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KBC Bank & Insurance Group

KBC Bank & Insurance Group. General Meeting of Shareholders 26 April 2001. General Meeting of Shareholders. W. Breesch Chairman of the Board of Directors. Financial structure in the US, the UK and the euro zone (end of 1999). Table 1:. As a % of GDP. US. UK. Euro zone.

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KBC Bank & Insurance Group

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  1. KBCBank & Insurance Group General Meeting of Shareholders26 April 2001

  2. General Meeting of Shareholders W. Breesch Chairman of the Board of Directors

  3. Financial structure in the US, the UK and the euro zone (end of 1999) Table 1: As a % of GDP US UK Euro zone Outstanding bank loans Outstanding securities debt securities shares 77% 345%166%179% 124% 262%64%198% 132% 177%90%87% Source: own calculations on the basis of BIS, IMF and International Federation of Stock Exchanges (FIBV) data

  4. Proportion of bank loans, shares and debt securities (June 2000) Graph 1: Debt securities, non-financial companies Debt securities, financial institutions Government debt securities Shares Bank loans Source: KBC calculations based on IMF, BIS and International Federation of Stock Exchanges (FIBV) data.

  5. Graph 2: Direct recourse to the capital market by the private sector in the narrow sense of the term (June 2000) Outstanding shares and debt securities issued by non-financial companies as a % of total outstanding bank loans, shares and debt securities issued by non-financialcompaniesSource: KBC calculations based on BIS, IMF of International Federation Stock Exchanges (FIBV) data.

  6. Graph 3: 250 VS VK 200 NL 150 Institutional investors’ financial assetsas a % of GDP S F 100 B I D E 50 P 0 20 30 40 50 60 70 80 Importance of institutional investors and direct recourse to the capital market by the private sector in the narrow sense of the term (1998) Outstanding shares and debt securities issued by non-financial companiesas a % of total bank loans, shares and debt securities issued by non-financial companies Sources: OECD, Financial Market Trends, June 2000; IMF, BIS and International Federation of Stock Exchanges (FIBV).

  7. Increase in direct recourse to the capital market by the private sector in the narrow sense Graph 4: As a % of the total Outstanding shares and debt securities issued by non-financial companies as a % of totaloutstanding bank loans, shares and debt securities issued by non-financial companiesSource: IMF, BIS of International Federation Stock Exchanges (FIBV).

  8. Equity underwriting in Europe Graph 5: in millions of USD Source: Thomson Financial Securities Data, Morgan Stanley Dean Witter Research

  9. General Meeting of Shareholders R. Vermeiren President of the Executive Committee

  10. KBC Bank & Insurance group • KBC Group : Highlights • Financial • Strategic • Areas of activity • Banking • Highlights • Financial information • Insurance • Highlights • Financial information • KBC Group : Central Europe • KBC Group : data per share

  11. Highlights In millions of EUR 1999 2000  % Consolidated profit - Group share *excl. gain on CCF -Banking *excl. gain on CCF - Insurance - Holding company *excl. gain on CCF Key figures per share (in EUR)- Net earnings *excl. gain on CCF - Net dividend - Net asset value - Price/NAV 969.7 969.7 714.7714.7 271.3 -16.3 3.263.26 0.9225 33.8 2.1 1820.7 1165.5 1520.9876.7 320.6 -20.9-31.8 6.093.90 1.065 35.2 1.6 87.7 20.2 112.822.7 18.2 - - 19.5 15.4 4.1 1.3

  12. Solid solvency ratios 1998 1999 2000 20.5% 7.4% 12.8% 63.6% 298% 106.1% 23.3% 9.5% 16.0% 64.2% 307% 106.6% • Group • ROE • Bank • Tier-1 ratio • CAD ratio • Cost/income Insurance • Solvency ratio (1) • Combined ratio 16.1% 7.2% 11.5% 60.0% 311% 103.4% (1) excl. unrealized gains

