KBC Group

1

• KBC Group
• Company presentationAutumn 2005

Web site www.kbc.comTicker codes KBC BB
(Bloomberg) KBKBT BR (Reuters)
2
Contact information

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

3
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

4
Table of contents

1. Company profile
2. Strategy and earnings drivers
3. 1H 2005 financial highlights
4. Information on capital management
5. Closing remarks on valuation

5
Foto gebouw
1
Company profile
6
Ranking in Euroland
Market cap ranking
Dec 2002
Aug 2005
Aug 2004
1 BNP Paribas (35 bn) 1 BNP Paribas (43 bn) 1 BSCH (63 bn)
2 BSCH (31bn) 2 BSCH (37 bn) 2 BNP Paribas (53 bn)
3 BBVA (29 bn) 3 BBVA (36 bn) 3 BBVA (47 bn)
4 Deutsche Bank (26bn) 4 Société Générale (30 bn) 4 Deutsche Bank (39 bn)
5 ABN AMRO (25 bn) 5 Deutsche Bank (30 bn) 5 Société Générale (39 bn)
6 Société Générale (24 bn) 6 Crédit Agricole (29 bn) 6 ABN AMRO (37 bn)
7 Unicredito (22 bn) 7 ABN AMRO (28 bn) 7 Crédit Agricole (33 bn)
8 Fortis (22 bn) 8 Unicredit (24 bn) 8 Fortis (31 bn)
9 Crédit Agricole (14bn) 9 Fortis (23 bn) 9 Unicredit (29 bn)
10 Dexia (14 bn) 10 Intesa BCO (17 bn) 10 KBC (25 bn)
11 Intesa BCI (12bn) 11 Dexia (16 bn) 11 Intesa BCI (23 bn)
12 Allied Irish Banks (12 bn) 12 KBC (15 bn) 12 Dexia (20bn)
13 Bank of Ireland (10 bn) 13 SanPaolo IMI (13 bn) 13 San Paolo IMI (18 bn)
14 KBC (9 bn) 14 Allied Irish Banks (11 bn) 14 HVB (17 bn)
15 SanPaolo IMI (9 bn) 15 HVB (10 bn) 15 Allied Irish Banks (16 bn)
16 Banco Popular (8 bn) 16 Commerzbank (8 bn) 16 Bank Austria (13 bn)
17 HVB (7 bn) 17 Erste Bank (8 bn) 17 Commerzbank (13bn)
18 Mediobanca (6 bn) 18 Bank Austria (8 bn) 18 Mediobanca (12 bn)
19 Bca MPS (6 bn) 19 Mediobanca (7bn) 19 Bank of Ireland (12 bn)
20 Bco Popular (5 bn) 20 Bca MPS (6 bn) 20 Bco Popular (12 bn)
DJ Euro Stoxx Banksconstituents
7
Shareholder structure
Free float
CERA/Almancora27.1
Free float47.3
MRBB11.6
Other committed shareholders 11.7
(own shares 2.3, including ESOP hedge)
Situation as at 31-Dec-04(before merger with
Almanij)
Situation as at 30-Jun-05

• 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

8
Business portfolio
Revenue geographical breakdown(1H 2005)
Selected other markets (mostly in W. Europe)-
private banking- SME/corporate
CEE- retail bancassurance- asset management-
private banking- SME/corporate
Belgium- retail bancassurance- asset
management- private banking- SME/corporate

• 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 (69 bn AUM) has become
  more of a key focus. The PB business was expanded
  to include a Western European network. KBC is
  also active be it rather selective in
  commercial banking (mostly in W. Europe) and
  financial markets.

9
Top-3 player in Belgium
Individual Life
Savings deposits
Mutual funds
Market share 32 (1st)
19 (2nd ) 15 (3rd)
Non-life insurance
Mortgages
Business loans
Market share 24 (2nd) 21 (2nd)
9 (4th)

• Consolidated banking landscape (80 of market
  held by top-4 banks)
• Market highly receptive to cross-selling of AM
  insurance products (the bancassurance model
  dominates)

10
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)
11
KBCs presence in CEE
Percent of towns with KBC branch
Density of KBCs branch network

• KBC Group is one of the largest international
  players in the region
• The density of KBCs branch network is amongst
  the highest in the CEE region
• Unlike the other players, KBC limits its presence
  to the EU Member States (Czech Republic,
  Slovakia, Hungary, Poland and Slovenia) and is
  active in both the banking and insurance fields

12
KBCs commercial banking network
Credit exposure
Belgium 61 bn
CEE 21 bn
Western-Euope 32 bn
Rest of the world 8 bn
TOTAL 122 bn

13
KBCs private banking network
AUM
Belgium 24 bn
CEE 3 bn
Luxemburg
Switzerland 18 bn
Monaco
Spain 12 bn
Germany 5 bn
Netherlands 3 bn
United Kingdom 3 bn
France 1 bn
Italy 0.4 bn
Total 69 bn

