KBC Group Sanford Bernstein Conference Merrill Lynch Conference

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• KBC GroupSanford Bernstein ConferenceMerrill
  Lynch Conference
• 28 September 2005 - 5 October 2005

Web site www.kbc.com
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Important information

• This presentation is provided for informational
  purposes only and does not constitute an offer to
  sell or the solicitation of an offer to buy any
  security
• KBC believes that this presentation is reliable,
  although some information may be condensed or
  incomplete
• This presentation contains forward-looking
  statements with respect to our earnings
  development involving assumptions and
  uncertainties. The risk exists that these
  statements may not be fulfilled and that future
  results differ materially.
• By receiving this presentation, each investor is
  deemed to represent that it possesses sufficient
  expertise to understand the risks involved

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Introduction strategic framework

• The strategic framework entails
• Focused business scope
• Retail-, bancassurance- and wealth-management-orie
  nted
• Geographical focus on Belgium and CEE and
  selected Western European markets
• Standalone basis
• no MA ambitions (neither domestic, nor
  cross-border - neither as acquirer, nor as
  target)
• however, opportunistic operational alliances
  possible in certain areas to generate cost
  advantages through scale (industralization of
  operations)
• Solid level of financial strength/solvency
• Attractive shareholder return, including steady
  dividend growth

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Introduction business mix
Selected other markets (mostly in W. Europe)-
private banking- commercial banking
(SME/corporate)- capital markets
Belgium- retail bancassurance- asset
management- private banking- commercial
banking (SME/corporate)
CEE- retail bancassurance- asset management-
private banking- commercial banking
(SME/corporate)
Revenu - geographical breakdown(1H 2005)

• KBC is a top bancassurer and asset manager in
  Belgium and has successfully expanded its
  operations in CEE-5, its 2nd home market
• Recently, private banking has become more of a
  key focus. The PB business was expanded to
  include a Western European network.

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Business mix growth profile
Based on KBC estimates

• Main facts
• 70 of gross income is realized in markets with
  leading market positions (i.e. Belgium and most
  CEE countries)
• An increasing share of income (currently 30) is
  generated in high-growth markets (CEE)
• Key strategic topics
• Topic 1 securing growth trend in (mature)
  Belgian market, given its size
• Topic 2 further increasing share in high-growth
  markets, inter alia, by boosting market power in
  countries where KBC has sub-optimal scale (mainly
  Poland)

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Business mix value profile
BancassuranceCEE
Private banking Belgium
HIGH
RetailbancassuranceBelgium
Commerial bankingBelgium
Retun on allocated capital
International commercial banking
Europeanprivate banking
LOW
LOW
HIGH
Allocated capital
Based on selective 1H2005 data, adjusted for
one-offs

• Main facts
• 85 of capital employed is allocated to
  businesses yielding 20 or more (roughly twice
  the cost of capital) no activity is
  value-destroying
• On the other hand 15 of total capital base (2.3
  bn) is immediate free surplus capital
• Key strategic topics
• Topic 3 shifting European private banking into
  much higher gear
• Topic 4 adequately employing excess capital

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Topic 1 drivers for growth, Belgium
Do not underestimate market potential
KBC Group is well positioned

• Savings ratio amongst highest in the world (every
  year, ca. 15 of GDP flows into fin. assets)
• Market highly receptive to cross-selling of AM
  insurance, fueling strong growth trend in AM and
  life insurance business
• Strong mortgage growth trend (ca. 10 per year)
  expected to continue, as residential property
  price levels are still below other European
  markets
• After a temporary surge of price competition
  (late 2004/early 2005), epecially for
  interest-bearing products, pricing rationality
  is tending to be restored
• Fee rates for retail banking services only 50 of
  European average (gradual increase expected)

• Top-3 market position, esp. strong in Northern
  region (one of the wealthiest regions in the EU)
• Innovative product offering in retail AM
  (steadily increasing market share over the past
  10 yrs.)
• Still high cross-selling potential for insurance
  products and well-performing bancassurance
  distribution model
• Well-diversified revenue structure (50 fee
  income) and further increase in fee income
  targeted (e.g. in SME/corporate)
• Of the top players, level of customer
  satisfaction is high(est)

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Mid-term financial outlook, Belgium
Gross income C/I, banking LLR Net profit
Retail 5 CAGR Low 60s lt 0.25 gt10 CAGR
Business customers gt2 on RWA lt 43 lt 0.35 gt10 CAGR
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Topic 2 growth drivers in CEE
Strong market-growth momentum
KBC Group is well positioned

