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KBC Bank & Insurance Group General Meeting of Shareholders 26 April 2001.

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Presentation on theme: "KBC Bank & Insurance Group General Meeting of Shareholders 26 April 2001."— Presentation transcript:

1 KBC Bank & Insurance Group General Meeting of Shareholders 26 April 2001

2 2

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

4 4 Financial structure in the US, the UK and the euro zone (end of 1999) Outstanding bank loans Outstanding securities debt securities shares USUKEuro zone 77% 345% 166% 179% 124% 262% 64% 198% 132% 177% 90% 87% Table 1: As a % of GDP Source: own calculations on the basis of BIS, IMF and International Federation of Stock Exchanges (FIBV) data

5 5 Debt securities, non-financial companies Debt securities, financial institutions Government debt securities Shares Bank loans Proportion of bank loans, shares and debt securities (June 2000) Source: KBC calculations based on IMF, BIS and International Federation of Stock Exchanges (FIBV) data. Graph 1:

6 6 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-financial companies Source: KBC calculations based on BIS, IMF of International Federation Stock Exchanges (FIBV) data. Graph 2:

7 7 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 companies as a % of total bank loans, shares and debt securities issued by non-financial companies D P E I B F NL VK VS S 0 50 100 150 200 250 20304050607080 Institutional investors financial assets as a % of GDP Sources: OECD, Financial Market Trends, June 2000; IMF, BIS and International Federation of Stock Exchanges (FIBV). Graph 3:

8 8 Increase in direct recourse to the capital market by the private sector in the narrow sense Outstanding shares and debt securities issued by non-financial companies as a % of total outstanding bank loans, shares and debt securities issued by non-financial companies Source: IMF, BIS of International Federation Stock Exchanges (FIBV). As a % of the total Graph 4:

9 9 Equity underwriting in Europe Source: Thomson Financial Securities Data, Morgan Stanley Dean Witter Research in millions of USD Graph 5:

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

11 11 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

12 12 In millions of EUR 20001999 % 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 969.7 714.7 271.3 -16.33.26 0.9225 33.8 2.1 1820.7 1165.5 1520.9 876.7 320.6 -20.9 -31.8 6.09 3.90 1.065 35.2 1.6 87.7 20.2 112.8 22.7 18.2 - - 19.5 15.4 4.1 1.3 Highlights

13 13 Solid solvency ratios 2000 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% 23.3% 9.5% 16.0% 64.2% 307% 106.6% (1) excl. unrealized gains 1998 20.5% 7.4% 12.8% 63.6% 298% 106.1% 1999

14 14 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

15 15 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

16 16 Profit Contribution by Activity 19992000 353 452 20 66 109 148 91 131 91 173 306 196 +28% +230% +36% +44% +90% -36% In millions of EUR Retail bancassurance Central Europe Corporate services Asset management Market activities Group items % profit contribution 36% 39%2% 6%11% 13%9% 11%9% 15%32% 17%

17 17 Minimum Target Realized 31 Dec. 00 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% Overall financial targets

18 18 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

19 19 Banking Highlights 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

20 20 In millions of EUR 20001999 % 3868 -2524 1344 -565 207 986 -183 -88 715 4656 -3094 1562 -334 693 1922 -243 -158 1521 877 20.4 22.6 16.3 -41.0 - 95.0 32.8 - 112.7 22.7 Banking Summary Gross operating income General expenses Operating result Value adjustments and provisions Extraordinary result Profit before tax Taxes Minority interests Profit after tax Profit after tax excl. CCF

21 21 In millions of EUR +9% +37% +31% +13% +20.4% Total 3435 Total 3868 Total 4656 Banking Income Stream Other income8%8% Commission income20%22% Profit on financial transactions16%18% Net interest income (incl. dividends) 56%52% % of total income19992000

22 22 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 KBC Bank & Insurance group

23 23 Insurance Highlights 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

24 24 Insurance Overview In millions of EUR 2000 Net premiums Life Unit-linked Non-life Net technical charges Investment income General admin. expenses Operating result Non-recurring result Extraordinary result Profit before tax Taxes Minority interests Profit after tax 1999 2095 420 935 741 -2126 688 -344 314 16 -12 316 -41 -4 271 % 2651 423 1459 769 -2335 432 -374 374 25 -5 392 -74 2 321 26.5 0.7 56.1 3.8 9.8 -37.2 8.8 19.1 - - 29.6 80.3 - 18.2

25 25 Insurance Business mix 1999 Gross premiums 2144.5 million EUR fire 8% Accepted business 8% motor 12% Individual life 58% Group life 4% Other non-life 10% 2000 Gross premiums 2704.7 million EUR (+26.1%) Individual life65% Group life 4% Fire 7% Accepted business 6% Motor 10% Other non-life 8%

26 26 Retail Bancassurance in Belgium Cross-selling penetration Total clients bank 1 337 204 (=) Total clients insurance 743 716 (+6.1%) 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 510 896 Mutual clients

27 27 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 KBC Bank & Insurance group

28 28 Central Europe Poland Kredyt Bank Agropolisa Warta Czech & Slovak Rep. CSOB CSOB Pojistovna Patria Hungary K&H Bank K&H Bank after merger K&H Life Argosz 49.9%(+1.4%) 49.9%(+26.6%) 40.0%(+40%) 81.5%(-0.8%) 75.8%(=) 91.9% (+91.9%) 73.3%(+40.7%) 60% 50% 95.4%(=) Ownership (comp. '99) 213.4 7.2 123.2 1361.9 11.9 49.0 132.1 - 2.5 23.9 investment in millions of EUR 5.8% 0.6% 12% 23.4% 0.5% - 8.8% 15.1% 0.5% 3.1% market share Total amount invested : 2 bn EUR

29 29 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

30 30 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 KBC Bank & Insurance group

31 31 Key Figures per share 2000 Net profit Gross dividend (1) Net dividend per ordinary share Payout ratio 2.69 1.09 0.82 40.6% 3.90 1.42 1.065 36.4% (1) proposed (2) payable 30 April 2001 1998 3.26 1.23 0.9225 37.7% 1999 +19.5% +15.4% (2)

32 32 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% Information of shareholders

33 KBC Bank and Insurance Holding Company Company results

34 34 In millions of EUR20001999 % Dividend income Other income Interest charges Total gross income Staff and operating charges Operating result Taxes Extraordinary result Profit after tax Contribution to consol. result 382.8 0.5 -10.9 372.4 -2.2 370.2 -5.1 263.0 628.1 -16.3 KBC Bank and Insurance Holding Company Company results 462.8 0.2 -43.6 419.4 -3.8 415.6 5.1 10.5 431.2 -20.9 + 12.6% + 12.3% - 31.3% -

35 35 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 KBC Bank and Insurance Holding Company Proposed dividend and appropriation of profit

36 KBC Bank & Insurance Group General Meeting of Shareholders 26 April 2001


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