Of which 7 bn in low-yielding assets

14
Solid financial track record
Combined ratio, non-life
Cost/income, banking
In m EUR
Return on equity
Net profit growth
In m EUR
Pro forma figures, KBC Group (2003 figures are
according to B-GAAP)
15
Foto gebouw
2
Strategy and earnings drivers
16
Start of a new decade

• In Q1 2005, KBC merged with parent company
  Almanij
• Quick wins for shareholders included
• The re-rating of the KBC share due to increased
  transparency, visibility and share liquidity
  (analysts previously used a 10-15 discount)
• Operational synergies, particularly in the field
  of wealth management (programme of 75 m
  recurring pre-tax result, of which ½ as from
  2006)
• Further value-creating potential includes
• Shifting the earnings trend in the private
  banking area into much higher gear (earnings
  growth to be doubled from 5 to at least 10
  CAGR)
• Moreover, KBC continues to be ambitious,
  maintaining its performance commitments in both
  Belgium and CEE

17
We build a solid future

• Strategy headlines include
• Retail- and wealth-management-oriented, with
  focus on Belgium and CEE-5 and selected Western
  European markets
• Further enhancement of efficiency (with emphasis
  on - but not exclusively in - CEE and European
  private banking)
• Standalone basis (opportunistic operational
  alliances in certain areas to generate economies
  of scale, if needed)
• Steady dividend growth and solid level of
  financial strength/solvency
• The solid growth and value outlook is reflected
  in ambitious financial targets, valid until 2008

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
18
Earnings drivers in Belgium - overview
Do not underestimate the market
KBC Group is well positioned

• Consolidated banking market (80 of assets held
  by top-4 players)
• 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
• Fee rates for retail banking services only 50 of
  European average (gradual increase expected)
• Credit quality has proven to be solid over the
  cycle

• Top-3 market position, esp. strong in Northern
  region (one of the wealthiest regions in the EU)
• Of the top players, level of customer
  satisfaction is highest
• Innovative product offering in retail AM
  (steadily increasing market share over the past
  10 yrs.)
• Still high cross-selling potential for non-life
  products and well-performing bancassurance
  distribution model
• Further cost efficiency improvement potential,
  among other things, via co-sourcing of back
  offices with other banks
• Well-diversified revenue structure (50 fee
  income) and further increase in fee income
  targeted

19
Earning drivers in CEE - overview
Strong market growth momentum
KBC Group is well positioned

• Nom. GDP growth in 2005/06 at 6.3. Although
  prospects have been revised due to global
  economic slowdown, growth will still outgrow EMU
  by 3.1
• Ongoing catch-up in product penetration
  (currently, an avg. of 45 for banking accounts
  and 5 for mortgages)
• Mortgage volumes growing at double-digit pace (up
  51 on avg. in 2004)
• 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 (excl. banking in Poland) with
  nationwide branch networks
• Competitive advantage in enhancing cross-selling
  of asset management and insurance products
• Well positioned in HNWI and private banking
  through epb know-how
• C/I still on the high side overall, inducing
  further improvement, e.g., by setting up
  cross-border platforms for processing
  transactions
• Adequately provisioned balance sheet (risks under
  control)
• Availability of capital within the Group

20
Strong growth fundamentals in CEE
Financial services (banking insurance) in of
GDP (2004)
(Source Vienna Institute for International
Economic Studies)
21
Bancassurance fueling CEE earnings
Results are encouraging

• Now the model is in place
• Transfer of product 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

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
22
Growth in AM fueling CEE earnings

• KBC is well positioned
• Strong appetite for risk-free investments in
  the market (money-market, capital-guaranteed
  funds), fully in line with KBCs core
  competencies and successful track record in
  Belgium
• Cost/AUM below average (around 16 bps vs. 20 bps
  for Europe)
• competitive advantage relative to other CEE
  players

• Results are encouraging
• AUM grew in 04 by 25. Continued high growth
  expected in coming years (CAGR of 15-20 in
  mutual funds and 10-15 in pension products)
• Via the funds business, new customers are
  recruited. Existing customers using deposits to
  buy funds replenish 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
23
Centralized processes reducing costs

• Example 1 card transactions
• Centralized purchasing processing of
• 7.5 million cards
• 500 million transactions
• Reduced costs driven by
• Standardized technology anticipating future
  developments (SEPA)
• Economies of scale

• Example 2 cross-border payments
• Centralized processing of cross-border
  transactions (also open for third-parties)
• Reduced costs driven by
• Standardized technology anticipating future
  developments (SEPA)
• Economies of scale

cost/trans.
0.12
0.10
100
0.08
90
0.06
80
0.04
0.02
0.00
-

500
1 000
1 500
2 000
2 500
million transactions
24
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
25
Private banking in higher gear
Core business an integrated private banking
business in selected European markets focusing on
clients with gt1m of investable assets