• Nom. GDP growth in 2005-07 at 6.5 yearly,
  outgrowing EMU by 3-3.5
• Ongoing catch-up in product penetration
  (currently, on avg., only 45 of the population
  has a bank account and 5 a mortgage loan)
• Mortgage volumes growing at double-digit pace (up
  by 32, annualized, in 1H05)
• Financial sector could grow five-fold if
  financial assets to GDP were to reach current
  levels of S. Europe

• Solid market position in retail and corporate
  businesses with nationwide branch networks
• Competitive advantage in enhancing cross-selling
  of asset management and insurance products and
  well positioned in HNWI and private banking
  through epb know-how
• Availability of capital within the Group for
• buy-out of third-party interests or selective
  bolt-on MA
• more aggressive organic growth in Poland since
  immediate MA opportunies are not expected
• Potential entrance into Romanian market

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Bancassurance fueling CEE earnings
Cross-selling results are encouraging

• Now the model is in place
• Transfer of know-how and streamlining of business
  processes and IT systems
• Implementation of KBCs distribution model and
  setting up of sales incentives and adequate sales
  approach
• Unified management responsibility (joint
  management committee of bank and insurance)
• competitive advantage relative to other CEE
  players

KBC Cross-sell rates2004 CZ HU PL SK BE
Consumer loanXLife 83 50 100 94 67
Mortgage loan XLife 45 50 100 75 67
Mortgage loanXProperty insurance 54 71 42 30 50
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Growth in AM fueling CEE earnings

• KBC is well positioned
• Strong appetite for risk-free investments in
  the market, fully in line with KBCs core
  competencies and successful track record in
  Belgium for capital-guaranteed funds
• Cost/AUM below average (around 15 bps vs. 20 bps
  for Europe)
• competitive advantage relative to other CEE
  players

• Results are encouraging
• AUM grew in 1H05 by 40, annualized. Continued
  high growth expected in coming years
• Via the funds business, new customers are being
  recruited. Existing customers who use deposits to
  buy funds replenish their deposit accounts after
  one year

Market share 2003 2004 1H05 Trend
CZ 19 22 26
HU 8 9 11
SK 6 7 8
SLO - 8 10
PL 3 4 4
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Mid-term financial outlook, CEE
RWA CAGR Net profit CAGR Loan-loss ratio Cost/Incomeratio
Banking 10 15 10 15 lt 0.50 lt 60
Premium income CAGR Net profit CAGR Combined ratio
Insurance 15 25 25 - 35 95
AUM growth, mutual funds AUM growth, pension producs
AM 15 20 10 - 20
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Topic 3 value drivers in private banking
Business model integrated private banking
business in selected European markets focusing on
clients with gt1m of investable assets. The
network has been built over the past few years
via separate acquisitions. Operations need to be
further integrated. Total assets currently amount
to 76 bn (Sep-05)

• Dual brand strategy network-led vs. independent
  boutique
• Growth drivers network trade-up, extension of
  product offering and hiring of private bankers

• Integrated network of local pure-play private
  banking brands (boutique style)
• Priority of reducing costs by creating synergies
  within a central hub
• Growth drivers increased share of wallets,
  hiring of PB managers and opportunistic MA

• Small today, but strong market growth expected
  (gt15 p.a.)
• Strengthening a network-led model, leveraging
  Belgian experience

• Low-growth market, focus on profitability
  (leveraging the hub)
• If possible, steer repatriated assets to KBC
  onshore

AUM 18 bn
AUM 27 bn
AUM 3 bn
AUM 28 bn
AUM expected to growth at 9 CAGR on an organic
basis. Opportunistic acquisitions may imply
investments of 150-250 m per year
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Merger synergies in private banking
The KBC-Almanij merger enables synergies to be
achieved via cost-cutting and cross-selling.The
total benefit amounts to 75 m euros (pre-tax) per
year (50 will already be realized as of 2006)
m
Synergy benefits defined as peak recurring
annual increase in pre-tax bottom-line result
(2009 - peak level)
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The private banking hub
Organizational impact
Our endgame vision of the hub

• Centralized global custody services,
  processing/settlement of international payments
  and processing of financial market transactions
  (for all major asset classes i.e., Cash, Bonds,
  Equities, Funds, Structured Products)
• Full harmonization of major IT tools
• Front-office support product sourcing and design
  capability and Centres of Excellence

• Back office great majority of local back-office
  costs eliminated
• Dealing rooms a minimum level of local market
  activities will remain
• IT only local IT support will remain
• Significant reduction in other overheads