  13. Strategic Highlights • Shareholding in CCF sold at a gain of 763 m EUR • Growing presence in Central Europe • Sharp increase in assets under management • Merger progressing as planned • Strategy updated and objectives enhanced

  14. Strategic focus • Focus on 4 activities • Retail bancassurance • Corporate services • Asset management • Market activities • Focus on Europe • Belgium: home market • Central Europe: second home market • Western Europe: smaller countries/regions, niches Other regions, if higher return than generally targeted • Focus on ‘local’ clients • Retail • SME

  15. +28% 1999 2000 452 353 In millions of EUR 306 -36% +90% +36% 196 +44% 173 148 131 +230% 109 91 91 66 20 % profit contribution 36% 39% 2% 6% 11% 13% 9% 11% 9% 15% 32% 17% Retailbancassurance CentralEurope Corporateservices Assetmanagement Marketactivities Groupitems Profit Contribution by Activity

  16. Overall financial targets Realized 31 Dec. ‘00 Minimum Target ROE at holding-co.level EPS growth Cost/income ratio bank Combined ratio insurer Tier-1 ratio bank CAD ratio bank Solvency ratio insurer 22% 15% p.a. 55% by 2004 103% by 2004 7% 11% 200% 23.3% 19.6% 64.2% 106.6% 9.5% 16% 307%

  17. KBC Bank & Insurance group • KBC Group : Highlights • Financial • Strategic • Areas of activity • Banking • Highlights • Financial information • Insurance • Highlights • Financial information • KBC Group : Central Europe • KBC Group : data per share

  18. BankingHighlights • Financial • Strong operating results • Operating result : + 16.3 % • Increase in costs slightly higher than increase in income • Merger : • Income synergies better than expected • Merger costs > merger savings • Strategic • Sale of shareholding in CCF • Greater presence in Central Europe • Investment in securities business in UK

  19. BankingSummary 1999 2000  % In millions of EUR Gross operating incomeGeneral expenses Operating result Value adjustments and provisionsExtraordinary result Profit before tax Taxes Minority interests Profit after tax Profit after tax excl. CCF 3868-2524 1344 -565207 986 -183 -88 715 715 4656-3094 1562 -334693 1922 -243 -158 1521 877 20.422.6 16.3 -41.0- 95.0 32.8 - 112.7 22.7

  20. BankingIncome Stream +20.4% Total 4656 Total 3868 +9% Total 3435 +37% +31% In millions of EUR +13% % of total income 1999 2000 Other income 8% 8% Commission income 20% 22% Profit on financial transactions 16% 18% Net interest income (incl. dividends) 56% 52%

  21. KBC Bank & Insurance group • KBC Group : Highlights • Financial • Strategic • Areas of activity • Banking • Highlights • Financial information • Insurance • Highlights • Financial information • KBC Group : Central Europe • KBC Group : data per share

  22. InsuranceHighlights • Financial • Strong increase in premium income (+26.5%) • Good loss ratios in direct non-life insurance • Strategic • Stronger development in Central Europe, thanks to Warta shareholding • Further development of bancassurance

  23. InsuranceOverview In millions of EUR 1999  % 2000 Net premiums Life Unit-linked Non-life Net technical charges Investment incomeGeneral admin. expensesOperating resultNon-recurring resultExtraordinary resultProfit before taxTaxesMinority interestsProfit after tax 2095420935741 -2126 688-34431416-12316-41-4271 26514231459769 -2335 432-37437425-5392-742321 26.50.756.13.8 9.8 -37.28.819.1- -29.680.3-18.2

  24. InsuranceBusiness mix 1999 Gross premiums 2144.5 million EUR 2000 Gross premiums 2704.7 million EUR (+26.1%) Group life 4% Other non-life10% Group life 4% Othernon-life 8% fire 8% Fire 7% Acceptedbusiness 6% Acceptedbusiness 8% Motor 10% motor 12% Individuallife 58% Individuallife65%