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

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

• Small today (2 bn AUM), but high 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
• No expansion, except in IFAs with short payback

Opportunistic acquisitions may imply investments
of 150-250 m per year
26
Private banking in higher gear
Changing market environment
KBC Group is well positioned

• Strong relationship-based approach, open
  architecture concept, KBC AMs sound product
  expertise and solid capability for tailor-made
  solutions
• Greatly improved efficiency (implementation of
  large scale rationalization programme), to be
  further boosted by the realization of merger
  synergies within the enlarged KBC Group
• Leveraging the network in Belgium
• Local private banking brands with status/heritage
  in Germany, Spain, Netherlands, UK and Belgium
• Unique model attracting experienced private
  bankers from big banks

• Shift in customer preference towards greater
  sophistication open architecture, alternative
  investments, financial planning, accessibility
  and Internet delivery
• However, the core needs of customers will remain
  the same (trusted personal relationships,
  status/exclusivity, investment performance)

27
Operational synergies in private banking
The merger of KBC and Almanij allows to realise
synergies by reducing costs and cross
selling.The total benefit amounts to 75 m euro
(pre-tax) per year as of 2009 (50 to be realised
as of 2006).
Type of benefits
Source of benefits
m
Securities
m
Payments
Securities
Revenue(40)
Fin. Markets
Corporate
Insurance
Asset Management
Cost (60)
ICT Overheads
Cross sales
Newbusiness
Pro-cure-ment
People
Costsavoided
Total
Optimi-zation
Synergy benefits defined as peak recurring
annual increase in pre-tax bottom-line result
(2009 - peak level)
28
Private banking, financial projections
In total, KBC Group projects 10 net income
growth per year until 2008
KBC Group Forecasts KBC Group Forecasts KBC Group Forecasts KBC Group Forecasts
2004 2004 2008 Forecasts
AUA (bn) KBL EPB 44
KBC PB 14
Total 58 83
2004 2004 2008 Forecasts
Net Income (bn) KBL EPB 205
KBC PB 50
Total 255 380
Cost Income Ratio 67 55
AUA Growth AUA Growth AUA Growth
Belgium CAGR 14
Onshore W. Europe CAGR 10
Offshore W. Europe CAGR 0
CEE CAGR 15
Total AUA Growth CAGR 9
Net Income Growth
CAGR 10
Excluding any future acquisitions
This assumes normal market conditions
29
Foto gebouw
3
1H 2005Financial highlights
30
Financial highlights - At a glance - Group
financial performance - Headlines per segment FY
2005 profit outlook
Foto gebouw
31
1H 2005 at a glance

• Net profit at 1 253 m, up 55 y/y, generating a
  return on equity of 20
• Underlying profit (excl. one-offs) growing at 34
• Comparison of individual P/L lines with pro forma
  2004 figures distorted by application of IFRS
  32/39 and IFRS 4 as of 2005
• Strong business volume growth (deposits / loans /
  AUM / insurance) generating strong commission
  income (23) and offsetting impact of flattening
  yield curve on net interest income
• AUM reaching the 170 bn EUR level (o/w 69 bn in
  private banking)
• Further downtrend in expenses - cost/income ratio
  (banking) at 57
• Sustained low combined ratio, non-life (94)
• Very low credit-risk provisioning (loan-loss
  ratio at 0.06)
• High levels of return in most business segments,
  especially in Belgian retail (29) and in CEE
  (54)
• Outlook for 2005 remains positive

32
Solid business growth
30 June 2005 Customer loans o/w mortgages Customer deposits(banking) Life deposits(insurance) AUM(asset management)
Outstanding 108.7 bn 30.7 bn 167.8 bn 14.9 bn 170.5 bn
Growth, Ytd 7 10 7 11 11
Belgium 7 8 5 10 15
CEE 3 16 15 15 20
Rest of world 7 15 7 - 5
Note Growth trend, excl. (reverse) repo
activity, from 31-Dec-04 to 30-Jun-05
33
Profit trend, 1H 05
1H 2004pro forma 1H 2005 1H/1H 1H/1Hexcl. one-offs
Gross income, net of technical insur. charges 3 919 4 163 6 2
Expenses -2 373 -2 313 -3 -6
Operating result 1 545 1 850 20 15
Impairments -242 -57 -76 -76
Associated companies -39 33 - -27
Net profit 810 1 253 55 34
C/I, bankingCR, non-lifeROE 619314 579420