Cost/income ratio to be improved from 67 (2004)
to 55
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Mid-term financial outlook, private banking
AUM growth Net profit Cost/Income
Private Banking 9 CAGR 10 CAGR lt 55
14 Belgium, 15 CEE, 0 offshore and 10 W.
Eur. onshore
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Topic 4 valuing excess capital
Capital position Capital position Capital position Capital position
Available capital 1 Surplus capital 2 Immediatefree surplus 3
Total 14.7 bn 4.3 bn 2.3 bn
Internal capital budget requirements Internal capital budget requirements Internal capital budget requirements Internal capital budget requirements
Deleveraging of the holding company Deleveraging of the holding company Deleveraging of the holding company 0.4 0.6 bn
Buy-out of 3rd parties in CEE Buy-out of 3rd parties in CEE Buy-out of 3rd parties in CEE 0.8 1.3 bn
External growth in CEE External growth in CEE External growth in CEE 1.0 2.0 bn
Total Total Total 2.2 3.9 bn

• Immediate free surplus capital amounts to 2.3 bn,
  primarily to be spend in CEE
• KBC currently conducting due diligence for BCR
  in Romania. Outcome expected to be known in the
  coming months

1 Regulatory capital under Basel I/Solvency I
(incl. hybrids and minority interests, after
elimination of intangibles and goodwill),
based on capital position as at 30/03/2005 2
Difference between available capital and internal
minimum level 3 Surplus capital excl. expected
adverse IFRS impact on Tier-1 banking as of 2006
(ca. 0.6 bn), unrealized gains on tied-up assets
(insurance, 0.8 bn) and value of Agfa-Gevaert
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Conclusion growth and value proposition
Third-party buy-outsAcceleration of
bancassurance/AMAssessment of entrance into
Romania (by end 2005)
HIGH
Slovenia
Higher share of walletHigher margin products
Commercial banking Belgium
Czech Rep.
PrivatebankingBelgium
RetailBelgium
Market share
Hungary
Slovakia
Selective approachEfficiency enhancement
Europeanprivate banking
Internationalcommercialbanking
Poland
Organic growth accelerationMA (mid-term)
LOW
LOW
HIGH
Market growth
Based on KBC estimates

• Attractive growth and value proposal within
  current franchises.
• Main focus is on execution - shift to completely
  new markets/business lines unlikely
• Use of excess capital highly dependent on outcome
  of privatization round in Romania

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Conclusion growth and value proposition

• The growth and value outlook is reflected in
  ambitious mid-term financial targets
• Outlook for 2005 On the basis of the solid 1H
  05 earnings and the prevailing view
• regarding the relevant economic and financial
  parameters, KBCs 2005 net profit is
• expected to exceed the10 growth level,
  amounting to more than 2 bn euros

Efficiency Cost/income, banking Combined ratio, non-life max. 58 max. 95
Financial strength Tier-1, banking Solvency margin, insurance min. 8 min. 200
Value creation Adjusted ROE EPS growth (CAGR) min. 16 min. 10
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Foto gebouw
Appendices
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Market cap ranking in Euroland
1 BSCH (63 bn)
2 BNP Paribas (53 bn)
3 BBVA (47 bn)
4 Deutsche Bank (39 bn)
5 Société Générale (39 bn)
6 ABN AMRO (37 bn)
7 Crédit Agricole (33 bn)
8 Fortis (31 bn)
9 Unicredit (29 bn)
10 KBC (25 bn)
11 Intesa BCI (23 bn)
12 Dexia (20bn)
13 San Paolo IMI (18 bn)
14 HVB (17 bn)
15 Allied Irish Banks (16 bn)
16 Bank Austria (13 bn)
17 Commerzbank (13bn)
18 Mediobanca (12 bn)
19 Bank of Ireland (12 bn)
20 Bco Popular (12 bn)
DJ Euro Stoxx Banksconstituents
August 2005
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Shareholder structure
CERA/Almancora27.1
Free float47.3
MRBB11.6
Other committed shareholders 11.7
(own shares 2.3, including ESOP hedge)
Situation as at 30 June 2005

• KBC is majority-owned by a group of committed
  shareholders, thereby providing continuity for
  the pursuit of long-term strategic goals
• Core shareholders include the Cera/Almancora
  Group (co-operative investment company), a
  farmers association (MRBB) and a syndicate of
  industrialist families

