Transcript KBC Bank & Insurance Group

KBC Group
Web site: www.kbc.com
Ticker codes: KBC BB (Bloomberg)
KBKBT BR (Reuters)
ISIN code: BE0003565737
Summer presentation
June 2005
Contact information
Investor Relations Office
Luc Cool
Nele Kindt
Marina Kanamori
Tel.: +32 2 429 49 16
investor.relations @ kbc.com
Surf to www.kbc.com for the latest update.
2
Important information

KBC Group’s financial accounts are presented according to IFRS reporting
standards as of 1Q2005

As IFRS have a material impact on the way earnings are presented, this
presentation is drafted to increase their visibility and to help the investment
community to understand the underlying profit trends

KBC believes that this presentation is reliable, although some information may be
condensed or incomplete

By receiving this presentation, each investor is deemed to represent that it
possesses sufficient expertise to understand the risks involved

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

This presentation contains forward-looking statements with respect to our earnings
development. By their nature, these forward-looking statements involve
assumptions, uncertainties and opportunities. The risk exists that these statements
may not be fulfilled and that future results differ materially.
3
Financial highlights - 1Q 2005
Foto gebouw
- Group performance
- Headlines per segment
FY 2005 profit outlook
Additional information on 1Q 2005 results
2004 pro forma IFRS quarterly accounts
Strong earnings momentum
Net profit
+91% yoy
717
557
476
376
332
1Q04
2Q04
440
434
393
3Q04
4Q04
As published (Bel. GAAP), KBC Old
1Q04
365
2Q04
3Q04
4Q04
Pro forma (IFRS 2004), MergCo
1Q05
2Q05
IFRS 2005
5
Key figures
Key figures
Gross income
Result as
published
Nonrecurring
items (1)
2 756
-169
Underlying
result
2 587
Underlying,
Chg yoy (2)
N.R.
(3)
Operating income (4)
1 023
-169
854
+122 m
(+17%)
Impairments
-15
-
-15
-137m
(-90%)
Net profit
717
-136
581
+205m
(+55%)
C/I, banking
CR, non-life
ROE
51%
92%
24%
55%
92%
21%
Notes:
(1) Related to settlement of a ‘historic’ Slovakian loan (net 68 m) and value gains on shares of Irish insurer FBD (net 68 m)
(2) Comparison with 2004 figures not fully valid since IAS 32/39 and IFRS 4 not applied to 2004 figures
(3) Comparison not relevant due to significant impact of IFRS 4 application
(4) Gross income minus technical charges, insurance, plus ceded R/I result minus operating expenses
6
Highlights
1.
2.
Underlying profit at 581 m*, up 32% q-o-q and 55% y-o-y
3.
Comparison of individual P/L lines with pro-forma 2004 figures distorted by
application of IFRS 32/39 and IFRS 4 as of 2005
4.
5.
Stable interest income in adverse competitive and market-yield environment
6.
Very low combined ratio, non-life (92%)
Strong growth of commission income (+20%) due to successful sales and
management of mutual funds
Further downward trend in expenses - cost/income ratio, banking at 55 %*
7. Zero credit-risk provisioning (loan-loss ratio 0%)
8. Increased profitability in all business segments
9. Satisfactory results in Poland (17 million profit contribution and zero credit cost)
10. Outlook for 2005 remains positive
* Adjusted for one-off results of 136 m
7
Main changes IFRS 2004 – 2005

Impact of M2M of financial instruments (IAS 32/39):

Impact of the M2M of hedging derivatives has been to a high degree
‘hedged’ by use of the ‘FIV’ book’ (intentional M2M of part of the bond
portfolio via P&L)

Impact on 1Q05: -29 m (before tax and minorities), recognized under
‘trading’ income (net profit of financial instruments at fair value)

Net impact of IFRS 4 on insurance contracts very limited (8 m)

