KBC Bank

1
KBCBank Insurance Group

• First Half Year Results 2001

3 September 2001
2
KBC Bank Insurance Group

• Group results and key features
• Results - Banking
• Results - Insurance
• Activities
• Retail bancassurance
• Corporate services
• Central Europe
• Market activities
• Asset management
• Outlook

3
KBC Bank Insurance GroupKey Figures
30-6-01
?
In millions of EUR
30-6-00
Consolidated profit - Group share (1) -
Banking - Insurance - Holding company Key
figures per share (in EUR) - Net earnings -
Net asset value
631.2 494.6 147.9 -11.3 2.11 35.2
585.2 442.4 169.9 -27.1 1.95 35.3

-7.3 -10.614.9 - -7.60.3
(2)
(1) figures over 2000 excl. capital gain on
CCF(2) as per 31.12.00
4
KBC Bank Insurance GroupNet Profit
In m EUR
-7.3
5
KBC Bank Insurance Group1st Half 2001 Key
elements

• Core businesses deliver good revenues
• Interest income 13.2
• Non-life premiums 7.1
• Slight increase of marketshares versus dec. 2000
• Lending 23.1 ( 0.9 pt)
• Saving deposits 19.5 ( 0.1 pt)
• Mutual funds 29.8 ( 0.6 pt)
• Asset quality remains goodNon-performing loans
  stable at 2.2
• Assets under management 3 bn EUR
• Development of Central Europe on track
• Sustained solid solvency ratios

6
KBC Bank Insurance Group1st Half 2001 Key
elements

• Unfavourable market conditions have negative
  impact on volatile revenue components
• trading result -14.7
• commission income from securities -1.3
• unit linked premium income -19.0
• Cost performance in banking still unsatisfactory
  (18.1 )
• merger related savings still limited
• deterioration of cost / income ratio due to
  slower growth of revenues

7
KBC Bank Insurance GroupProfitability
87.7
1821 incl. CCF
20.2
21.6
In millions of EUR
12.8
37.2
-7.3
27.3
23.3
20.1
20.5
16.1
8
KBC Bank Insurance GroupEfficiency Ratios
30-06-00
31-12-00
30-06-01
Cost / Income ratio Non-life Net cost ratio
Net loss ratio (total) Net loss ratio
(direct business) Combined ratio
59.3 32.1 73.6 68.5 105.7
70.2 32.2 71.9 67.0 104.1
66.5 64.2 () 34.0 72.6 67.7
106.6
() excl. impact change in consolidation scope
9
KBC Bank Insurance GroupSustained solid
solvency ratios
2000
1998
1999
30-6-01

• Bank
• Tier-1 ratio
• CAD ratio
• Insurance
• Solvency ratio ()

9.5 16.0 307
7.4 12.8 298
8.6 14.8 314
7.2 11.5 311
() excluding unrealized capital gains
10
KBC Bank Insurance GroupOverall financial
targets
Target
Realized 30 June 01
ROE at group level EPS growth Cost/income ratio
bank Combined ratio insurer min. Tier-1 ratio
bank min. CAD ratio bank min. Solvency ratio
insurer
22 15 (1) 55 (2) 103 (2) 7 11 200
20.1 -7.6 70.2 104.1 8.6 14.8 314.0
(1) average over the period 2000-2004 (2) by 2004
11
KBC Bank Insurance Group

• Group results and key features
• Results - Banking
• Results - Insurance
• Activities
• Retail bancassurance
• Corporate services
• Central Europe
• Market activities
• Asset management
• Outlook

12
BankingSummary
In millions of EUR
?
30-6-01
30-6-00
Gross operating incomeGeneral admin.
expenses Operating result Value adjustments
and provisionsExtraordinary result Profit
before tax Taxes Minority interests Profit after
tax
2380 -1411 969 -274 (1) 0 695 -128 -73 4
94 (2)
2372-1666 706 -11592 683 -155 -86 442
-0.318.1 -27.1 -58.0- -1.7 21.2 17.8 -10.5
(1) incl. allocation to FGBR of 118 m EUR(2)
excl. capital gain on CCF
13
BankingIncome Stream
Total 4656
Total 3868
349
Total 3435
319
1034
Total 2380
Total 2372
-0.3
133
756
610
836
13.1
In millions of EUR
636
732
268
237
-3.7
514
495
-27.3
423
581
2437
2157
1960
13.2
1186
1048
1998
1999
2000
30-6-00
30-6-01
of total income
1999 2000 30-6-00 30-6-01
Other income Commission income
Profit on financial transactions
Net interest income (incl.
dividends)
8 20 16 56
11 21 18 50
8 22 18 52
10 22 24 44
14
BankingExpenses KBC Belgium
In millions of EUR
30-6-01
?
30-6-00
Personnel costs Other admin. expenses Total
527.0 272.9 799.9
482.1 280.9 763.0
9.3 -2.9 4.8

• Impact
• Traditional elements 28.5 m EUR
  (inflation, promotions, etc)
• Profit related wage component 6.5 m EUR
• One-off elements 20.0 m EUR

