KBC Bank & Insurance Group Investor presentation Yearend

2 Contact information Visit Investor Relations Office : Luc Cool Nele Kindt Marina Kanamori Tel. : Ticker codes: KBC BB (Bloomberg) KBKBT BR (Reuters) B:KB (Datastream) ISIN code: BE

3 Disclaimer 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. ALTHOUGH THE STATEMENTS OF FACT IN THIS PRESENTATION HAVE BEEN OBTAINED FROM AND ARE BASED UPON SOURCES THAT KBC BELIEVES TO BE RELIABLE, KBC DO NOT GUARANTEE THEIR ACCURACY, AND ANY SUCH INFORMATION MAY BE CONDENSED OR INCOMPLETE. THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITH RESPECT TO OUR STRATEGIES AND EARNINGS DEVELOPMENT BY THEIR NATURE, THESE FORWARD- LOOKING STATEMNTS INVOLVE NUMEROUS ASSUMPTIONS, UNCERTAINTIES AND OPPORTUNITIES. 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 IS A SOPHISTICATED INVESTOR AND POSSESSES SUFFICIENT INVESTMENT EXPERTISE TO UNDERSTAND THE RISKS INVOLVED.

4 Table of contents 1.Company profile 2.Developments in Belgium 3.Developments in CEE

Company profile Foto gebouw 1

6 Top-20 player in Euroland banking (*) 1 BNP Paribas (35 bn)1 BNP Paribas (45 bn)1 BSCH (57 bn) 2 BSCH (31 bn)2 BSCH (45 bn)2 BNP Paribas (48 bn) 3 BBVA (29 bn)3 Deutsche Bank (38 bn)3 BBVA (42 bn) 4 Deutsche Bank (26 bn)4 BBVA (35 bn)4 Deutsche Bank (35 bn) 5 ABN AMRO (25 bn)5 Société Gén. (31 bn)5 Crédit Agricole (35 bn) 6 Société Gén. (24 bn)6 ABN AMRO (30 bn)6 Société Gén. (34 bn) 7 Unicredit (24 bn)7 Crédit Agricole (28 bn)7 ABN AMRO (32 bn) 8 Fortis (22 bn)8 Unicredit (27 bn)8 9 Crédit Agricole (14 bn)9 Fortis (21 bn)9 Fortis (26 bn) 10 Dexia (14 bn)10 Intesa BCI (18 bn)10 Intesa BCI (21 bn) 11 Intesa BCI (12 bn)11 Dexia (16 bn)11 Dexia (18 bn) 12 Allied Irish Banks (12 bn)12 San Paolo IMI (15 bn) 12 KBC (18 bn) 13 Bank of Ireland (10 bn) 13 KBC (11 bn) 13 San Paolo IMI (15 bn) 14 KBC (9 bn) 14 Bco Popular (11 bn)14 Allied Irish Banks (12 bn) 15 San Paolo IMI (9 bn)15 Allied Irish Banks (11 bn)15 HVB (12 bn) 16 Banco Popular (8 bn)16 Bank of Ireland (11 bn)16 Bank of Ireland (11 bn) 17 HVB (7 bn)17 HVB (10 bn)17 Bco Popular (10 bn) 18 Mediobanca (6 bn)18 Commerzbank (9 bn)18 Commerzbank (9 bn) 19 Bca MPS (6 bn)19 Mediobanca (7 bn)19 BA-CA (9 bn) 20 Bco Popular (5 bn)20 Bca MPS (6 bn)20 Mediobanca (9 bn) Dec 2002 Dec 2003 Nov 2004 (*) DJ Euro Stoxx Banks Constituents - Ranking by Market Capitalization – Situation as at 16 Nov 2004

7 Prominent player in 2 core markets KBC is a top financial player in Belgium and has succesfully expanded its operations in the 5 most advanced countries in CEE (new EU members) Besides these core markets, KBC is active in selected ‘other’ areas: international mid-corporate banking (mostly in W. Eur.) and financial markets As investments in CEE have continued to increase, the ‘other’ activities have been progressively scaled down Breakdown of revenue (9M 04) Treasury & other 9% CEE 25% Belgium 48% Financial markets 11% International corporate 7%