Material impact on individual I/S lines: ‘net interest income’ and ‘trading
income’ (IAS 32/39) and ‘premium income (IFRS 4). The most important
changes are:
1.
Reclassification of interest component of hedging derivatives from
‘interest income’ (+63 m) to ‘trading income’ (-63 m)
2.
No recognition of premium income (-457 m) of unit-linked insurance
products (additional margin recognized as commission income: +13 m)
8
Satisfactory quality of revenue
Gross income (m)
3 175
3 462
3 178
2 756
2 517
Excl. one-offs (169 m) and
IFRS reclassifications, solid
quality of banking income:
stable interest income (in
adverse
interest
rate
environment),
strong
commission line (+17% y-o-y)
and lower trading revenue
Nominal amount dropped, mainly
due to a) non-recognition under
IFRS 2005 of 464 m new unitlinked premium volume, b) M2M
of financial instruments (IAS
32/39) and c) lower guaranteed
life insurance
(-667 m q-o-q and –95 m y-o-y)
1Q04
2Q04
3Q04
Pro forma IFRS 2004
4Q04
1Q05
2Q05
IFRS 2005
9
Operating expenses at low level
Operating expenses (m) 1 424
1 269
1 105
1 147
1 104
4Q04 lifted by staff profitsharing bonuses, marketing
costs, litigation provision (KBC
Bank)
and
restructuring
provision (KBL epb)
1Q04
2Q04
3Q04
Pro forma IFRS 2004
* C/I of 55% excl. non-recurring income
4Q04
Cost/income of banking and
asset management at 51%*
1Q05 down 13% y-o-y due to
cost cutting, no provisioning for
future operating expenses &
timing differences (y-o-y trend
not to be extrapolated to Q2)
1Q05
2Q05
IFRS 2005
10
Without significant impairments
152
Impairments (m)
Loan-loss
ratio
Belgium
CR/Slovakia
Hungary
Poland
Avg loan
portfolio
56.2 bn
10.4 bn
5.3 bn
3.9 bn
LLR
FY04
0.09%
0.26%
0.64%
0.69%
LLR
1Q05
Nil
Nil
0.73%
Nil
International
38.6 bn
0.26%
0.07%
Total
114.4 bn
0.20%
Nil
90
79
44
15
1Q04
2Q04
3Q04
Pro forma IFRS 2004
4Q04
Historic low level of
impairment charges (loanloss provisions: net writebacks of 3 m)
1Q05
2Q05
IFRS 2005
11
Excellent underwriting result, non-life
1
Combined ratio (%))
1
103%
96%
1
Combined
ratio
FY
2003
FY
2004
1Q
2005
Belgium
Czech Rep.
Slovakia
Hungary
Poland
93%
102%
146%
103%
-
93%
99%
138%
98%
95%
89%
92%
132%
83%
101%
R/I
100%
98%
90%
Total
96%
95%
92%
95%
92%
1
Very low combined
ratio in most markets
1
1
1
FY02
FY03
FY04
Pro forma IFRS 2004
1Q05
2Q05
IFRS 2005
12
Asset growth
Customer
loans (1)
o/w
mortgages
Customer
deposits (1)
‘Life
deposits’
AUM
(off-balance)
108.4 bn
29.0 bn
166.4 bn
13.9 bn
150.7 bn
Total %, Ytd (1)
+2%
+4%
+4%
+3%
+7%
Belgium
+2%
+4%
+5%
+3%
+9%
CEE
- CR/Slovakia
- Hungary
- Poland
0%
+1%
+1%
-4%
+6%
+6%
+8%
+2%
+10%
+14%
+ 4%
+ 2%
+7%
+8%
+15%
-7%
+7%
+12%
+35%
-14%
Rest of the world
+4%
+6%
+2%
-5%
+5%
Note:
(1) Growth excl. (reverse) repo’s
13
Financial highlights - 1Q 2005
Foto gebouw
- Group performance
- Headlines per segment
FY 2005 profit outlook
Additional information on 1Q 2005 results
2004 pro forma IFRS accounts
Segment structure
KBC Group NV
KBC
Bank
KBC
Insurance
KBC
AM
KBL epb
Gevaert
Primary segmentation by business segment
15
Key points, business segments
BANKING
Net profit (m)
Banking:

470
332
367

318
246
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
IFRS 2005
Pro forma IFRS 2004
Insurance:

INSURANCE
Net profit (m)
122
89
58
30
1Q04
2Q04
3Q04

4Q04
1Q05
2Q05
-55
Pro forma IFRS 2004
Profit at record level of 470 m (402 excl. one-off),
driven by:

Strict cost control (C/I at 55% incl. AM, excl.
one-off)

Zero credit cost
Good top-line quality, not boosted by gains and
trading income. Commissions were strong (up 17%
y-o-y) and NII stable despite adverse interest yield
climate

Results increasing to 122 m on the back of:

Higher capital gains (esp. FBD – net nonrecurring impact: 68 m)

