Update: Belfius Bank SA/NV

This increase in insurance overcapitalization mainly arises from the new "Insurer Risk-Based Capital Adequacy: Methodology And Assumptions," criteria we published in November 2023. We risk-weight insurance subsidiaries' overcapitalization by 375% and then deduct it from our S&P Global Ratings risk weighted assets (RWAs), with therefore a 52 basis points positive effect on Belfius' RAC at end-2023. We anticipate that RAC ratio will further increase to 11.7%-13.1% over the next two years reflecting our expectations of sustained business performance, with a return on equity of about 9.0%-9.6%; low-single-digit growth in the outstanding lending portfolio and nonperforming assets; and a dividend payout ratio of 40%. We do not factor in any potential but uncertain developments, such as an acquisition or dividend policy

...Belfius Bank is close to achieving the aims of its "Inspire 2025" strategy. We understand the group has been focusing on improving its customer offering, notably through digitizing its daily banking services, improving personal investment advisors' availability, and giving access to real estate and mobility services via its digital platform. At year-end 2023, Belfius had almost achieved its 2025 aim to have a market share of close to 20% in its various segments, and toward 25% for enterprise and entrepreneurs; at that stage it had 17.5% on new production of mortgage loans and 19.4% and 21.1% of the domestic small business and larger corporate market share, respectively. We believe Belfius will continue to focus on efficiencies to achieve its cost-to-income ratio target of below 57% (not including IFRS 17 impact), notably via increasing recourse to digital channels, critical to managing costs in an inflationary environment and sustaining profitability through the cycle. However, anticipated...

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