Transcript KBC Bank & Insurance Group

KBC Bank
Web site: www.kbc.com
Debt investor presentation
Autumn 2005
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
2
Company profile
Foto gebouw
2005 financial highlights
- KBC Group, financial performance
- Financial headlines, KBC Bank
- Overview, other Group segments
Future earnings drivers
Capital position
Reminder: group structure
KBC Group
KBC
Bank
KBC
Insurance
KBC
AM
KBL
European private bankers
Gevaert
7% 5%
10%
59%
19%
KBC Bank
KBC Insurance
KBC AM
KBL epb
Gevaert
1H05 net profit contribution
4
Credit ratings, KBC Bank
S&P
Moody's
Fitch
LT credit rating
(outlook)
A+
(stable)
Aa3
(stable)
AA(stable)
ST credit rating
A-1
P1
F1+
Recent rating actions:
• March 2005: all ratings confirmed on the occasion of the merger of ‘KBC Holdings’
and ‘Almanij’ to ‘KBC Group’
• March 2004: S&P’s outlook from ‘negative’ to ‘stable’
• Jan 2003: Moody’s outlook from ‘negative’ to ‘stable’
5
Group business portfolio
Revenue
geographical breakdown
(1H 2005)
20%
CEE:
- retail bancassurance
- asset management
- private banking
- SME/corporate
25%
Selected other markets (mostly in W. Europe):
- private banking
- SME/corporate
- capital markets
55%
Belgium:
- retail bancassurance
- asset management
- private banking
- SME/corporate

KBC Group 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. KBC is also active – be it rather selective – in
commercial banking (mostly in W. Europe) and financial markets.
6
Group strategy headlines

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:
Financial strength:
Value creation:
Cost/income, banking
max. 58%
Combined ratio, non-life
max. 95%
Tier-1, banking
min. 8%
Solvency margin, insurance
min. 200%
Adjusted ROE
min. 16%
EPS growth (CAGR)
min. 10%
7
Company profile
Foto gebouw
2005 financial highlights
- KBC Group, financial performance
- Financial headlines, KBC Bank
- Overview, other Group segments
Future earnings drivers
Capital position
1H 2005 at a glance
1.
Group net profit at 1 253 m, up 55% y/y, generating a return on equity of 20%
2.
3.
Underlying Group profit (excl. one-offs) growing at 34%
4.
Strong business volume growth (deposits / loans / AUM / insurance) generating
strong commission income (+23%) and offsetting impact of flattening yield curve
on net interest income
5.
6.
7.
Further downtrend in expenses - cost/income ratio (banking) at 57 %
8.
Outlook for 2005 remains positive
Comparison of individual P/L lines with pro forma 2004 figures distorted by
application of IFRS 32/39 and IFRS 4 as of 2005
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%)
9
Profit trend, 1H 05
1H 2004
1H 2005
1H/1H
3 919
4 163
+6%
+2%
-2 373
-2 313
-3%
-6%
1 545
1 850
+20%
+15%
-242
-57
-76%
-76%
Associated companies
-39
+33
-
-27%
Net profit
810
1 253
+55%
+34%
61%
93%
14%
57%
94%
20%
pro forma
Gross income, net of technical insur.
charges
Expenses
Operating result
Impairments
C/I, banking
CR, non-life
ROE
1H/1H
excl.
one-offs
Notes:
1)
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
2)
All 2004 figures exclude impact of IAS 32/39 and IFRS 4
10
Solid business growth
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%
30 June 2005
Note: Growth trend, excl. (reverse) repo activity, from 31-Dec-04 to 30-Jun-05
11
Solid revenue trend
Gross income (in m), per half year
6 353
5 980
5 660
1H04
2H04
1H05
2H05

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%)
12
Sustained favourable y/y cost trend
Operating expenses (in m), per half year
-3%
2 373
2 571
1H04
2H04
2 313
1H05
2H05

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%
13
Historic low impairment level
Impairment charges (in m), per half year
-76%
242
123
57
1H04
2H04
1H05
2H05

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
LLR Avg loans
Belgium
CZ/Slovakia
Hungary
Poland
International
Total
58.3
10.7
5.4
3.9
40.2
118.5
FY 04
1H 05
0.09%
0.26%
0.64%
0.69%
0.26%
0.20%
0.03%
0.00%
0.93%
0.00%
0.09%
0.06%
14
Company profile
Foto gebouw
2005 financial highlights
- KBC Group, financial performance
- Financial headlines, KBC Bank
- Overview, other Group segments
Future earnings drivers
Capital position
Key points, banking segment
900
800
700
Net profit (in m)