Low impairment charges on portfolios
(extremely high in 1Q04)

Excellent underwriting performance (CR, nonlife 92%)
Interest income stable in spite of increased
reserves invested due to interest yield context
Capital gains expected to be lower in coming
quarters
IFRS 2005
16
Key points, business segments
Net profit (m)
Asset management:
ASSET MANAGEMENT


51
1Q04
58
2Q04
66
53
3Q04
4Q04
58
1Q05

2Q05
IFRS 2005
Pro forma IFRS 2004
European private banking:
Net profit (m) EUROPEAN PRIVATE
BANKING

53
43
38

23
1Q04
2Q04
3Q04
4Q04
Pro forma IFRS 2004 -30
AUM in 1Q05 up 8% to 85.2 bn on the back of new
money entries
Profit contribution at 58 m, +7 m y-o-y (driven by
increased AUM), down 8 m q-o-q (exceptionally high
dividend income in Q4)
Note: total 3rd assets of the group: 150.7 bn

Asset management segment: 72.3 bn (3rd party)
+ 12.9 bn (group assets)

Banking segment: 28.7 bn (mostly private and
HNWI assets in Belgium and CEE)

European private banking segment: 49.7 bn (o/w
46.0 bn of private customers via epb network)
1Q05
IFRS 2005
2Q05



Profit contribution at 53 m, up 10 m y-o-y and up 83 m
q-o-q (Q4 heavily depressed by one-off 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 1Q05 up 6% to 49.7 bn
Cost/income at 63%
No relevant impairment charges
17
Key points, business segments
Net profit (m)
GEVAERT
17
1Q04
25
12
2Q04
3Q04
4Q04
Pro forma IFRS2004
Gevaert:
32
1Q05

2Q05
IFRS 2005

-65

Profit contribution of 32 m, slightly higher than
previous quarters (remind that in 2Q04
discontinued activities weighed heavily on the
P/L)
Revenue shored up by M2M of private equity
portfolio (15m) (according to IFRS standards)
Profit contribution from Afga Gevaert: 8m

1Q04
2Q04
-7
3Q04
4Q04
HOLDING
COMPANY
-12
1Q05
2Q05
Holding company:

-13
-18
-27

Pro forma IFRS 2004
Net holding company costs at 18 m, somewhat
above 2004 quarterly average due to increased
debt leverage related to the minority buy-out of
KBL (+530 m).
Debt funding will be gradually reduced in the
next quarters
IFRS 2005
Net profit (m)
18
Segment structure – cont’d
2
1
KBC Group NV
KBC
Bank
KBC
Insurance
KBC
AM
KBL epb
Gevaert
Retail
SME/Corporate
CEE
Markets
European
private banking
1 . Primary segmentation by business segment
2. Additional breakdown by area of activity
Gevaert
19
Reminder
Changes as of 1Q 2005:




Allocation of capital:

Tier-1 of 8% (with 15% hybrid), previously 7%

No further allocation of goodwill
Integration of ‘Asset management’ business into
retail and corporate divisions
Additional areas: ‘European private banking’ and
‘Gevaert’ *
Use of IFRS reporting standards
* Best-efforts approach for 2005 – will be reassessed in the future
Areas of activity in 2005: *
1.
Retail bancassurance (mainly
in Belgium)
2.
Central and Eastern Europe
3.
Corporate services
(SME and corporates)
4.
Market activities
5.
KBL European private banking
6.
Gevaert
20
Retail Belgium and CEE
Net profit (m)
Retail Belgium:
RETAIL BELGIUM

303
146
87
1Q04
295
132

2Q04
3Q04
4Q04
Pro forma
Net profit (m)
1Q05
2Q05

CEE:
CEE


191

66
1Q04
89
2Q04
75
3Q04
Pro forma
51
4Q04
Net profit in line with previous quarter and 3x higher
y-o-y driven by:

sound revenue growth (investments-related)

sustained cost discipline

absence of credit provisioning and strong nonlife underwriting performance

normalization of value impairments on the
investment portfolio (delta of 115 m)
‘Private banking Belgium’ sub-segment contributes
17m
ROAC at 33% (pro forma FY04: 22%)
1Q05
2Q05