8 Top-3 player in Belgium Market share: (1) Consolidated banking landscape (80-90% of market held by Top-4) Market highly receptive to cross-selling of AM & insurance products KBC is particularly strong in the Northern region (one of the wealthiest regions in Europe) (1) Figures for Sources: FEBELFIN, KBC Asset Management, Uw Vermogen (Flemish investment journal)

9 KBC is one of the largest international players in the region In contrast to other players, KBC limits its presence to new EU Member States (the Czech and Slovak Republics, Hungary, Poland and Slovenia) and is active in both the banking and insurance fields Top-3 player in the CEE region International banks in CEE (by total assets, bn EUR) : Source: RZB – assets as at 31 Dec 03, ownership structure as at 30 Jun 04

10 Banking Insurance Slovakia: Market share: 6% (No. 4) Inhabitants: 5 m Total assets: 2 bn EUR Czech Republic: Market share: 18% (No. 1) Inhabitants: 10 m Total assets:18 bn EUR Poland: Market share: 5% (No. 8) Inhabitants: 38 m Total assets: 5 bn EUR Slovenia: Minority interest (34%) Inhabitants: 2 m Market share: 42% (No. 1) Czech Republic: Life M share: 7% (No. 4) Non-life M share: 4% (No. 6) Slovakia: Life M share: 4% (No. 8) Non-life M share: 1% (No. 6) Hungary: Life M share: 2% (No. 13) Non-life M share: 4% (No. 6) Poland: Life M share: 4% (No. 5) Non-life M share: 13% (No. 2) Slovenia: Life M share: 4% (No. 5) Top-3 position in the CEE region Hungary: Market share: 11% (No. 2) Inhabitants: 10 m Total assets: 6 bn EUR KBC invested ± 3.6 bn to acquire a prominent banking and insurance position in a growth market of ± 65 m inhabitants In Poland, KBC is looking for external growth in banking (lack of scale)

Developments in Belgium Foto gebouw 2

12 Nominal GDP growthSavings rate Do not underestimate the market KBC estimates, 2005EU forecast report Spring 04, % of GDP, 2003 Belgian GDP outgrowing European average (slightly) in Savings ratio amongst the highest in the world (every year, ca. 15% of disposable income flows into financial assets) Belgium’s high savings rate a key driver for sustained growth of the financial industry

13 KBC is well positioned AM and Life insurance markets growing at ca. 8-10% per year KBC outgrowing the market on the back of its favourable position: Especially strong in the (wealthy) Northern region Innovative product offering in retail AM (as a result, steadily increasing market share over the past 10 yrs. ) A differentiating bancassurance distribution model (on the back of which life reserves grew >20% p.a. over the last 3 yrs.) Life insurance, written premiums Retail AUM CAGR KBC +10% CAGR KBC +18% 1998 = 100 total market (LH) vs. KBC (RH)

14 Do not underestimate the market Mortgage loan growth Total market Source: ECB CAGR 9% Mortgage debt / GDP per capita Mortgages growing at 8-10% per year, driven by housing inflation (loan-to-value for new loans is typically 75%) Real estate prices still below other European markets, ensuring a) sustained mortgage growth and b) acceptable risk position More modest corporate loan growth, in line with nominal GDP growth trend (expected at 4.2 % in 2005) Source: NBB

15 Spreads on new mortgages Margin development KBC Spreads on new small business loans KBC Loan spreads increased substantialy (‘doubled’), following consolidation on market at the end of the ’90s Recently, renewed margin pressure on both the credit and deposit sides, since large players are eager to defend their market share KBC’s net-interest margin in Belgium currently at 1.97% (2.04% in ’03)

16 Do not underestimate the market Fee rates still ‘cheap’, allowing for further (gradual) repricing Greatest hindrance to repricing (probably) not from market competition, but from public opinion Core banking service fee rates World retail banking report (EFMA) EUR, 2003

