KBC Groep : KBC Group: KBC Group 2012 reference figures according to the new
business unit breakdown
KBC Press release - Outside trading hours
Brussels, 25 April 2013
On 16 May 2013, KBC Group will issue its first quarterly results based on its
new business unit structure, which had been announced at an earlier date. In
order to prepare investors and analysts for the change, the group is
pro-actively providing the market with the 2012 reference figures.
New business unit structure since 1 January 2013
A new management structure was introduced at the start of 2013, reflecting the
group's updated strategy. More information on this is available in the press
release ('KBC 2013 and beyond') and presentation of 8 October 2012, and the
2012 annual report, available on www.kbc.com.
Based on this new management structure, the group also reworked its financial
segment reporting presentation.
Up until the end of 2012, the segments consisted of the Belgium Business Unit
(retail bancassurance), the Central & Eastern Europe Business Unit (Czech
Republic, Hungary, Slovakia, Bulgaria), the Merchant Banking Business Unit
(corporate banking and market activities in Belgium and abroad, plus KBC Bank
Ireland) and the Group Centre (results of the holding company, certain items
that were not allocated to the business units, and the results of companies to
In the new reporting presentation, the segments^1 are essentially:
*the Belgium Business Unit (all activities in Belgium)
*the Czech Republic Business Unit (all activities in the Czech Republic)
*the International Markets Business Unit (activities in Ireland, Hungary,
*the Group Centre (results of the holding company, certain items that are
not allocated to the business units, results of companies to be divested,
and the legacy and own credit risk impact (see below)).
A more detailed definition is provided in annex.
The main differences between the former and new business units are:
*The former Belgium Business Unit has been extended to include the Belgian
merchant banking activities (corporate banking and market activities),
including KBC Bank's foreign branches (previously part of the Merchant
Banking Business Unit).
*The former Central & Eastern Europe Business Unit has been split up into a
separate Czech Republic Business Unit, reflecting the importance of that
country within the group's operations, while the operations in the other
core countries - Hungary, Slovakia and Bulgaria - have been grouped under
the International Markets Business Unit.
*KBC Bank Ireland, which belonged to the former Merchant Banking Business
Unit, has now been incorporated into the International Markets Business
1 The management structure of the group also includes an International Product
Factories Business Unit. The results of the activities of this business unit
are included in the results of the other business units based on geography.
Consequently, this business unit is not presented separately when the results
are reported by segment.
Introduction of the 'result excluding the impact of legacy CDO and divestment
activities and own credit risk' ('result excluding legacy and OCR')
In the previous reporting framework, the IFRS profit and loss account was
supplemented by a so-called 'underlying' profit and loss account (excluding
non-operational and exceptional items). This is not the case anymore. However,
in addition to the figures according to IFRS, KBC will still provide figures
aimed at giving more insight into the ongoing business performance.
This means that, over and above the IFRS profit and loss account, a reworked
profit and loss account will be provided, in which a limited number of
non-operational items is excluded from the P/L and summarised into three lines
at the bottom of the reporting presentation^2. Segment reporting is based on
this reworked presentation.
The items in question are:
*legacy CDO activities (mainly valuation changes of CDOs and fees for the
CDO guarantee agreement);
*legacy divestment activities (impairment and gains/losses in relation to
*the impact of changes in fair value of own debt instruments due to own
In the segment reporting presentation, these items are all assigned to the
New reference quarterly figures for 2012
Attached and on www.kbc.com (home page), the 2012 quarterly reference figures
are available in an Excel file. Separate sheets are provided for the:
*Total for KBC Group
*Belgium Business Unit
*Czech Republic Business Unit
*International Markets Business Unit (with separate sheets for Slovakia,
Hungary, Bulgaria and Ireland)
Annex: definition of segments
The Belgium Business Unit includes the activities of KBC Bank NV and KBC
Insurance NV, as well as their Belgian subsidiaries (CBC Banque, KBC Asset
Management, KBC Lease Group, KBC Securities, KBC Group Re, etc.). Results
related to the legacy businesses and the valuation of own credit risk have
been moved to the Group Centre.
The Czech Republic Business Unit includes all of KBC's activities in the Czech
Republic. This encompasses the CSOB group (operating mainly under the brands
CSOB, Era, Postal Savings Bank, Hypotecni banka and CMSS), the insurance
company CSOB Pojišt'ovna, CSOB Asset Management and Patria Finance.
The International Markets Business Unit mainly includes the activities in the
other (i.e. non-Czech) Central and Eastern European core markets (CSOB Bank
and CSOB Poist'ovna in Slovakia, K&H Bank and K&H Insurance in Hungary, CIBank
and DZI Insurance in Bulgaria) and KBC Bank Ireland.
The Group Centre incorporates the results of the holding company KBC Group NV,
KBC Global Services, some results that are not attributable to the other
business units, the elimination of intersegment transactions and the results
of the remaining companies that have still to be divested and activities in
run-off. It also includes results related to the legacy businesses (CDOs,
divestment results) and the valuation of own credit risk.
2 The former 'underlying' figures also excluded changes in the fair value of
certain ALM hedging instruments; these are now included in the business units'
results. Moreover, trading results, which are included in various line items
in the IFRS presentation, are still being moved to 'Net results from financial
instruments at fair value'. Whereas this was performed for every business unit
in the former reporting presentation, it is now limited to KBC Bank Belgium
(Belgium Business Unit), due to materiality.
KBC Group NV - Havenlaan 2 - 1080 Brussels
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Source: KBC Groep via Thomson Reuters ONE
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