• Notes
• One-offs include the disinvestment loss at Agfa
  Gevaert (net bottom-line impact of 80 m) in Q2
  2004, the write-back of of provisions for
  operating expenses after a legal settlement (net
  48m) in Q2 2004, the income related to the
  settlement of a historic Slovakian loan (net
  68 m) in Q1 2005, the non-recurring value
  gains on shares of Irish insurer FBD (net 68m)
  in Q1 2005 and merger-related expenses (net 13m)
  in Q2 2005
• All 2004 figures exclude impact of IAS 32/39 and
  IFRS 4

34
Profit trend, Q2 05
2Q 04 1Q 05 2Q 05 2Q/2Q 2Q/1Q
Gross income, net of tech. charges 1 917 2 127 2 035
Expenses -1 105 -1 104 -1 209
Operating result 812 1 024 826 2 -19

Operating result, underlying 739 851 846 15 -1
Impairments -90 -15 -42
Associated companies -60 21 13
Net profit 434 717 536 24 -25

Net profit, underlying 465 581 550 18 -5

• Notes
• One-offs include the disinvestment loss at Agfa
  Gevaert (net bottom-line impact of -80m) in Q2
  2004, the write-back of of provisions for
  operating expenses after a legal settlement (net
  48m) in Q2 2004, the income related to the
  settlement of a historic Slovakian loan (net
  68 m) in Q1 2005, the non-recurring value
  gains on shares of Irish insurer FBD (net 68m)
  in Q1 2005 and merger-related expenses (net 13m)
  in Q2 2005
• All 2004 figures exclude impact of IAS 32/39 and
  IFRS 4

35
Financial highlights - At a glance - Group
financial performance - Financial headlines per
segment FY 2005 profit outlook
Foto gebouw
36
Solid revenue trend

• IFRS reclassfications distort comparison with
  2004 (among other things, non-recognition of
  unit-linked insurance premiums)
• Q1s solid trends continued in Q2
• NII volume growth almost offsetting q/q NIM
  contraction
• High level of life insurance premium income (1.2
  bn - mostly unit-linked, in line with stock
  market performance)
• Strong commission line (410 m)

• Down 693 m y/y, mainly due to non-recognition of
  1.1 bn new unit-linked premium volume under IFRS
  2005
• Apart from one-offs (136 m in Q1), solid revenue
  quality
• NII volume growth almost offsetting negative
  impact on NIM from flattening yield curve (-13
  bps)
• High level of life insurance premium income (2
  bn)
• Strong commission line (23)

37
NII trend, banking activities
1H 05 (y/y trend)
38
Impact of IFRS on NII / FV income
1H 05 IFRS, as reported
1H 04 1H 05
NII 1 961 2 122 8
FV income 415 225 -46
Total 2 376 2 348 -1

• Main impact from IFRS
• Reclassification of interest income on hedging
  derivatives from NIM to FV income (? 175m)
• Negative impact of FV adjustments on financial
  instruments (-70m)

1H 05, adjusted for comparison
1H 04 1H 05
NII 1 961 1 947 -1
FV income 415 470 13
Total 2 376 2 417 2
Remark simplified - only the mentioned main
IFRS-adjustments are used
39
Impact of IFRS on Life income
1H 05 IFRS, as reported
1H 04 1H 05
Premium income, life 1 910 892 -53
Fees, investments w/o DPF - 32 -
Technical charges, life -1 945 -983 -49
Financial income 160 259 62
Total 123 197 61

• No recognition of premium income and technical
  charges of investments contracts without
  Discretionary Participationt Feature (mostly
  unit-linked life products)
• Margin recognized as fee/commission income
• Remark no bottom-line impact !

1H 05, adjusted for comparison
1H 04 1H 05
Premium income, life 1 910 1 963 3
Fees, investments w/o DPF - - -
Technical charges, life -1 945 -2 025 4
Financial income 160 259 62
Total 123 197 61
40
Competitive landscape in Belgium
Net Interest Margin, KBC Bank, Belgium
Spreads on new mortgages (bps), KBC, Belgium
0.88
0.76
0.48
0.41

• In 1H 05, NIM was stable y/y at 2.0 .
• In Q4 04 and Q1 05 the (obviously lagging) effect
  of the flattening of the yield curve was offset
  by the improved product mix (shift to
  low-yielding liquid savings deposits in
  anticipation of an interest rate hike). In Q2 05,
  customers switched to long-term investments,
  anticipating deposit rate cuts (-25 bps as of Q3
  03).
• Volume growth (deposits/loans) was strong in
  Belgium, further boosting NII
• Since mid-2004, credit spreads have seen a
  significant deterioriation as a result of
  increased price competition. Currently, pricing
  rationality is tending to be restored.