Profit contribution of 191 m, of which 181 m in
banking (of which 68 m one-off) and 10 m in
insurance. ROAC at 66% (pro forma FY04: 27%)
In CR/Slovakia: strong quarter (150 m), though
backed by one-off (68m) and M2M of derivatives
(20m) and zero credit provisioning
Hungary: further positive development of operating
results, but higher loan-loss provisions (LLR 0.73%,
similar to that of major peers). Profit at 10 m
Poland: strong quarter (23 m, of which 17 m in
banking) with improved C/I and zero credit
provisioning
21
Earnings momentum in CEE, banking
CSOB, C/S Rep.
In m EUR
Kredyt Bank, Poland
1Q05 ROAC: 120%
In m EUR
1Q05 ROAC: 32%
148
42
50
32
1Q04
2Q04
3Q04
17
37
4Q04
1Q05
10
7
1Q04
2Q04
0
3Q04
4Q04
1Q05
NLB, Slovenia
K&H, Hungary
In m EUR
14
1Q05 ROAC: 17%
In m EUR
16
12
1Q04
* Pro forma
5
2Q04
7
7
7
3Q04
4Q04
1Q05
6
1Q04
5
3
2Q04
3Q04
4Q04
8
1Q05
22
SME and wholesale activities
Net profit (m)
SME/corporate:
SME/CORPORATE

Strong profitability trend of 2004 continues as a
result of, inter alia:


134
108
106
1Q04
2Q04
99
105


3Q04
Pro forma
4Q04
1Q05
2Q05
absence of loan losses
sustained solid technical
reinsurance
result
from
Quarterly profit level even higher than that of
previous quarters, thanks in particular to a
commercial real estate transaction (12 m)
ROAC at 25% (pro forma FY04: 19%)
Capital markets:
Net profit (m) CAPITAL MARKETS


88
71
76
75
4Q04
1Q05

Profit contribution continues to be at level
registered in previous quarter, but below record
high of 1Q 2004 (when exceptionally fine results
were booked in share and bond derivatives)
Income form convertibles & equity derivatives
trading was particular weak
ROAC at 42% (pro forma FY04: 34%)
19
1Q04
2Q04
3Q04
Pro forma
2Q05
23
2005 profit outlook

The profit for the quarter cannot be extrapolated to the entire year. Nevertheless, KBC
continues to be positive for the rest of 2005

Tight cost control is being maintained

There are no signs of any substantial decline in credit quality

The impact of M2M of financial instruments has so far been relatively limited, due among
other things to a adequate ‘hedge policy’, which will continue to be implemented

The interest rate environment is a factor of uncertainty

Reiteration/reconfirmation of previous guidance: 2005 net profit will be at least
1 825 m (= adjusted pro-forma figure for 2004)