Q2 05 (314 m), down q/q due to:
 One-off income in 1Q ( 68m)
 expected higher cost level:
 Elimination of time lag in usage of IT and
marketing budgets ( Q2/Q1 40m)
 Higher income-related staff costs ( 27
m esp. at KBC Financial Products)
 Restructuring costs (20 m)
Q2 05 y/y trend: Q2 04 includes write-back (73 m) of
provision for operating charges (after legal
settlement)
BANKING
564
367
400
2Q04
300
200
1H 05 profit at record level of 784 m, driven by:
 Strong commission income (+21%)
 NII almost stable despite flatening yield curve
due to solid volume growth
 Strict cost control (C/I at 57% incl. AM)
 Limited credit cost (0.06 bp)
 One-off income in 1Q related to settlement of
historic Slovakian loan (net 68 m)
784
699
600
500

2Q05
318
4Q04
332
100
1Q04
0
1H04
314
470
246
3Q04
2H04
Pro forma IFRS 2004
1Q05
1H05
2H05
IFRS 2005

16
NII trend, banking activities
1H 05 (y/y trend)
NII 1 886m
Incl. IFRS 05: +6%
Excl. IFRS 05: -3%
NIM 1.63%
Incl. IFRS 05: stable
Excl. IFRS 05: -13 bps
Belgium 1.96%
Excl. IFRS 05: stable
CEE 2.94%
Excl. IFRS 05: - 40 bps
Avg. volume
interest-bearing assets
+6%
Other
(o/w epb 0.55%,
stable excl. IFRS)
Belgium
+8%
CEE
+17%
Other
(o/w epb -14%)
17
Competitive landscape in Belgium
Net Interest Margin, KBC Bank, Belgium
2.1%
2.1%
2.1%
1.9%
2.0%
2.0%
2.0%
Spreads on new mortgages (bps), KBC, Belgium
2.0%
0.88
1.9%
1.7%
0.76
1.6%
0.48
1.3%
Jul-05
May-05
Mar-05
Jan-05
2Q05
Nov-04
1Q05
Sep-04
4Q04
Jul-04
3Q04
Interest margin, Belgium
Spread 3m-10y treasury
May-04
2Q04
Mar-04
1Q04
Jan-04
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.
18
Competitive landscape in Belgium
Change in retail market share since the beginning of 2004 (avg. deposits and loans), proxy
3.0%
2.0%
1.0%
0.9%
1.0%
KBC
0.0%
-0.1%
0.0%
4Q03
-1.0%
-2.0%
0.1%
1Q04
2Q04
3Q04
4Q04
-0.9%
Other large banks
1Q05
2Q05
-1.1%
Small retail banks
Source: Febelfin (market sample)
Includes consumer loans, mortgages, saving
accounts and saving certificates
-3.0%

In 2004, the large banks, representing >80% 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 unitlinked insurance and probably mutual funds).
19
Company profile
Foto gebouw
2005 financial highlights
- KBC Group, financial performance
- Financial headlines, KBC Bank
- Overview, other Group segments
Future earnings drivers
Capital position
Segment structure
KBC Group NV
KBC
Bank
KBC
Insurance
KBC
AM
KBL epb
Gevaert
Primary segmentation by business segment
21
EUROPEAN PRIVATE
BANKING
INSURANCE
280
Net profit (in m)
246
230
Net profit (in m)
124
180
119
130
66
2Q05
3
80
2Q04
89
58
30
2Q04
-20
122
4Q04
3Q04 30
8
43
38
1Q04
1Q05
41
23
1H04
2H04
1H05
2H05
IFRS 2005
ASSET MANAGEMENT
Net profit (in m)
119
100
58
60
66
4Q04
2Q04
GEVAERT
36
Net profit (in m)
109
IFRS 2005
Pro forma IFRS 2004
160
80
1Q05
4Q04
180
120
53
-30
-55
Pro forma IFRS 2004
140
2Q05
3Q04
1Q04
-70
94
126
63
85
-48
68
17
1Q04
1H04
2Q05
2Q05
4Q04
3Q04
12
2H04
1Q05
31
32
1H05
2H05
-65
40
51
20
0
1Q04
53
3Q04
1H04
2H04
Pro forma IFRS 2004
58
2Q04
1Q05
1H05
2H05
IFRS 2005
Pro forma IFRS2004
IFRS 2005
22
Segment structure – cont’d.
2
1
KBC Group NV
KBC
Bank
KBC
Insurance
KBC
AM
KBL epb
Gevaert
Retail
Business customers
CEE
Markets
European
private banking
1 . Primary segmentation by business segment
2. Additional breakdown by area of activity
Gevaert
23
Net profit (in m)
BUSINESS
CUSTOMERS
Net profit (in m)
RETAIL BELGIUM
539
225
226
357
185
244
94
219
132
2Q04
1Q04
87
1H04
101
118
2Q05
260
2Q04
4Q04
295
4Q04
3Q04
97
2Q05
108
1Q05
2H04
1Q04
1H05
Pro forma
2H05
91
1Q05
3Q04
1H04
125
2H04
1H05
Pro forma
2H05
CAPITAL MARKETS
CEE
Net profit (in m)
Net profit (in m)
137
312
92
70
121
2Q05
164
53
2Q04
92
120
98
4Q04
1Q04
74
3Q04
66
1H04
2Q05
68
191
46
2Q04
106
53
4Q04
2H04
Pro forma
17
1Q04
1Q05
1H05
2H05
3Q04
1H04
2H04
1Q05
1H05
2H05
Pro forma
24
Company profile
Foto gebouw
2005 financial highlights
- KBC Group financial performance
- Financial headlines KBC Bank
- Overview other Group segments
Future earnings drivers
Capital position
Earnings drivers in Belgium - overview
Do not underestimate the market:






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
KBC Group is well positioned:






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)
insurance products and well-performing
bancassurance distribution model
Well-diversified revenue structure (50% fee
income) and further increase in fee income
targeted
Further cost efficiency improvement potential,
among other things, via co-sourcing of back
offices with other banks
26
Mid-term financial outlook, Belgium
Gross income
C/I, banking
LLR
Net profit
Retail
5% CAGR
Low 60s
< 0.25%
>10% CAGR
Business
customers
>2% on RWA
< 43%
< 0.35%
>10% CAGR
27
Earning drivers in CEE - overview
Strong market growth momentum:
KBC Group is well positioned:

 Solid market position in retail and corporate

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 c. 3%
Ongoing catch-up in product penetration
(currently, an avg. of 45% for banking accounts
and 5% for mortgages)
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

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

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
28
Bancassurance fueling CEE earnings
Now the model is in place:

Transfer of product know-how and
streamlining of business processes and IT
systems

Implementation of KBC’s 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
Results are encouraging:
Cross-sell
rates
2004
CZ
HU
PL
SK
BE
Consumer
loan
X
Life
83%
50%
100%
94%
67%
Mortgage
loan
X
Life
45%
50%
100%
75%
67%
Mortgage
loan
X
Property
insurance
54%
71%
42%
30%
50%
29
Growth in AM fueling CEE earnings
KBC is well positioned:
Results are encouraging:

Strong appetite for ‘risk-free’ investments in
the market (money-market, capital-guaranteed
funds), fully in line with KBC’s core
competencies and successful track record in
Belgium

Cost/AUM below average (around 16 bps vs.
20 bps for Europe)
=

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
competitive advantage relative to other CEE
players
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%
+
30
Mid-term financial outlook, CEE
Banking
Insurance
AM
RWA
CAGR
Net profit
CAGR
Loan-loss
ratio
Cost/Income
ratio
10% – 15%
10% – 15%
< 0.50%
< 60%
Premium income
CAGR
Net profit
CAGR
Combined
ratio
15% – 25%
25% - 35%
95%
Growth AUM
mutual funds
Growth AUM
pension producs
15% – 20%
10% - 20%
31
Private banking in higher gear
Business model: integrated private banking business in selected European markets focusing on clients with
>€1m of investable assets
Total assets currently amounts to 76 bn (Sep-05)
Belgium


W. Europe onshore
Dual brand strategy:
network-led vs.
‘independent boutique’

Growth drivers: network
trade-up, extension of
product offer and hiring
of private bankers


AUM 27 bn
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
M&A
W. Europe offshore

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
CEE

Small today , but high
market growth expected
(>15% p.a.)

