Belfius Bank SA/NV

The stable outlook reflects our view that Belfius' solid franchise, good business diversification, and disciplined underwriting standards will see it maintain its creditworthiness over the next two years. The bank's profitability, supported by its bancassurance model and the high interest rate environment, also positions it well to deliver its 2025 strategy. We could lower the rating if Belfius departs from its current capital management policy. This could happen if the bank unexpectedly upstreams higher dividends to its shareholders or faces significant unforeseen one-off costs that weaken its RAC ratio below 10%. Though not our base-case scenario, we could also lower the rating if we see a risk that profitability falls significantly after the rebound since 2021. We consider an upgrade

...Belfius Bank SA/NV (Belfius) should be able to preserve its sound solvency levels in the coming years. S&P Global Ratings anticipates that Belfius' risk-adjusted capital (RAC) ratio will stay about 10.7%-11.3% over the next two years compared with 10.9% at year-end 2022. We expect net interest income to be almost flat over the coming year but still sufficient to absorb increasing operating costs amid ongoing investments and inflationary pressures. Overall, we expect a return on average common equity of about 7.4%-7.9% over the next two years, down from our estimation of 8.7% for 2023....

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