \u2013 \u2013 2 196 2 005
Common equity ratio (group, bank) 13.9%13.8% 13.2% 13.4% \u2013 \u2013
Solvency II ratio (insurance) \u2013 \u2013 \u2013 \u2013 200% 206%
\n\n\n\n
\n
1 Includes perpetual subordinated loans with fully discretionary, non-cumulative interest payments (included in \u2018Total equity\u2019 under IFRS). The securities also have a loss absorption mechanism
\n
(i.e. a temporary write-down trigger 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
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
\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", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag706": { "value": "\n
Note 6.8: Post-balance-sheet events
\n
\n
There were no significant non-adjusting events between the balance sheet date and the date on which the financial statements
\n
were approved for publication by the Board of Directors (13 March 2025).
\n

\n\n\n\n\n\n\n\n", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag707": { "value": "\n
Note 6.9: General information on the company
\n
\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
genoteerde naamloze 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", "dimensions": { "concept": "kbc:DisclosureOfGeneralInformationOnCompanyExplanatory", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag708": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "Tag709": { "value": "Havenlaan 2, 1080 Brussels, Belgium", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800X3Q9LSAKRUWY91", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "footnote0": { "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": "footnote0", "language": "en" } } } }