41
Competitive landscape in Belgium
Change in retail market share since the beginning
of 2004 (avg. deposits and loans), proxy
Source Febelfin (market sample)Includes
consumer loans, mortgages, saving accounts and
saving certificates

• In 2004, the large banks, representing gt80 of
  the market, lost roughly 1 market share to the
  benefit of smaller players. But from 1H05, this
  trend seems to be on the wane.
• KBC has been able to keep its market share stable
  (and may have further increased its market share
  in unit-linked insurance and probably mutual
  funds).

42
Sustained favourable y/y cost trend
-3

• As expected, cost level up q/q due to
• Elimination in Q2 of underusage of IT and
  marketing budgets of ca. 20m in Q1 (time lag)
• Higher income-related staff costs (? 27 m esp. at
  KBC Financial Products)
• Restructuring costs (20 m) and one-off
  merger-related costs (20 m)
• Y/y trend Q2 04 includes write-back (73 m) of
  provision for operating charges (after legal
  settlement)

• Ytd expenses down 3, mainly driven by (a) cost
  cutting in Belgium and (b) lower staff
  profit-sharing bonuses (esp. at KBC Financial
  Producs)
• Cost/income, banking, down from 61 to 57

43
Historic low impairment level
-76

• Impairments down 185 m (-76) on the back of
  limited credit risk and solid equity markets
• Loan-loss ratio down from 0.20 in FY 04 to 0.06
• Impairments on investments limited to 16 m versus
  130 m in 1H 04

• Q2 impairments remain at historic low
• Q2 includes 5 m impairment on goodwill at KBL
  France

LLR Avg loans FY 04 1H 05
Belgium 58.3 0.09 0.03
CZ/Slovakia 10.7 0.26 0.00
Hungary 5.4 0.64 0.93
Poland 3.9 0.69 0.00
International 40.2 0.26 0.09
Total 118.5 0.20 0.06
44
Excellent underwriting result, non-life

• Combined ratio at 94 on the back of
• Sound risk management (claims ratio at 64)
• Good cost control (expense ratio at 30)
• Favourable claims environment on all markets

• Q2 sligthly higher q/q, mainly for seasonality
  reasons

C/R FY03 FY04 1H05
Belgium 93 92 93
Czech Rep. 102 99 93
Slovakia 146 138 116
Hungary 103 98 86
Poland - 95 97
R/I 100 98 90
Total 96 95 94
45
Financial highlights - At a glance - Group
financial performance - Financial headlines per
segment FY 2005 profit outlook
Foto gebouw
46
Segment structure
KBC Group NV
KBCInsurance
KBCAM
KBL epb
Gevaert
KBCBank
Primary segmentation by business segment
47
Key points, business segments
BANKING
Net profit (in m)

• Banking
• Q2 05 result at 314 m
• Good top-line mix, commissions particularly
  strong, not boosted by gains and trading income,
  NII almost stable despite flatening yield curve
• Higher costs after the very low Q1 level (see
  above)
• Impact of one-offs in y/y and q/q comparison (see
  below)
• 1H 05 profit at record level of 784 m, driven by
• Strong commission income (21)
• Strict cost control (C/I at 57 incl. AM)
• Limited credit cost (0.06 bp)
• One-off income related to settlement of historic
  Slovakian loan (net 68 m)
• Insurance
• Q2 05 results in line with Q1 (though high gains
  in Q1), due to
• Record level of sales of life products (1.2 bn)
• High dividend income (86 m)
• Slightly better claims result
• 1H 05 results increasing to 246 m on the back of
• High sales of life insurance (2 bn euro)
• Excellent underwriting performance (CR, non-life,
  94)

784
699
564
2Q05
2Q04
4Q04
1Q04
1Q05
3Q04
Pro forma IFRS 2004
IFRS 2005
INSURANCE
246
Net profit (in m)
119
2Q05
3
4Q04
2Q04
1Q05
3Q04
1Q04
Pro forma IFRS 2004
IFRS 2005
48
Profit trend, banking segment
Impact of one-off items
Segment banking 2Q 04 1Q 05 2Q 05 2Q/2Q as stated 2Q/2Qexcl. one-offs 2Q/1Q as stated 2Q/1Qexcl.one-offs
Gross income 1 400 1 513 1 373 -2 -2 -9 -3
Expenses -816 -807 -878 8 -1 9 9
Operating result 585 706 495 -15 -3 -30 -18

Net profit 367 470 314 -14 -2 -33 -22

Net profit, underlying 319 402 314 -2 -22

• Notes
• One-offs include the write-back of of provisions
  for operating expenses after a legal settlement
  (net 48m) in Q2 2004 and the income related to
  the settlement of a historic Slovakian loan
  (net 68 m) in Q1 2005
• All 2004 figures exclude impact of IAS 32/39 and
  IFRS 4

