KBC (AO) | Buy | Feedback from conference call

Research evidence excerpt

KBC (AO) | Buy | Feedback from conference call

News comment

Release date: 12 May 2026

Benoit Pétrarque

Head of Thematic Banking Research

Buy +31 20 563 23 82KBC bpetrarque@keplercheuvreux.com

Belgium | Banks & Asset Managers Beta Profile: MCap: EUR46.1bn Country Top Picks

Target Price: EUR145.40 Bloomberg: KBC BB Reuters: KBC.BR

Current Price: EUR116.10 Free float 55.0%

Up/downside: 25.2% Avg. daily volume (EURm) 89.2

YTD abs performance 4.4% Market data: 11 May 2026

52-week high/low (EUR) 122.50/82.92

Feedback from conference call

Key points:

Key message from this relatively short call was that 1) the NII guidance for FY-2026 at EUR6,725m is indeed very conservative, but

there are still uncertainties on the duration of the war in the Middle East that could have an impact on the NII guidance (ie longer

war would lead to on one side a more favourable interest rate curve, but on the negative side a likely increase of mix shift into

term deposits, higher saving deposit rates following potential ECB hikes) hence management prefers to update the market in

August, and 2) the EUR75m management overlay is a one-off impact, and the underlying asset quality remained strong in Q1 with

underlying cost of risk at +15bps.

We find the -4% today overdone. The net profit in Q1 was a c3% miss due to a EUR75m one-off management overlay that, looking

at the KBC loan exposure, is not a translation of high exposures to risky sectors. The shift to term deposits of EUR+2.4bn in Q1 was

mainly driven by 365Bank (EUR+1.4bn), and the remaining part was linked to a EUR0.7bn shift executed by private banking clients

in Belgium, which we think should be seen as a positioning into the Middle East crisis. KBC does not see any shift to term deposits

on the retail side in Belgium.