17 Solid credit quality Non-secured retail loans / total loansLoan loss charges, KBC Market’s ‘savings culture’ implies low demand for unsecured consumer lending Commercial loan exposure well-diversified, spanning a large number of SMEs (limited number of very large corporates) Credit quality proven to be solid, with low loan loss charges over the cycle Source: central banks %, 2003 KBC (net provisions to gross loans)

18 Further cost reduction potential Cost/income, total market %, 2003 Banking Cost/income, KBC Belgium - 16 pp Retail banking (incl. AM) KBC committed to bring cost/income further down by Reducing product and business-process complexity (360 projects) Co-sourcing of back offices with other (international) banks, e.g.: ‘Orbay project’ with Rabobank (securities processing): unit cost to be reduced by 2/3, generating m recurring cost savings ‘Fin-Force project’ (cross-border payments) Similar areas

Developments in CEE Foto gebouw 3

e Above-average GDP growth Real GDP growth + inflation - KBC estimates 6.5% 8.7% 7.6% 7.3% Nominal GDP growth in 2005 expected at ca. 7% in the region, outgrowing EU level by ca. 3.5% GDP expected to outgrow European averages for a long time (similar to previous EU entrants)

Increasing product penetration Current level of financial intermediation and product penetration still low (e.g., 45% of the population in our markets have a bank account, 30% a savings account and 5% a mortgage loan) Levels steadily catching up with that of the EU Size of retail financial sector could multiply five-fold in 10 yrs. time, if financial assests to GDP were to reach current levels of S. Europe Deposits as % of GDP (EMU avg = 100)

22 Mortgage loan growth Strong momentum in retail business Mutual fund growth CAGR +48% Total market, 2003Total market CEE-3, in m EUR FEFSI Retail business growing at double-digit pace (albeit starting from a low basis), on the back of a) increasing disposable income and b) underpenetration of financial products This explains KBC’s (and other FIs) key focus on the retail market Corporate market more mature, including corporate loan growth, which is more in line with (higher) GDP growth trend NBP, NMB, CNB

23 Margin levels have been ‘normalizing’ Mortgage loan spreads NMB, NBP, CNB N/a Due to increased competition, margin pressure has already come through to a large extent KBC’s net-interest margin currently at 2.7% in CR/SR (vs. 2.5% in ’03), 3.8% in Hungary (vs. 4.0%) and 4.6% in Poland (vs. 4.9%) As rates continue to converge towards euro levels, somewhat more margin compression expected – to be offset by volume growth and fees Total market

24 Cost/income ratio Cost-reduction potential KBC C/I levels significantly down in the the last 2 yrs. (except in Poland) Still existing ‘efficiency gap’ vis-à-vis local market average, in the process of being closed In Poland, resolution to structural issue (lack of scale) may be critical

25 Expanded horizons in CEE paying off Ytd figures clearly illustrating internal return target of 17% is achievable (except in Poland) Since we are closing the efficiency gap, higher return in these market levels seems to be within reach (assuming stable cost of risk) In Poland, returns can be further increased, but ‘structural issue’ (scale) may be critical for creating value above cost of capital Contribution to Group: profit excl. minority interests and return on excess capital; incl. allocated Group overhead. In m EUR Stand- alone net profit Contribution to Group Contribution % y-o-y Return on allocated capital Return on invested capital CR/SLK (o/w SLK) %17%12% Hungary 65255%19%16% Poland %6% Slovenia % Banking results – 9M04

26 Update on restructuring efforts in Poland Risk issue adequately dealt with in 2003 Historic loan book ‘cleaned-up’ (one of the highest provision coverage rates on the market and ytd 04 provisions below market avg.) Risk management procedures upgraded and distressed asset portfolio closely monitored Cost basis significantly reduced: Centralization of back offices, outsourcing of non-core functions and divestiture of non-core assets (Ukraine, Lithuania, etc.) Headcount reduced by FTEs (-19%) Renewed focus on business development as of 2H04 Including intensive transfer of KBC know-how Acceleration in bancassurance and AM sales Key achievements : Clear profitability turnaround - Risk - Costs + Volumes

KBC Bank & Insurance Group Foto gebouw