Strengthening a
network-led model,
leveraging Belgian
experience
AUM 18 bn
AUM 3 bn
AUM 28 bn
Opportunistic acquisitions may imply investments of 150-250 m per year
32
Mid-term financial outlook, PB
Private Banking
AUM Growth
Net profit
Cost/Income
9% CAGR
(14% Belgium, 15% CEE
0% offshore and 10% W.
Eur onshore)
10% CAGR
< 55%
33
FY 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 >10% CAGR EPS growth

On the basis of the solid 1H 05 earnings and the prevailing view regarding
the relevant economic and financial parameters, KBC’s 2005 net profit is
expected to exceed the10% growth level, amounting to more than 2 bn euros
34
Company profile
Foto gebouw
2005 financial highlights
- KBC Group financial performance
- Financial headlines KBC Bank
- Overview other Group segments
Future earnings drivers
Capital position
Solvency
KBC Bank
(Tier-1)
KBL epb
(Tier-1)
In m EUR
In m EUR
10000
KBC Insurance
(solvency margin)
10.1%
9.8%
In m EUR
397%
1100
3000
9000
900
8000
8.5%
8.1%
2500
347%
7000
2000
700
6000
5000
1500
500
4000
1000
3000
300
2000
500
100
1000
0
0
Dec-04
Legal
1H05
Econ buffer
Excess
-100
Dec-04
Legal
1H05
Econ buffer
Excess
1H05
Dec-04
Legal
Econ buffer
Excess
36
Capital position
Capital position
Available
capital 1
Surplus
capital 2
Immediate
free surplus 3
KBC Bank
10.7 bn
2.1 bn
1.5 bn
KBC Insurance
2.8 bn
1.2 bn
0.4 bn
Gevaert
1.2 bn
1.0 bn
0.4 bn
KBC AM and KBL epb
p.m.
Total
14.7 bn
4.3 bn
2.3 bn
Internal capital budget requirements
Deleveraging of the holding company
0.4 – 0.6 bn
Buy-out of 3rd parties in CEE
0.8 – 1.3 bn
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)
37
Foto gebouw
Appendices
- Issue activity KBC Bank, overview
- Other
Issue activity 2002
Origin of Funding 2002

A total of 75 senior debt
transactions issued through
KBC Ifima subdivided in:
 5 strategic FRN
transactions for
2 200 m EUR equivalent
 70 (structured)
private/ public
placements for
531 m EUR equivalent
Structured
issuance
19%
Strategic FRN
transactions
81%
39
Detail of FRN issuance over 2002
FRN issuance in International Markets over 2002
Issue size
Type of transaction
Start
End
EUR 500 000 000 (*)
public FRN issue
21/01/2002
21/01/2005
euribor 3m + 13.37 bp
3 year
EUR 250 000 000 (*)
public FRN issue
31/01/2002
21/01/2005
euribor 3m + 13.51bp
3 year
13/03/2002
13/03/2007
euribor 3m + 17.35 bp
5 year
28/03/2002
21/01/2005
euribor 3m + 12.97 bp
2y 10m
EUR 500 000 000
EUR 250 000 000 (*)
public FRN issue
public FRN issue
All-in cost p.a.
Tenor
EUR 300 000 000
private FRN issue
26/04/2002
26/04/2004
euribor 3m + 8 bp
2 year
EUR 200 000 000
private FRN issue
03/05/2002
03/05/2004
euribor 3m + 8 bp
2 year
EUR 200 000 000
private FRN issue
05/07/2002
05/01/2004
euribor 3m + 5.68 bp
(*) fungible tranches
1.5 year
40
Issue activity 2003


A total of 142 senior debt
transactions issued through
KBC Ifima subdivided in :
 3 strategic FRN
transactions for
610 m EUR equivalent
 139 (structured)
private/public
placements for
1 259 m EUR equivalent
An ad hoc Tier-I issue
of 200 m GBP
(perpetual NC 16 years)
Origin of Funding 2003
Tier-1
13%
Strategic FRN
transactions
28%
Structured
issuance
59%
41
Detail of FRN+
Tier-1 issuance over 2003
FRN and Tier-1 in International Markets over 2003
Issue size
Type of transaction
Start
End
All-in cost p.a.
Tenor
EUR 250 000 000
private FRN issue
27/01/2003
27/01/2005
euribor 3m + 8 bp
2 year
EUR 100 000 000
private FRN issue
07/02/2003
07/02/2005
euribor 3m + 8 bp
2 year
EUR 260 000 000
private FRN issue
21/03/2003
23/03/2008
euribor 3m + 8 bp
5 year
GBP 200 000 000
public Tier-1 issue
19/12/2003
Perp NC 16
euribor 3m + 8 bp
Perp
42
Issue activity 2004


