As such, the firm said that it had an adjusted net profit of €457 million, compared with €485 million in the previous quarter and €373 million in the corresponding quarter of 2012. For the first nine months of the year, the adjusted net profit stood at €1300 million compared with €1217 million in the first nine months of 2012.

Group chief executive Johan Thijs said that the firm had managed “to increase levels of net interest income and net interest margin, while posting growth in deposits and mortgages, retain a good combined ratio, keep an excellent cost/income ratio and reduce impairments.”

“However, fee and commission income was weaker, mainly due to the seasonal dip, and the net result from financial instruments at fair value was lower,” Thijs added in a company statement.

Looking at the regional banking divisions, the Belgian business unit generated a net result of €391 million, above the previous quarterly average of €358 million thanks to higher interest income, and a lower level of loan loss impairment charges. Similarly, the firms Czech Republic unit posted €157 million in results, above the average figure of €135 million for the four preceding quarters. Compared with the previous quarter, this quarter included a small decline in net interest income, increased unit-linked life insurance sales and a higher net fee and commission income.

Conversely, KBC’s international markets unit is still posting poor results of - €12 million, as the Irish business still accounts for the bulk of impairments on the firm’s earnings. The third quarter is, however, an improvement on the average of - €42 million for the four preceding quarters.

“Overall, the banking activities accounted for a negative net result of - €17 million,as the positive results in Slovakia, Hungary and Bulgaria were wiped out by the negative result in Ireland,” explained Thijs.

Thijs also reaffirmed that KBC will continue to finalise its divestment plan, notably with the sale of KBC Bank Deutschland - a deal which will improve its solvency position by roughly 15 basis points.

Lastly, the group said that its capital position remains strong, with a tier-1 ratio of 15.8 per cent, even after the large repayment of €1.17 billion of Flemish state aid, in addition to a penalty of €0.58 billion, at the beginning of July.