49
Key points, business segments
ASSET MANAGEMENT

• Asset management
• AUM in 1H 05 up 16 to 97 bn (2/3 due to new
  money inflows)
• 1H 05 profit contribution at 126 m, 16 m y/y
  (driven by increased AUM)
• Note total AUM within the Group 170 bn
• Asset management segment 82 bn (3rd party) 15
  bn (group assets)
• Banking segment 24 bn (mostly private and HNWI
  assets in Belgium and CEE)
• European private banking segment 50 bn (o/w 46
  bn of private banking customers)
• European private banking
• 1H 05 profit contribution at 94 m, up 28 m y/y
  and down 12 m q/q (due to restructuring
  provisions)
• Top-line at high level (partly due to M2M of
  financial instruments) with sustained growth
  trend of commission income
• Private banking AUM in 1H 05 up 8 to 50 bn
• Cost/income at 67
• No relevant impairment charges

Net profit (in m)
126
119
109
2Q05
4Q04
2Q04
3Q04
1Q05
1Q04
Pro forma IFRS 2004
IFRS 2005
EUROPEAN PRIVATE BANKING
Net profit (in m)
94
66
8
2Q05
2Q04
1Q04
3Q04
1Q05
4Q04
Pro forma IFRS 2004
IFRS 2005
50
Key points, business segments
Net profit (in m)
GEVAERT

• Gevaert
• 1H 05 profit contribution of 63 m (remember that
  in 2Q 04, discontinued activities weighed on the
  P/L at 80 m)
• Revenue shored up, among other things, by M2M
  according to IFRS standards of private equity
  portfolio in 1Q 05 (15 m) and by gains on
  disposal of listed equity holdings in 2Q 05 (30
  m)
• 1H 05 profit contribution from Agfa-Gevaert 14
  m
• Holding company
• 1H 05 net holding company results at -59 m, quite
  high due to
• One-off costs in Q2, related to Almanij-KBC
  merger (20m) expenses for existing stock option
  plan at KBL and external advisory services
• Elimination of received dividends on own shares
  (IFRS 2005) (9 m)
• Costs of debt related to minority buy-out of KBL
• Debt funding will be gradually reduced in future

36
63
-48
2Q05
4Q04
3Q04
1Q05
1Q04
2Q04
Pro forma IFRS2004
IFRS 2005
Net profit (in m)
HOLDING COMPANY
-40
-59
-19
1Q04
3Q04
1Q05
2Q04
4Q04
2Q05
Pro forma IFRS 2004
IFRS 2005
51
Segment structure contd.
2
KBC Group NV
1
KBCInsurance
KBCAM
KBL epb
Gevaert
KBCBank
Retail
Business customers
CEE
Markets
European private banking
1 . Primary segmentation by business segment 2.
Additional breakdown by area of activity
Gevaert
52
Retail Belgium and CEE

• Retail Belgium
• Q2 somewhat lower q/q due to lower banking
  revenue (partly seasonal) and higher taxes (less
  exempted gains)
• 1H 05 net profit of 539 m, 320 m more than 1H 04
  
• sound revenue growth (esp. related to
  savings/investments and mortgages)
• sustained cost discipline (-4)
• strong non-life underwriting performance
• absence of credit provisioning and normalization
  of value impairments on the investment portfolio
  (impairments ? 148 m)
• Private banking sub-segment contributes 32m in
  1H 05
• 1H 05 ROAC at 29 (pro forma FY 04 22)
• CEE
• Q2 on same (high) level as Q1 (except 68 m
  one-off in Q1)
• 1H 05 profit contribution of 312 m - ROAC at 54
  (pro forma FY04 27)
• In CZ/Slovakia 1H 05 profit contribution of 219
  m (incl. one-off of 68 m in Q1). The negative
  effect of lower interest rates is compensated by
  higher volumes. Sound growth of insurance
  business.
• Hungary further positive trend of operating
  results, but somewhat higher loan-loss provisions
  (LLR 0.93, similar to that of major peer). 1H 05
  profit at 20 m.
• Poland 1H 05 profit contribution of 62 m, (incl.
  deferred taxes of 9 m in Q2) due to sound cost
  trend, growing insurance business and absence of
  loan losses)

RETAIL BELGIUM
Net profit (in m)
539
435
2Q05
219
2Q04
4Q04
1Q05
1Q04
3Q04
Pro forma
CEE
Net profit (in m)
312
164
2Q05
126
4Q04
2Q04
3Q04
1Q04
1Q05
Pro forma
53
SME and wholesale activities
Net profit (in m)

