BofA Sees M&A as Key Catalyst for KBC Group Ahead of Q3 Earnings

01:33 AM EDT, 10/26/2026 (MT Newswires) -- BofA Global Research believes mergers and acquisitions are the next key drivers for KBC Group (KBC.BR), noting that the Belgian bank-insurance group's earnings are skewed to the downside. "We believe KBC has reached the end of its organic earnings upgrade cycle. We estimate a higher ECB rate at >3% could put pressure on profitability from lower lending growth, higher inflation-linked staff costs in Belgium and faster normalisation of CoR. The next leg of the story is likely to come from excess capital deployment, most likely through EPS-accretive M&A. A potential Ethias transaction is nearing a key phase, with sale confirmation expected by year end and a bidding outcome in early 2027. KBC may also be pursuing other options aligned with its strategy of strengthening core markets and selectively expanding into new ones," analysts said in a third-quarter earnings preview note on banks from Belgium, the Netherlands, and Luxembourg. Ahead of KBC's third-quarter results on Nov. 12, the research firm projects an 11% year-over-year increase in the quarter's net profit to 1.11 billion euros, citing an expected 12% rise in revenue partly offset by 7% higher expenses and a "normalized" cost of risk. Within this context, BofA maintained its buy rating and price objective of 140 euros on the stock, while raising the price objective of the company's American depositary receipt to $82 from $80 due to currency adjustments.