KBC will renew its financial objectives (previously set for the period 2002-2005)
taking into account the impact of IFRS and the group enlargement. Disclosure on
23 June 2005.
24
Financial highlights - 1Q 2005
Foto gebouw
- Group performance
- Headlines per segment
FY 2005 profit outlook
Additional information on 1Q 2005 results
2004 pro forma IFRS quarterly accounts
Group income statement, 1Q 2005
(in m euros)
Banking
Insurance
898
0
19
71
56
321
149
131
729
10
-5
106
-81
19
0
0
2
4
0
88
0
1 513
907
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
Profit before taxes
-807
2
4
-2
0
0
12
720
Income tax expense
Minority interests
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
Gross income
Net profit
AM
KBL
epb
Gevaert
Holding
Group
38
0
2
45
2
100
24
-2
0
1
20
4
0
23
-16
0
0
0
0
-2
105
1 048
729
34
133
168
429
215
94
211
46
88
2 756
-123
-16
-1
-14
-612
-17
0
140
-15
0
0
0
0
0
0
79
-134
-1
1
0
0
0
1
77
-20
0
0
0
0
0
8
33
-108
0
0
0
0
0
0
-20
-1 104
-15
3
-16
-612
-17
21
1 030
-196
-54
-18
0
-21
0
-21
-3
-2
0
2
0
-256
-57
470
122
58
53
32
-18
717
26
Gross income - reconciliation
Net interest income
Net fee & commission income
Gross earned premium
Net realized gains AFS
Dividend income, net gains from FI at FV, other income.
As of 1Q04: ‘gross’
As of 1Q04: incl. insur. instead of ‘net premium’
sales commissions (-)
and KBL’s fee income (+) Investment income
insurance largely to
3 175
‘interest income’
3 462
As of 1Q05: excluding
unit-linked volumes
3 178
2 756
1550
1245
1275
1373
2 517
1577
1404
729
901
870
382
355
536
562
525
313
323
393
806
796
755
781
2Q04
425
290
320
351
1Q04
365
3Q04
357
324
323
995
966
910
As of 1Q04: incl.
insurance and KBL
4Q04
1Q04
As published (B-GAAP), KBC Old
399
963
429
1048
1Q05: IFRS
reclassification from
‘trading’(-) to ‘interest’(+)
2Q04
3Q04
4Q04
Pro forma (IFRS 2004), MergCo
1Q05
2Q05
IFRS 2005
27
Operating expenses - reconciliation
Banking +AM
Holding Co
Gevaert
Insurance
KBL epb
4Q04 lifted at KBL by
restructuring provision
1 424
1 269
236
1 103
173
1 071
1 004
163
1 129
122
170
124
1 105
1 147
135
158
129
140
1 104
135
134
123
123
IFRS reclassification
as of 1Q04: paid
commissions to
‘commission income’
928
910
954
844
2Q04
3Q04
1006
830
4Q04 lifted by staff
profit-sharing bonuses
and marketing costs
1Q04
1002
4Q04
As published (B-GAAP), KBC Old
862
822
IFRS reclassification as
of 1Q04: incl. operating
provisions
1Q04
2Q04
1Q05 down due to
cost cutting, low
provisioning & timing
differences
3Q04
4Q04
Pro forma (IFRS 2004), MergCo
1Q05
2Q05
IFRS 2005
28
Impairments - reconciliation
Under IFRS, no further
amortization of
goodwill (avg. 10m/Q)
152
11 m real-estate
impairments
123
119
31
1Q04: high equity
impairments (under
IFRS, impact not
compensated by writeback of dedicated
provisioning, as was the
case under B-GAAP)
90
KBL/Gevaert’s 18 m write-back
explains delta with B-GAAP
79
12
Zero credit-loss
provisioning
11
77
27
43
44
74
65
76
18
15
15
16
33
14
1Q04
11
2Q04
3Q04
4Q04KBL’s 10 m write-back
1Q04
explains delta with B-GAAP
As published (B-GAAP), KBC Old
2Q04
3Q04
KBL’s 10 m4Q04
provisioning
1Q05
2Q05
explains delta with B-GAAP
Pro forma (IFRS 2004), MergCo
IFRS 2005
29
Areas of activity overview, 1Q 2005 (1)
(in m euros and
% y-o-y)
Retail
CEE
SME/
Corp.
Markets
KBLepb
Gevaert
Total
Banking and AM
Gross income
Operating expenses
Associates
Income tax expense
Minority interests
Net profit – group share
659 (+13%)
- 371 (-2%)
0
(-)
- 87 (58%)
0
(-)
213 (47%)
522 (+47%)
-253
(6%)
1
(-)
- 59 (79%)
-25(-233%)
181 (157%)
258(+13%)
-94 (15%)
0
(-)
- 44 (15%)
0
(-)
123 (19%)
618 (-45%)
- 74