A total of 301 senior
debt transactions and
2 subordinated Lower Tier-II
transactions
(101 m EUR equivalent)
issued through KBC Ifima
subdivided in:
 8 strategic FRN
transactions for
2 698 m EUR equivalent
 295 (structured)
private/ public
placements for
1 940 m EUR equivalent
Origin of Funding 2004
Tier-1
5%
Strategic FRN
transactions
55%
Structured
issuance
40%
An ad hoc Tier-I issue
of 175 m GBP
(perpetual NC 15 years)
43
Detail of FRN issuance +
Tier-1 issuance over 2004
FRN and Tier-1 issuance in International Markets over 2004
Issue size
Type of transaction
Start
End
All-in cost p.a.
Tenor
EUR 500 000 000
public FRN issue
20/01/2004
20/01/2006
euribor 3m + 4.5 bp
2 year
EUR 50 000 000
private FRN issue
27/01/2004
27/01/2006
euribor 3m + 2 bp
2 year
EUR 300 000 000
public FRN issue
28/01/2004
28/01/2009
euribor 3m + 12 bp
5 year
JPY 27 000 000
000
private FRN issue
09/02/2004
09/02/2006
euribor 3m + 3 bp
2 year
EUR 200 000 000
private FRN issue
19/02/2004
19/02/2004
euribor 3m + 3 bp
2 year 1m
EUR 500 000 000
public FRN issue
15/09/2004
15/09/2004
euribor 3m + 8.5 bp
4 year
CZK 1 100 000 000
private zero coupon
issue
25/10/2004
25/10/2004
pribor 3m - 1 bp
2 year
EUR 100 000 000
Private FRN issue
27/10/2004
27/10/2004
euribor 3m flat
2 year
EUR 300 000 000
public FRN issue
02/12/2004
02/12/2004
euribor 3m + 8 bp
3.8 year
EUR 150 000 000
private FRN issue
01/12/2004
01/12/2004
euribor 3m + 2.5 bp
2 year
EUR 500 000 000
Private FRN issue
14/12/2004
14/12/2004
euribor 3m + 9.5 bp
5 year
USD 27 351 535
private issue
16/02/2005
16/02/2005
euribor 3m + 4.5 bp
5 year
GBP 175 000 000
public Tier-1 issue
03/11/2004
03/11/2004
libor 3m + 79 bp
Perp
44
Issue activity 2005
(till 31st august)