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KBCs presence in CEE
CEE profit contribution to KBC Group
Share of business segments in gross income, CEE
Banking
Profit contribution, Poland Profit contribution, Poland
2003 2004
-295 m 25 m
Total assets, bank 5 bn EURMarket share, bank 5 (No. 8)Market share, life 3 (No. 7)Market share, non-life 11 (No. 2) Total assets, bank 5 bn EURMarket share, bank 5 (No. 8)Market share, life 3 (No. 7)Market share, non-life 11 (No. 2)
Profit contribution, CZ SK Profit contribution, CZ SK
2003 2004
143 m 162 m
Slovakia
Total assets, bank 2 bn EURMarket share, bank 6 (No. 4)Market share, life 4 (No. 8)Market share, non-life 2 (No. 7)
Czech Republic
Total assets, bank 18 bn EURMarket share, bank 21 (No. 2)Market share, life 8 (No. 5)Market share, non-life 4 (No. 6)
Profit contribution, Hungary Profit contribution, Hungary
2003 2004
11 m 31 m
Total assets, bank 7 bn EURMarket share, bank 11 (No. 2)Market share, life 4 (No. 7)Market share, non-life 4 (No. 6) Total assets, bank 7 bn EURMarket share, bank 11 (No. 2)Market share, life 4 (No. 7)Market share, non-life 4 (No. 6)
Profit contribution, Slovenia Profit contribution, Slovenia
2003 2004
10 m 26 m
Minority stake (34)Market share, bank 41 (No. 1)Market share, life 6 (No. 5) Minority stake (34)Market share, bank 41 (No. 1)Market share, life 6 (No. 5)
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Group income statement, 1H 2005
(in m euros) Banking Insurance AM KBL epb Gevaert Holding Group
Net interest incomeGross earned premium, insuranceDividend incomeNet gains from FI at FV Net realised gains from AFS assetsNet fee and commission incomeOther income 1 80706712163605223 2661 707864144-14829 -107811841 7907822120633 -2031437049 -3000-40-2235 2 1221 707169225265839330
Gross income 2 887 2 088 199 429 101 200 5 660
Operating expensesImpairments - o/w on loans and receivables - o/w on AFS assetsGross technical charges, insuranceCeded reinsurance resultShare in results, associated companies -1 685-34-3410017 -254-20-1-18- 1464-330 -30000000 -287-501002 -421110015 -257000000 -2 313-57-34-16-1 464-3333
Profit before taxes 1 185 316 169 137 75 -57 1 826
Income tax expense Minority interests -306-96 -66-4 -430 -39-4 -12-1 -20 -469-104
Net profit 784 246 126 94 63 -59 1 253
Excl. intrasegment eliminations
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Areas of activity overview, 1H 2005
(in m euros) Retail CEE SME/Corp. Markets KBL epb Gevaert Total
Banking and AM
Gross incomeOperating expensesImpairmentsIncome tax expenseMinority interestsNet profit group share 1 288-7347-1780383 925-526-7-71-41282 508-183-34-840208 410-235-2-670106 429-289-5-39-494 3 515-2 004-39-415-1001 003
Insurance
Gross income (- tech. chg.)Operating expensesImpairmentsIncome tax expenseMinority interestsNet profit group share 373-156-15-46-1155 131-83-1-10-730 47-15-4-10017 591-254-20-66-4246
Holding Co
Net profit group share 63 3
Group total
Net profit Group shareShare in group resultROAC 5394329 3122554 2251820 106828 94816 63511 1 25320
Excl. non-allocated results
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Valuation
Valuation relative to peer group

• Key figures
• Share price 66.6 euros
• Net asset value 40.0 euros
• 1H 2005 EPS 3.50 euros
• Analysts estimates 1
• 2005 EPS consensus 5.97 (33 y/y)
• 2006 EPS consensus 6.24 (4 y/y)
• 2005-06 P/E 10.9
• Recommendations
• Positive 42
• Neutral 42
• Negative 16

weighted P/E 2005-06 unweighted P/E 2005-06
CEE banks 2 15.0 15.1
CEE-exposed banks 3 11.6 12.4
Euro-zone banks 4 11.5 12.4
KBC 1 10.9 10.9
BEL banks 5 10.3 10.4
Weighted and unweighted averages of IBES data 2
OTP, Komercni, Pekao, BPH PBK, BRE 3 BA-CA,
Erste, Unicredit, Soc. Gen., Intesa BCI 4 Top-20
DJ Euro Stoxx Banks 5 Fortis, Dexia
Situation as at 18 August 2005
5 Smart consensus collected by KBC (18 estimates)
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Contact information

• Investor Relations OfficeLuc CoolNele
  KindtMarina Kanamoriinvestor.relations_at_kbc.com
• Surf to www.kbc.com for the latest update.