  25. Retail Bancassurance in BelgiumCross-selling penetration Total clients bank 1 337 204 (=) Total clients insurance 743 716 (+6.1%) 510 896 Mutualclients • Cross-selling • 510 896 clients holding at least 1 bank AND 1 insurance product • 32.5% of overall client base • 38.2% of bank client base • 155 750 clients holding at least 3 bank AND 3 insurance products • 9.9% of overall client base • 11.6% of bank client base

  26. KBC Bank & Insurance group • KBC Group : Highlights • Financial • Strategic • Areas of activity • Banking • Highlights • Financial information • Insurance • Highlights • Financial information • KBC Group : Central Europe • KBC Group : data per share

  27. Central Europe investmentin millions of EUR market share Ownership (comp. '99) 213.4 7.2 123.2 Poland Kredyt Bank Agropolisa Warta 49.9% (+1.4%) 49.9% (+26.6%) 40.0% (+40%) 5.8%0.6% 12% 1361.9 11.9 49.0 23.4% 0.5% - Czech & Slovak Rep. CSOB CSOB Pojist’ovna Patria 81.5% (-0.8%) 75.8% (=) 91.9% (+91.9%) 132.1 - 2.5 23.9 8.8% 15.1% 0.5%3.1% Hungary K&H Bank K&H Bank after merger K&H Life Argosz 73.3% (+40.7%) 60% 50% 95.4% (=) Total amount invested : 2 bn EUR

  28. Central Europe Overview 1999 2000 • Profit contribution • % contribution to Group result • Allocated equity • Share in allocated equity • ROE • Credit volume, incl.Kredyt Bank (1) • Credit volume as % of total credit volume • Personnel (in FTEs) • No. of branches (1) Kredyt Bank at 50% 20.3 m EUR 2.1% 603.9 m EUR 14.3% 7.6% 4 313.2 m EUR 6.54% 13 581 490 66.3 m EUR 5.7% 795.1 m EUR 13.8% 10.4% 6 676.5 m EUR 8.29% 14 700 841

  29. KBC Bank & Insurance group • KBC Group : Highlights • Financial • Strategic • Areas of activity • Banking • Highlights • Financial information • Insurance • Highlights • Financial information • KBC Group : Central Europe • KBC Group : data per share

  30. Key Figures per share 1998 1999 2000 3.26 1.23 0.9225 37.7% 3.90 1.42 1.065 36.4% Net profit Gross dividend (1) Net dividend per ordinary share Payout ratio 2.69 1.09 0.82 40.6% +19.5% +15.4% (2) (1) proposed (2) payable 30 April 2001

  31. KBC DJ EURO STOXX Banks Bel 20 600 500 400 300 200 100 0 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Information of shareholders Yield KBC Bel-20 DJEuroStoxx Banks 1 year (2000) -11.3% -6.0% 7.5% 3 year (1998-2000) 7.9% 11.1% 15.7% 6 year (1995-2000) 21.1% 17.6% 23.5%

  32. KBCBank and InsuranceHolding Company Company results

  33. KBC Bank and Insurance Holding CompanyCompany results In millions of EUR 1999 2000  % Dividend incomeOther incomeInterest chargesTotal gross incomeStaff and operating chargesOperating resultTaxesExtraordinary resultProfit after taxContribution to consol. result 382.8 0.5-10.9372.4-2.2370.2-5.1263.0628.1-16.3 462.80.2-43.6419.4-3.8415.65.110.5431.2-20.9 + 12.6%+ 12.3%- 31.3%-

  34. KBC Bank and Insurance Holding CompanyProposed dividend and appropriation of profit • Proposed net dividend per ordinary share 1.065 EUR • In thousands of EUR • Profit to be appropriated • Appropriations to capital and reserves • to the legal reserve • to other reserves • Profit (Loss) to be carried forward • Profit to be paid out • Dividends • Directors' entitlements 436 576 298 10 000 448 424 469 1 361

  35. KBCBank & Insurance Group General Meeting of Shareholders26 April 2001

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