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26th February 2019

Negative Yields Do Wonders | Bank Capital Insights

KBC issues EUR Perp NC5 at yield of 4.75%

KBC (the Belgian bank assurer) apparently are issuing a EUR 500 million Perp NC 5 AT1 with a yield of 4.75%.  This despite Santander’s decision not to call their 6.25 EUR AT1 a couple of weeks ago and general economic uncertainty.

KBC has a good credit profile as reflected in its fully loaded CET1 ratio 16%, leverage ratio of 6.1%, very low credit costs (in fact negative 4 bps for 2018) and strong earnings as reflected in the ROE of 16%.  But, even still, given the bank’s business model…

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