15
BankingExpenses other group companies
In millions of EUR
30-6-01
?
30-6-00
Personnel costs Other admin. expenses Total
Excl. impact acquisitions
390.6 302.4 693.0 554.0
304.8 196.5 501.3 501.3
28 54 3810.5

• Impact
• acquisitions 139 m EUR (IPB, Peel Hunt,
  Patria)
• KBC FP and KBC Sec. France 37 m EUR
  (increase nr. of personnel with 96 FTE or
  21 )

16
BankingProvisioning for credit risks
In millions of EUR
2000
1999
30-6-01
30-6-00
Specific provisions Domestic International Loan
loss ratio Domestic International Non
performing loans Other general provisions for
credit risks
283.7 253.030.7 0.530.09 2.1 -42.4
270.4 103.2167.1 0.240.48 2.1 71.2
77.0 46.530.6 0.220.23 2.0 3.1
62.1 42.919.3 0.180.12 2.2 20.0
Asset quality remains good
17
KBC Bank Insurance Group

• Group results and key features
• Results - Banking
• Results - Insurance
• Activities
• Retail bancassurance
• Corporate services
• Central Europe
• Market activities
• Asset management
• Outlook

18
InsuranceSummary
In millions of EUR
30-6-01
30-6-00
?
Non-life premium incomeLife premium income
Net technical charges ()Investment income ()
Total gross margin General expenses Operating
result Non-recurring result Profit before tax
Taxes Minority interests Profit after tax
413915-1248316 396 -205 191 13 203 -33 0 170
3861064-1382304 372 -192 180 9 188 -37 -3 148
7.1-14.0-9.73.9 6.4 6.4 6.4 42.9 8.1
-9.7 - 14.9
() excl. impact value changes unit-linked
products
19
Insurance Evolution of gross premiums
20
InsuranceBusiness mix
30-6-00 Gross premiums 1481 million EUR
30-6-01 Gross premiums 1361 million EUR
group life 3
group life 4
other non-life 8
other non-life13
fire 6
fire 7
accepted business 7
accepted business 8
motor 9
motor 10
individuallife 68
individuallife 63
21
InsuranceContribution to recurring result
Total 371
Total 312
Total 236
86
Total 190
Total 178
67
6.4
18
124
In millions of EUR
128
32.6
57
117
43
-24.9
44
59
161
15.8
117
101
90
77
1998
1999
2000
30-6-00
30-6-01
of total recurring result 1999 2000
30-6-00 30-6-01
21 26 53
22 41 37
23 34 43
24 33 43
Non-technical Non-life
Life

22
InsuranceNon recurring result
In millions of EUR as per 30.06.01
Non recurring realized gains Allocation to
provision for financial risks Non recurring result
69.6 56.8 12.8
23
KBC Bank Insurance Group

• Group results and key features
• Results - Banking
• Results - Insurance
• Activities
• Retail bancassurance
• Corporate services
• Market activities
• Central Europe
• Asset management
• Outlook

24
Profit Contribution by Activity
227
-13.7
30-6-00 631.2 m EUR
30-6-01 585.2 m EUR
196
149
-3.5
In millions of EUR
120
116
30.5
-51.7
279
81
-12.6
72
72
62
55
49
19
profit contribution
36 34
19 20
24 12
3 12
9 8
10 14
Retailbancassurance
CentralEurope
Corporateservices
Assetmanagement
Marketactivities
Groupitems
25
Revenues and Capital Allocation per activity
Revenues
CapitalAllocation
Groupitems0.1
Groupitems13.9
MarketActivities12.3
MarketActivities13.5
Asset Manage-ment --
Retailbanc-assurance 39.1
Retailbanc-assurance 33.5
Asset Manage-ment 8.3
Corporate services 33.3
Corporateservices19.8
CentralEurope12.3
CentralEurope13.9
As per 30.6.2001
26
Retail Bancassurance
Financial highlights

• Merger of bank branches on track
• retail branches reduced from 1272 end 2000 to
  1217 mid 2001
• goal 850 by end 2003 / early 2004
• Conversion and integration at insurance company
  as planned
• Banking market shares(1) on the rise (v.12/00)
• Consumer credit
• Home loans
• Saving deposits
• Saving certificates
• Positive evolution of cross selling
• Continued success of electronic banking

Profit contribution (in m Eur) 30-6-2000
227 30-6-2001 196 Share
in Group profit 30-6-2000 36.0
30-6-2001 33.5 Return on equity
30-6-2000 20.9 30-6-2001 17.0
26.5 25.5 19.5 18.1
0.7 pts 0.4 pts 0.1 pts 0.2 pts
(1) KBC estimates
27
Retail Bancassurance in BelgiumCross-selling
penetration
Total clients bank 1 331 242
Total clients insurance 741 010
548 401 mutual clients

