State of the Belgian banks

Against a moderate economic backdrop, Belgian banks delivered robust results last year, reflecting both strong profitability and resilience. The six largest banks (BNP Paribas Fortis, KBC Group, Belfius, ING Belgium, Crelan, and Argenta) have posted a collective net profit of about EUR 9 billion in 2024, based on fully consolidated financial reporting figures, translating to an average return on equity of 12%. This performance is underpinned by stabilizing net interest income – through growth in lending volumes and successful strategies to attract and retain customer deposits – while diversifying revenue streams and generating higher net fees and commission income, in combination with low net credit losses (primarily due to the release of previous management overlays).
This year, the outlook for Belgian banks remains stable, though somewhat less buoyant than in previous periods. Profitability is expected to remain solid, though net interest margins are likely to gradually narrow as interest rates decline. Credit growth is anticipated to pick up moderately as financing conditions improve, while cost containment and digital investments will be key priorities. Risks remain manageable, with stable capital and liquidity positions, though banks will need to continue monitoring potential vulnerabilities in real estate lending, while remaining vigilant against geopolitical and cyber risks.
Nonetheless, Belgian banks have entered 2025 from a position of strength, with strong earnings and robust capital. Sustaining this performance will require careful management of margin pressures, continued digital transformation, and proactive risk oversight.
This State of the Banks report presents our perspective on the current state of the Belgian banking sector, based on an analysis of the annual and risk reports from the six largest banks. It is designed to provide valuable insights for professionals, stakeholders, and industry practitioners, highlighting the challenges and opportunities that are shaping the banking landscape.
We welcome any feedback on this report and encourage you to reach out to us for further discussions.
Executive Summary
Key Highlights
- Income – Net interest income decreased for most banks due to lower interest rates and heightened deposit competition, but this was more than offset by an average 10.5% increase in net fee and commission income. Asset management, insurance, and payment services were the primary drivers of this growth. Other income sources, such as leasing and insurance, remained important for the largest banks, while smaller banks continued to rely more heavily on NII.

- Costs – Operating expenses at major Belgian banks increased modestly in 2024, primarily due to higher staff costs from inflation-linked wage indexation and continued investments in digital transformation and IT infrastructure. Technology expenses rose across the sector, reflecting the need to enhance digital platforms, automate processes, and comply with evolving regulations. Despite these upward pressures, efficiency initiatives helped contain cost-to-income ratios.

- Asset quality – Asset quality indicators remained strong despite the cost of risk rising slightly for the largest banks due to higher impairment charges, while others saw moderate declines from non-recurring effects and model changes. Loan staging under IFRS-9 showed positive trends, with more loans migrating to Stage 1 and stable or improving coverage ratios.


- Capital – Capital positions were robust, as all major Belgian banks exceed regulatory CET1 requirements comfortably, with average CET1 management buffers amounting to around 3% of RWA (about EUR 15 billion sector-wide).

- Liquidity & Funding – Liquidity and funding metrics were healthy. LCRs for the largest banks stabilized above regulatory thresholds, while other banks improved their liquidity through asset accumulation and deposit strategies. NSFRs also improved, driven by growth in stable customer deposits, ensuring strong long-term funding profiles.

Strategic Outlook
- The era of rapid net interest margin (NIM) expansion is drawing to a close, with profitability expected to normalize in 2025. As NIMs compress and Basel IV introduces stricter risk-weighted asset requirements, Belgian banks are prioritizing diversification by expanding fee-based income streams
- Cost management remains a strategic imperative amid upward pressures from legacy IT, regulatory demands, and wage inflation. Successfully balancing cost containment with ongoing investment in customer-centric innovation remains vital for sustaining profitable growth.
- Artificial intelligence is becoming a cornerstone of innovation in banking. Leading institutions in Belgium are leveraging AI for digital assistants, automated lending, and productivity enhancements, while also investing in workforce training and governance to ensure responsible adoption. This technological shift is expected to fundamentally reshape workforce skills, organizational structures, and resource allocation, with banks positioning themselves to harness its transformative potential.
- Regulatory pressures are intensifying. The EU’s Digital Operational Resilience Act (DORA) will elevate digital risk management standards, requiring banks to strengthen controls against ICT disruptions and cyber threats. Investments in cybersecurity, business continuity, and third-party oversight are therefore expected to further increase, with digital resilience now a Board-level priority. Meanwhile, new regulation such as FIDA and PSD3/PSR will add complexity and administrative burden, even as supervisory authorities seek to streamline requirements without compromising solvency or liquidity standards.
- Sustainability is moving to the core of banking strategy, driven by the first CSRD-compliant sustainability reports and an increased focus on climate risk management. The transition to net zero presents both challenges and opportunities, particularly in developing credible transition plans for financed emissions. However, improving data quality and comparability in sustainability reporting remains a work in progress
Looking ahead, Belgian banks’ success will depend on their ability to manage costs, innovate responsibly, and navigate an evolving regulatory and geopolitical landscape, ensuring resilience and competitiveness in 2025 and beyond.
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