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
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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

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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

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Mid-term financial outlook CEE
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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
14 Belgium 15 CEE 0 offshore and 10 W.
Eur. onshore
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Topic 4 valuing excess capital

• 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

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Foto gebouw
Appendices
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Market cap ranking in Euroland
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
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Group income statement 1H 2005
Excl. intrasegment eliminations
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Areas of activity overview 1H 2005
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 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.