Net earnings for 3Q05 came in at EUR 173.1m, up 38.1% y/y but down 1.3% q/q, slightly higher than the consensus forecast of EUR 170.2m (according to Bloomberg) and our own expectation of EUR172.6m. However, this appears to be due to higher-than-expected trading gains (albeit offset to some extent by a rise in provisioning) so the quality of results may be somewhat of an issue in terms of the overall market reaction. Most items in the group P&L appear to be broadly in line with expectations, with the following exceptions that offset one another:
+ Net trading income jumps to EUR66.4m versus an expectation of EUR49.9m ( a diference of +16.5m) and a 2Q05 level of EUR 48m.
- Net fee income came in at EUR304.9m versus an expectation of EUR 309.9m (a difference of –5m) and a 2Q05 level of EUR305.9m.
- Risk provisions jump to EUR119.2m versus an expectation of EUR 109.7m (a difference of -9.5m) and a 2Q05 level of EUR108.6m.
EURm 9M05A 3Q04 y/y (%) Consensus KBC est
Net interest income 703 677.4 3.6 692 701.9
Net commission income 305 285.3 8.6 312 309.9
Net trading result 66 47.9 4.2 46 49.9
Income from insurance 10 12.7 -7.1 - 11.8
Total income 1084 1,023.30 4.9 - 1,073.50
General admin.exp. 666.9 -660.2 0.7 - -664.7
Risk provisions 119 -110.1 -0.4 - -109.7
Minority interests 54.4 -58 -16.9 - -48.2
Net profit after minorities 173.1 125.3 37.8 163 172.6
A conference call will be held today, October 31 at 3:30pm CET (2:30pm UK). Dial-in number: +44 207 784 1017.