(-4%)
0
(-)
- 11 (-91%)
0
(-)
82 (-241%)
203 (13%)
- 41
(0%)
0
(-)
- 6 (-326%)
- 2 (-259%)
10 (-241%)
79
(-)
-8
(-)
0
(-)
-1
(-)
0
(-)
12 (-102%)
207 (-28%)
-93 (-38%)
0
(-)
- 40 (15%)
0 (-)
75 (19%)
211 (13%)
-134 (10%)
-1
(-)
- 21
(-)
-3
(-)
53 (22%)
1 608 (+1%)
-822 (-18%)
12 +20%)
- 218 (+59%)
-54 (+23%)
528 (+38%)
Insurance
Gross income
Operating expenses
Associates
Income tax expense
Minority interests
Net profit – group share
907 (+34%)
- 123 (-1%)
0
(-)
- 18 (64%)
0
(-)
122
(-)
Holding Co
Net profit – group share
32
- 18
32 (84%)
4%
13%
717 (91%)
Group total
Net profit – Group share
Share in group result
ROAC
295 (238%)
41%
33%
191(191%)
27%
66%
134 (24%)
19%
25%
75 (-15%)
10%
41%
53 (+22%)
7%
18%
24%
(1) excl. Non-allocated
30
CEE banking - I/S details, 1Q 2005
1Q 2005
CSOB
KB
K&H
Statutory accounts
Net interest income
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
123 884
3 513
18 912
4 319
57 693
114 448
50 413
0
11 509
1 463
16 227
3 360
53 478
13
25 276
-49
24 580
2 645
Gross income
322 769
82 972
105 942
-122 394
4 571
0
-53 537
-59 358
26
579
-1 332
-68 403
-9 669
736
-7 760
Net statutory profit
151 409
22 887
20 846
Profit contibution to Group
Net statutory profit
Consolidation adjustments
Minority Interests
Results of capital allocation
147 715
151 409
19 057
-16 943
- 5 807
17 112
22 887
- 509
- 2 895
- 2 372
7 416
20 846
- 497
5 083
- 7 850
Profit contribution, Group share
ROAC
ROI
147 715
120%
34%
17 112
32%
11%
7 416
17%
15%
Operating Expenses
Impairments
Share in result of associated companies
Taxes
NLB
23 083
8 423
31
IFRS balance sheet
01-Jan-05
IFRS 2005
in m euros
31-Dec-04
IFRS 2004
Loans and advances to customers
Securities
Loans and advances to banks
Derivative financial instruments
Property and equipment (excl invest. property)
Goodwill and other intangible fixed assets
Investments in associated companies
Other assets
111 177
98 862
38 463
15 376
2 300
1 086
1 228
16 671
Deposits from customers and debt securities
Deposits from banks
Derivative financial instruments
Gross technical provisions, insurance
Liabilities under investment contracts, insurance
Other liabilities
157 712
55 083
17 728
13 259
3 931
23 351
Total equity
- Parent company equity
- Minorities
Balance sheet total
14 099
12 328
1 771
285 163
Main
changes due
to
IAS 32/39
and IFRS 4
31-Mar-05
IFRS 2005
110 692
100 578
108 421
107 847
43 989
16 209
2 247
1 379
1 156
14 960
17 324
20 524
13 068
166 474
54 132
20 366
13 383
4 195
22 712
13 136
14 946
13 316
1 630
296 208
32
Composition of portfolios
Assets as at
31-Mar-05
Value at
31-03-05
Loans and
receivables
Mortgages, consumer credit
& corporate loans
HTM
instruments
AFS
instruments
121.9 bn
Amortized cost
(no impact from volatility
in valuation)
Bonds
9.6 bn
Amortized cost
(no impact from volatility
in valuation)
Bonds
Equity
38.2 bn
5.2 bn
Fair Value
(adjustments
recognized in
shareholders’ equity)
HFT instruments Trading portfolios & heding
derivatives
Financial
instruments
at Fair Value
Valuation (volatility
impact)
Loans
Bonds
Equity
62.2 bn
22.6 bn
21.5 bn
4.4 bn
Fair Value
(adjustments
in P&L)
33
Number of shares
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
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
Net profit
(in m EUR)
717
Basic number
of shares
357 990 384
Diluted number
of shares
368 187 859
Basic EPS
(euros)
2.00
Diluted EPS
(euros)
1.96
34
Financial highlights - 1Q 2005
Foto gebouw
- Group performance
- Headlines per segment
FY 2005 profit outlook
Additional information on 1Q 2005 results
2004 pro forma IFRS quarterly accounts
Important information