• SME/corporate
• Strong profitability trend of 2004 continues as a
  result of
• Low credit provisions (LLR 1H 05 0.21)
• High cost efficiency (C/I 36)
• Solid technical result from reinsurance (C/R 90)
• 2nd quarter profit level slightly lower than
  average of previous quarters due to lower revenue
  and higher taxes
• 1H 05 ROAC at 20 (pro forma FY04 19)
• Capital markets
• 2Q 05 profit contribution continues to be at
  level registered in previous quarter, but below
  record high of 1H 04 (when exceptionally fine
  results were booked in derivatives)
• 1H 05 earnings amounts to 106 m (-23 y/y).
  Income from convertibles equity derivatives
  trading was particular weak. Equity brokerage and
  structured credit business brought about a result
  improvement.
• 1H 05 ROAC at 28 (pro forma FY 04 34)

SME/CORPORATE
225
226
204
2Q05
2Q04
4Q04
1Q05
1Q04
3Q04
Pro forma
CAPITAL MARKETS
Net profit (in m)
137
106
96
2Q04
2Q05
4Q04
1Q05
1Q04
3Q04
Pro forma
54
Financial highlights - At a glance - Group
financial performance - Financial headlines per
segment FY 2005 profit outlook
Foto gebouw
55
2005 profit outlook

• KBC continues to be positive on its strategy in
  the various business lines
• Banking costs are expected to decrease in 2005
• There are no signs of any substantial decline in
  credit quality or in underwriting performance,
  non-life
• The interest rate and stock market environments
  remain factors of uncertainty
• KBC has already set a mid-term objective of gt10
  CAGR EPS growth
• 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