A total of 402 senior
debt transactions and
7 subordinated Lower Tier-II
transactions
(409 m EUR equivalent)
issued through KBC Ifima
subdivided in:
 3 strategic FRN
transactions for
615 m EUR equivalent
 399 (structured)
private/ public placements
for
3 053 m EUR equivalent
Origin of Funding 2005 (till 31st August)
Strategic FRN
transactions
17%
Structured
issuance
83%
45
Detail of FRN issuance over 2005
(till 31st August)
FRN issuance in International Markets over 2005
Issue size
Type of transaction
Start
End
All-in cost p.a.
Tenor
EUR 215 000 000
private FRN issue
10/01/2005
10/01/2010
euribor 3m + 9.5 bp
5 year
EUR 250 000 000
private FRN issue
23/03/2005
23/03/2007
euribor 3m flat
2 year
EUR 100 000 000
private FRN issue
24/04/2005
24/04/2007
euribor 3m - 1 bp
2 year
46
Maturity buckets of strategic FRN
Maturity buckets of outstanding strategic FRN
2 500
Amount in m EUR
2 000
1 500
1 000
500
0
1H06
1H07
1H08
2H08
1H09
2H09
1H10
47
Foto gebouw
Appendices
- Issue activity KBC Bank, overview
- Other
Market cap ranking in Euroland
Dec 2002
Aug 2005
Aug 2004
1
2
3
BNP Paribas (35 bn)
BSCH (31bn)
1
2
BNP Paribas (43 bn)
BSCH (37 bn)
1
2
BSCH (63 bn)
BNP Paribas (53 bn)
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
7
8
9
10
Société Générale (24 bn)
Unicredito (22 bn)
DJ
7 ABN AMRO (28 bn)
Euro
Fortis (22 bn)
8 Unicredit (24 bn)
Stoxx Banks
Crédit Agricole (14bn)
9 Fortis (23 bn)
constituents
Dexia (14 bn)
10 Intesa BCO (17 bn)
6
Crédit Agricole (29 bn)
6
7
ABN AMRO (37 bn)
Crédit Agricole (33 bn)
8
9
10
Fortis (31 bn)
Unicredit (29 bn)
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)
SanPaolo IMI (9 bn)
Banco Popular (8 bn)
14
15
16
Allied Irish Banks (11 bn)
HVB (10 bn)
Commerzbank (8 bn)
14
15
16
HVB (17 bn)
Allied Irish Banks (16 bn)
Bank Austria (13 bn)
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)
15
16
17
49
Shareholder structure
CERA/Almancora
27.1%
MRBB
11.6%
Free float
47.3%
Other committed
shareholders 11.7%
(own shares: 2.3%,
including ESOP hedge)
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
50
KBC’s presence in CEE
CEE profit contribution to KBC Group
Profit contribution, Poland
25%
2005
H1
2003
2004
-295 m
25 m
Share of business segments
in gross income, CEE Banking
Other
22%
Total assets, bank:
5 bn EUR
Market share, bank:
5% (No. 8)
Market share, life:
3% (No. 7)
Market share, non-life: 11% (No. 2)
SME/Corp
21%
Retail
57%
Profit contribution, CZ + SK
2003
2004
143 m
162 m
Czech Republic
Total assets, bank: 18 bn EUR
Market share, bank: 21% (No. 2)
Market share, life:
8% (No. 5)
Market share, non-life: 4% (No. 6)
Profit contribution, Slovenia
2003
2004
10 m
26 m
Minority stake (34%)
Market share, bank: 41% (No. 1)
Market share, life:
6% (No. 5)
Slovakia
Total assets, bank: 2 bn EUR
Market share, bank: 6% (No. 4)
Market share, life: 4% (No. 8)
Market share, non-life: 2% (No. 7)
Profit contribution, Hungary
2003
2004
11 m
31 m
Total assets, bank:
7 bn EUR
Market share, bank: 11% (No. 2)
Market share, life:
4% (No. 7)
Market share, non-life: 4% (No. 6)
51
Group income statement, 1H 2005
(in m euros)
Banking
Insurance
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from FI at FV
Net realised gains from AFS assets
Net fee and commission income
Other income
1 807
0
67
121
63
605
223
266
1 707
86
4
144
-148
29
-1
0
7
8
1
184
1
Gross income
2 887
2 088
-1 685
-34
-34
1
0
0
17
Profit before taxes
Income tax expense
Minority interests
Operating expenses
Impairments
- o/w on loans and receivables
- o/w on AFS assets
Gross technical charges, insurance
Ceded reinsurance result
Share in results, associated companies
Net profit
Excl. intrasegment eliminations
AM
KBL
epb
Gevaert
Holding
Group
79
0
7
82
21
206
33
-2
0
3
14
37
0
49
-30
0
0
-4
0
-2
235
2 122
1 707
169
225
265
839
330
199
429
101
200
5 660
-254
-20
-1
-18
- 1464
-33
0
-30
0
0
0
0
0
0
-287
-5
0
1
0
0
2
-42
1
1
1
0
0
15
-257
0
0
0
0
0
0
-2 313
-57
-34
-16
-1 464
-33
33
1 185
316
169
137
75
-57
1 826
-306
-96
-66
-4
-43
0
-39
-4
-12
-1
-2
0
-469
-104
784
246
126
94
63
-59
1 253
52
Areas of activity overview, 1H 2005
(in m euros)
Retail
CEE
SME/
Corp.
Markets
KBL epb
1 288
-734
+7
-178
0
383
925
-526
-7
-71
-41
282
508
-183
-34
-84
0
208
410
-235
-2
-67
0
106
429
-289
-5
-39
-4
94
373
-156
-15
-46
-1
155
131
-83
-1
-10
-7
30
47
-15
-4
-10
0
17
Gevaert
Total
Banking and AM
Gross income
Operating expenses
Impairments
Income tax expense
Minority interests
Net profit – group share
3 515
-2 004
-39
-415
-100
1 003
Insurance
Gross income (- techn. ch.)
Operating expenses
Impairments
Income tax expense
Minority interests
Net profit – group share
591
-254
-20
-66
-4
246
Holding Co
Net profit – group share
63
3
63
5%
11%
1 253
Group total
Net profit – Group share
Share in group result
ROAC
Excl. non-allocated results
539
43%
29%
312
25%
54%
225
18%
20%
106
8%
28%
94
8%
16%
20%
53
Contact information
Investor Relations Office
Luc Cool
Nele Kindt
Marina Kanamori
[email protected]
Surf to www.kbc.com for the latest update.
54