Pro forma figures 2004 are drafted according to the European IFRS. It is important
to highlight that the impact of IFRS 32/39 on the valuation of financial instruments
and of IFRS 4 on insurance contracts is therefore not included. As a result, the
2005 figures (which include the impact of the stated valuation rules) are not fully
comparable with 2004 pro forma figures.
36
Main changes in valuation rules, 2004
Compared with Belgian GAAP
Impact on
earnings
Presentation of own equity before profit appropriation
(instead of after profit appropriation)
Impact on
book value
Impact’s
start
X
2004
Stricter criteria for recognition of provisions (IAS 37)
X
X
2004
Recognition of deficit/excess of defined benefit pension plans
(DBP) (IAS 19)
X
X
2004
Broader criteria for recognition of deferred taxes (IAS12)
X
X
2004
Reclassification from operating to finance lease (IAS 17)
X
X
2004
Correction of depreciation of tangible assets and
capitalization of internal software (IAS 16/38)
X
X
2004
Impairment testing of goodwill and no further depreciation
(IAS 36 and IFRS 3)
X
X
2004
Other miscellaneous changes with limited impact, such as
inclusion of SPVs in scope of consolidation, etc.
X
X
2004
37
Main changes in valuation rules, 2005
Compared with IFRS 2004
Impact on
earnings
Impact on
book value
Impact
start
2005
Deposit accounting for unit-linked life products (IFRS 4)
Derecognition of catastrophe / equalisation provision (4)
X
X
2005
Insurance liability adequacy test (IFRS 4)
X
X
2005
Adjustment of loan losses (NPV-approach and recognition
of portfolio-based provisions) (IAS 32/39)
X
X
2005
Recognition impairments on equity investments (32/39)
X
X
2005
Deduction of treasury shares from own equity (32/39)
X
X
2005
Convertible bonds to be considered as own equity (32/39)
X
X
2005
X
2005
X
2005
X
2005
Marking-to-market,‘bonds available for sale’ (IAS 32/39)
Marking-to-market, ‘bonds at fair value’ (IAS 32/39)
X
Marking-to-market, ‘shares available for sale’ (IAS 32/39)
Marking-to-market, ‘shares at fair value’ (IAS 32/39)
X
X
2005
Marking-to-market, derivatives not held for trading (32/39)
X
X
2005
38
Reminder: impact on FY2004 accounts
Impact on own equity *
Impact on P/L *
in m EUR
-97
-67
in m EUR
Total
Profit
appropriation
Provisions
Provisions
-35
674
14
DBP
-450
Lease
DBP
0
Lease
Tangibles & intangibles
3
89
Goodwill
Tax deferals
-30
426
Total
2
Other
* Pro forma 2004 (excl. IAS 32/39 and IFRS 4) versus Belgian GAAP
9
Tangibles &
intangibles
81
Goodwill
80
Tax deferals
Other
11
7
39
Impact of IFRS standards on 1Q 2004
Impact on P/L 1Q04 *
in m EUR
-44
in m EUR
Total
22
Goodwill
0
Lease
-435
-14
13
84
19
Other
* Pro forma 2004 (excl. IAS 32/39 and IFRS 4) versus Belgian GAAP
8
DBP
Provisions
Provisions
Tax deferals
-236
Tangibles & intangibles
-21 DBP
-56
Total
Goodwill
6
Tangibles & intangibles
Lease
Impact on own equity 31Mar04*
55
Tax deferals
26
Other
13
40
IFRS quarterly income statements, 2004
GROUP TOTAL (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
995
1 275
25
224
193
357
106
966
1 404
121
191
60
324
113
910
901
39
123
93
323
128
963
1 577
46
187
157
399
132
3 833
5 158
231
725
503
1 404
479
Gross income
3 175
3 178
2 517
3 462
12 333
-1 269
-152
-33
-119
- 1 169
-5
20
602
-1 105
-90
-74
-12
-1 240
-22
-60
662
-1 147
-44
-15
-18
-771
-12
34
577
-1 424
-79
-76
-2
-1 454
-29
28
504
-4 944
-365
-198
-150
-4 633
-68
22
2 345
-170
-55
-177
-51
-155
-57
-35
-29
-537
-193
376
434
365
440
1 615
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
Profit before taxes
Income tax expense
Minority interests
Net profit
41
Banking - I/S details, 2004
BANKING SEGMENT (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
836
0
13
220
116
274
52
825
0
41
177
60
226
71
787
0
25
85
56
237
52
805
0
23
150
76
305
68
3 253
0
103
632
307
1 042
243
1 511
1 400
1 241
1 428
5 581
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
Profit before taxes
-989
-39
-42
3
0
0
10
493
-816
-72
-77
5
0
0
3
516
