We recommend investors to take a second or first look at KBC according to The PH Score™. We believe that KBC's share price can outperform its peers over the next 12 months.
The bank has a robust consumer and corporate footprint across Belgium and the Czech Republic, and is seeing some incremental enhancement in the Irish legacy loan portfolio.
The bank has balanced and diverse earnings streams, supported by bancassurance.
Capital is adequate: Fully loaded CET1 of 14%.
Liquidity is sufficient, underpinned by customer deposits from its consumer franchise above all to fund lending.
Asset Quality (despite the sizeable Irish impairments) and risk/credit controls are satisfactory given the stable situation of its main markets though the evolution of smaller exposure to central and eastern Europe needs to be monitored.
Costs are under tight control.
ROE is a solid standout (excluding some rather exotic Italian ratios) in Europe and the pricing of that Profitability is not dear given an Earnings Yield of 10%.