56
Financial highlights - At a glance - Group
financial performance - Financial headlines per
segment FY 2005 profit outlook Additional
information
Foto gebouw
57
Solid business growth
Customer loans o/w mortgages Customer deposits Life deposits AUM(off-balance)
Outstanding (in bn) 108.7 30.7 167.8 14.9 170.5
Growth, 2Q 05 3 6 3 7 4
Belgium 4 4 2 7 5
CEE - CZ/Slovakia - Hungary - Poland 4530 98125 566-5 832716 12102412
Rest of the world 1 9 4 - 0
Growth, Ytd 7 10 7 11 11
Belgium 7 8 5 10 15
CEE - CZ/Slovakia - Hungary - Poland 364-4 1615227 152110-3 1512468 202268-4
Rest of the world 7 15 7 - 5
Note growth trend excl. (reverse) repo activity
58
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
59
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 (- techn. ch.)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
60
Group income statement, 2Q 2005
(in m euros) Banking Insurance AM KBLepb 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 91004951628474 13697876938-6710 -10440961 410538191069 002-634026 -1400-300130 1 0749781359297410118
Gross income 1 373 1 180 105 217 56 112 2 904
Operating expensesImpairments - o/w on loans and receivables - o/w on AFS assetsGross technical charges, insuranceCeded reinsurance resultShare in results, associated comp. -878-36-382006 -131-40-4-852-170 -15000000 -153-4-11001 -22211006 -149000000 -1 209-42-380-852-1713
Profit before taxes 465 176 90 60 42 -37 797
Income tax expense Minority interests -109-42 -48-4 -220 -18-1 -110 -40 -212-48
Net profit 314 124 68 41 31 -41 536
61
Areas of activity overview, 2Q 2005
(in m euros) Retail CEE SME/Corp. Markets KBLepb Gevaert Total
Banking and AM (incl. KBL)
Gross incomeOperating expensesImparimentsIncome tax expenseMinority interestsNet profit group share 629-363-6-910170 403-273-2-11-16101 250-89-21-45095 235-142-2-38053 218-155-4-18-141 1 696- 1 048-40-149-42422
Insurance
Gross income - tecbn. ch. Operating expensesImpairmentsIncome tax expenseMinority interestsNet profit group share 159-82-3-35074 70-420-4-419 22-70-806 313-131-4-48-4124
Holding Co
Net profit group share 31 -10
Group total
Net profit Group share 244 121 101 53 41 31 536
Excl. non-allocated results
62
Group earnings, quarter by quarter
(in m euros) 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05
Net interest incomeGross earned premium, insuranceDividend incomeNet gains from FI at FV Net realised gains from AFS assetsNet fee and commission incomeOther income 9951 27525224193357106 9661 40412119160324113 9109013912393323128 9631 57746187157399132 1 04872934133168429215 1 0749781359297410118
Gross income 3 175 3 178 2 517 3 462 2 756 2 904
Operating expensesImpairments - o/w on loans and receivables - o/w on AFS assetsGross technical charges, insuranceCeded reinsurance resultShare in results, associated companies -1 269-152-33-119- 1 169-520 - 1 105-90-74 -12-1 240-22-60 -1 147-44-15-18-771-1234 -1 424-79-76-2-1 454-2928 -1 104-153-16-612-1721 -1 209-42-380-852-1713
Profit before taxes 602 662 577 504 1 030 797
Income tax expense Minority interests -170-55 -177-51 -155-57 -35-29 -256-57 -212-48
Net profit 376 434 365 440 717 536
63
CEE, company overview
CEE
1H 2005 (in m EUR)
CSOB
KH
KB
NLB
Insurance
547 207 149 12 131 Gross income
-265 -142 -113 -83 General expenses
6 -25 12 -1 Impairments
-61 10 9 -10 Taxes
227 30 57 38 Standalone profit
7 -6 -4 -1 Adjustments, o/w elimination of yield on excess capital, etc
-24 -10 -8 -7 Minority interests
210 15 45 12 30 Profit contributionto Group
83 17 42 31 Return on allocated capital
64
CEE banking - I/S details, 1H 2005
1H 2005 CSOB KB KH NLB
Statutory accounts Net interest incomeDividend incomeNet gains from financial instruments at fair valueNet realised gains from available for sale assetsNet fee and commission incomeOther income 252 1975 63144 8666 496114 291123 249 101 62918417 312-1 14822 6488 659 107 76712750 139-19142 9186 490
Gross income 546 730 149 283 207 251
Operating expensesImpairmentsShare in result of associated companiesTaxes -265 0166 1690-60 971 -113 08212 143988 618 -142 048-25 1781 369-10 989
Net statutory profit 226 911 57 061 30 405
Profit contibution to Group Net statutory profitConsolidation adjustmentsResults of capital allocationMinority interests 226 91118 758-11 586-23 609 57 061-949-3 295-7 644 30 405-940-4 870-9 971
Profit contribution, Group shareROACROI 210 4748326 45 1724214 14 6241711 11 731
65
CEE banking - I/S details, 2Q 2005
2Q 2005 CSOB KB KH NLB
Statutory accounts Net interest incomeDividend incomeNet gains from financial instruments at fair valueNet realised gains from available for sale assetsNet fee and commission incomeOther income 128 3132 11825 9552 17756 5988 801 51 2161845 803-2 6116 4215 298 54 29011424 864-14118 3383 845
Gross income 223 961 66 311 101 309
Operating expensesImpairmentsShare in result of associated companiesTaxes -142 6221 5970- 7 434 -53 72412 11809 950 -73 645-15 5090633
Net statutory profit 75 502 34 174 9 559
Profit contibution to Group Net statutory profitConsolidation adjustmentsResults of capital allocationMinority interests 75 502-299- 6 377-6 106 34 174- 440-1 267-4 406 9 559-443-213- 1 695
Profit contribution, Group share 62 721 28 060 7 208 3 308
66
No. of shares outstanding
BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions) BASIC NUMBER OF SHARES (in millions)
Ordinary shares Mandatory convertibles Treasury shares Basic No.of shares Avg. quarter Average Ytd
31/12/03 367.7 2. 6 -11.0 359.4 - -
31/03/04 367.0 2. 6 -10.1 359.6 359.5 359.5
30/06/04 366.3 2. 6 -9.7 359.2 359.4 359.5
30/09/04 366.3 2. 6 -9.5 359.4 359.3 359.4
31/12/04 366.4 2. 6 -9. 6 359.5 359.5 359.4
31/03/05 366. 4 2. 6 -12.6 356.5 358.0 358.0
30/06/05 366. 4 2. 6 -9.1 360.0 358.3 358.1
DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions) DILUTIVE NUMBER OF SHARES (in millions)
Basic No. of shares Stock options Convertible bonds Dilutive No. of shares Avg. quarter Average Ytd
31/12/03 359.4 6.1 5.2 370.7 - -
31/03/04 359.6 6.1 5.2 370.9 370.8 370.8
30/06/04 359.2 6.0 5.2 370.5 370.7 370.8
30/09/04 359.5 5.8 5.2 370.5 370.5 370.7
31/12/04 359.5 5.0 5.2 369.7 370.1 370.5
31/03/05 356.5 5.0 5.2 366.7 368.2 368.2
30/06/05 360.0 4.0 5.2 369.3 368.0 368.1
Net profit 1H 05 (in m) 1 253
Basic number of shares 358 122 942
Dilutive number of shares 368 084 650
Basic EPS (in euros) 3.50
Dilutive EPS (in euros) 3.42
67
Foto gebouw
4
Information on capital management
68
Capital position
Capital position Capital position Capital position Capital position
Available capital 1 Surplus capital 2 Immediatefree surplus 3
Banking 10.7 bn 2.1 bn 1.5 bn
Insurance 2.8 bn 1.2 bn 0.4 bn
Gevaert 1.2 bn 1.0 bn 0.4 bn
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
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-Mar-05 2
Difference between available capital and internal
minimum level 3 Surplus capital excl. expected
adverse IFRS impact on Tier-1, banking (as of
2006), unrealized gains on tied-up assets
(insurance) and value of Agfa-Gevaert (timing of
disposal uncertain)
69
Foto gebouw
5
Closing remarks on valuation
70
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)
71
Analysts recommendations