-848
-28
-14
0
0
0
19
383
-993
-80
-65
-15
0
0
3
358
-3 646
-220
-199
-7
0
0
35
1 750
Income tax expense
Minority interests
-117
-44
-108
-41
-93
-45
-3
-38
-320
-167
Net profit
332
367
246
318
1 263
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
Gross income
42
Insurance - I/S details, 2004
INSURANCE SEGMENT (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
102
1 275
5
2
64
-89
17
115
1 404
62
2
-2
-78
16
115
901
9
0
10
-88
32
131
1 577
9
0
49
-85
9
463
5 158
85
5
121
-340
75
Gross income
1 377
1 518
979
1 692
5 566
-124
-128
-1
-127
-1 169
-5
3
-45
-129
-36
-1
-35
-1 240
-22
7
98
-123
-27
1
-28
-771
-12
8
55
-135
29
-1
30
-1 454
-29
2
105
-511
-162
-2
-160
-4 633
-68
20
213
Income tax expense
Minority interests
-11
1
-35
-4
-23
-1
-16
-1
-86
-5
Net profit
-55
58
30
89
122
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
Profit before taxes
43
AM - I/S details, 2004
ASSET MANAGEMENT SEGMENT (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
0
0
3
0
0
76
0
0
0
1
4
1
86
1
0
0
0
1
1
86
1
2
0
9
5
0
87
0
2
0
13
10
3
335
2
Gross income
81
93
88
102
364
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
Profit before taxes
-13
2
0
2
0
0
0
70
-14
0
0
0
0
0
0
78
-14
1
0
1
0
0
0
75
-13
0
0
0
0
0
0
89
-54
2
0
0
0
0
0
312
Income tax expense
Minority interests
-19
0
-21
0
-21
0
-23
0
-84
0
51
58
53
66
228
Net profit
44
KBL - I/S details, 2004
KBL epb SEGMENT (in m euros)
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
Gross income
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
Profit before taxes
Income tax expense
Minority interests
Net profit
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
72
0
1
1
12
97
5
43
0
4
8
0
92
10
30
0
3
36
21
85
17
36
0
2
31
22
102
17
181
0
10
75
55
375
50
187
158
193
209
747
-122
13
10
4
0
0
0
78
-135
11
5
8
0
0
0
35
-140
11
-2
12
0
0
1
64
-236
-20
-10
-15
0
0
1
-46
-632
15
3
9
0
0
2
132
-22
-13
-7
-6
-16
-10
7
9
-38
-21
43
23
38
-30
74
45
Gevaert - I/S details, 2004
GEVAERT SEGMENT (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
-5
0
0
1
1
0
34
-5
0
3
0
1
0
18
-5
0
2
0
4
0
33
-4
0
0
2
9
0
36
-19
0
5
3
15
0
121
Gross income
32
17
33
43
126
-21
0
0
0
0
0
7
18
-18
7
0
10
0
0
-69
-63
-27
0
0
-3
0
0
6
13
-37
-5
0
1
0
0
21
22
-103
2
0
8
0
0
-35
-10
0
0
-2
0
-1
0
2
0
-2
0
17
-65
12
25
-12
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
Profit before taxes
Income tax expense
Minority interests
Net profit
46
Holding Co - I/S details, 2004
HOLDING CO SEGMENT (in m euros)
1Q 04
2Q 04
3Q 04
4Q 04
FY2004
Net interest income
Gross earned premium, insurance
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
-14
0
2
2
0
0
117
-14
0
10
0
0
0
121
-14
0
0
0
1
0
108
-13
0
2
0
0
0
123
-55
0
15
0
1
0
469
Gross income
105
117
96
113
430
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
Profit before taxes
-117
1
0
0
0
0
0
-13
-118
0
0
0
0
0
0
-2
-109
0
0
0
0
0
0
-13
-135
-3
0
-3
0
0
0
-25
-479
-3
0
-3
0
0
0
-52
0
0
0
0
-1
0
-2
0
-8
0
-12
-7
-13
-27
-59
Income tax expense
Minority interests
Net profit
47
CEE banking - I/S details, 1Q2004
1Q 2004 pro forma
CSOB
KB
K&H
Net Statutory profit
Net interest income
Dividend income
Net gains from financial instruments at fair value
Net realised gains from available for sale assets
Net fee and commission income
Other income
122 579
1 267
5 661
5 283
50 250
16 805
54 491
32
2 584
2 784
10 055
4 412
51 036
0
19 543
1 114
15 586
4 044
Gross income
201 844
74 358
91 323
- 114 043
- 3 708
0
- 28 216
- 59 559
- 2 111
2 168
- 740
- 63 211
9 128
559
- 6 621
Net statutory profit
55 877
14 115
31 179
Profit contibution to Group
Net statutory profit
Consolidation adjustments
Minority Interests
Results of capital allocation
42 027
55 877
- 639
- 7 697
- 5 514
10 146
14 115
- 360
- 3 124
- 485
11 631
31 179
- 347
- 7 973
- 11 228
Profit contribution, Group share
ROAC
ROI
42 027
44%
12%
10 146
25%
6%
11 631
29%
23%
Operating Expenses
Impairments
Share in result of associated companies
Taxes
NLB
6 383
48