Shares of Belgium’s largest bank KBC hit a three-year high as strong revenue and a one-off tax benefit lifted fourth quarter net profit above expectations.

“KBC presented a strong set of fourth-quarter results, with a beat on the pre-provision level driven by strength across all revenue lines and continued cost control,” RBC Europe said in a note.

Fourth-quarter profit of 1.17 billion euros surpassed the 1.06 billion euros forecast in a company provided poll.

KBC reported a 3% quarterly rise in net interest income (NII) to 1.43 billion euros, also above consensus, with net fee and commission income rising 9% from the third quarter.

The lender expects total income to grow by at least 5.5% this year from 2024, while NII is seen at no less than 5.7 billion euros, supported by organic loan growth of around 4%.

Insurance revenue before reinsurance is seen rising 7% from 2024’s 2.95 billion euros which accounted for more than 26% of total income.

With KBC’s non-NII income representing 50% of total revenue versus 32% for ING, the Belgian lender is better positioned for a lower-interest rate environment.

A strong presence in Central and Eastern Europe where central banks are maintaining higher interest rates also insulates KBC from ECB rate cuts. Its Czech Republic subsidiary posted a 33% quarter-on-quarter rise in net profit.