• Cross-selling
• 548 401 clients holding at least 1 bank AND 1
  insurance product
• 2.9 versus 31.12.2000
• 36 of overall client base
• 166 322 clients holding at least 3 bank AND 3
  insurance products
• 5.7 versus 31.12.2000
• 10.9 of overall client base

28
Continued success of electronic banking

• 71.4 ( 2.1 pt ) of payment transactions via
  electronic channels
• 150 000 ( 76 ) active subscribers to KBC
  Internet PC Banking

() versus December 2000
29
Corporate services
Financial highlights

• Strategic reduction of risk weighted assets
  started (-8,5 or -3,9 bn EUR)
• Continued rationalization of international
  network
• scaling down of multinational relationships for
  focus on mid-caps
• closure of branch in Frankfurt
• regrouping of corporate branches at KBC
  Nederland
• improved relationship management by creation of
  network desks
• Increase in domestic market share (1) in lending
• end 2000 20.7
• mid 2001 21.9
• slight increase in corporate lending in Belgium
  (4.4)

Profit contribution (in m Eur) 30-6-2000
120 30-6-2001 116 Share
in Group profit 30-6-2000 19.0
30-6-2001 19.8 Return on equity
30-6-2000 12.0 30-6-2001 11.4
(1) KBC estimates
30
Market activities
Financial highlights

• Strong performance of dealing rooms
  abroad
• restructuring process
• favourable interest rate positions
• Stable profit for dealing room in Brussels
• Weakness of stock markets reflected in
  results of equity-subsidiaries KBC
  Securities (-89 ) and KBC Financial
  Products (-69 )
• Peel Hunt
• bid successfully wrapped up
• perfect fit into European corporate
  platform for small- and mid-caps
• profit contribution slightly positive (2.5 m
  EUR)

Profit contribution (in m Eur) 30-6-2000
149 30-6-2001 72 Share
in Group profit 30-6-2000 23.6
30-6-2001 12.3 Return on equity
30-6-2000 40.6 30-6-2001 17.9
31
Central Europe (1)
Financial highlights

• CSOB becomes one of the premier financial groups
  in Central Europe since take-over of IPB
• market shares ca. 20-25 in Czech Rep. (1) and
  6 in Slovakia
• 3.4 million customers
• integration process on track
• staff levels reduced by ca. 6 in 1H 2001
• KH Bank and ABN Amro Magyar merged on 1July 2001
• new KH Bank becomes second bank in Hungary
  
• market share around 14
• almost 600 000 clients
• staff levels reduced by ca. 12 in 1H 2001
• Request to move to majority stake in Kredyt Bank
  (Poland)

Profit contribution (in m Eur) 30-6-2000
19 30-6-2001 72 Share in
Group profit 30-6-2000 3.0
30-6-2001 12.3 Return on equity
30-6-2000 6.4 30-6-2001 17.8
(1) Including all assets and liabilities of IPB
32
Central Europe (2)
Financial highlights

• Central European Insurance activities also
  progressing
• stake in CSOB Pojistovna raised from 75.8 to
  100
• market shares (2) 0.5 in Czech Rep., 3.5
  in Hungary and 13 in Poland
• Bancassurance on track in Central Europe
• co-operation started between Argosz, KH Life
  and KH Bank
• agreement signed between Warta and Kredyt Bank

Profit contribution (in m Eur) 30-6-2000
19 30-6-2001 72 Share in
Group profit 30-6-2000 3.0
30-6-2001 12.3 Return on equity
30-6-2000 6.4 30-6-2001 17.8
(2) KBC estimates
33
Asset Management

• Increase in assets under management,
  notwithstanding difficult market conditions
• 4,3 rise in 1H 2001
• volume increase (3.7 bn EUR) more than
  compensates value decrease (- 0.7 bn EUR)
• Largest Belgian player as to mutual funds
• market share from 29.2 end 2000 to 29.8
  mid 2001
• 50 market share in capital guaranteed
  funds
• Continued launch of new investment funds
  during 1H 2001
• 55 new funds in Belgium
• 2 new CSOB-funds in Czech Republic
• focus on capital-guaranteed funds
• Continued innovation in funds
• KBC Private Equity Fund Biotech
• KBC Click Solidarity 1 Kom op tegen Kanker
• Hedge Fund

Financial highlights
Profit contribution (in m Eur) 30-6-2000
55 30-6-2001 49 Share in
Group profit 30-6-2000 8.8
30-6-2001 8.3
34
Asset ManagementFurther growth in assets under
management
72.6 (4.3)
69.6 (34.1)
51.9 (41)
36.8 (18.3)
31.1
In billions of EUR
of total AUM 1999 2000
30-6-01
Private Banking
Institutional funds
Mutual funds

7 30 63
10 19 71
7 30 63
35
Outlook

• Economic climate and market conditions remain
  uncertain
• Q3 and Q4 results however should develop more
  favourably
• Y2001 result forecast slightly above Y2000
  results
• Lang term average EPS growth target of 15
  maintained

36
KBCBank Insurance Group

• First Half Year Results 2001

Brussels3 September 2001