Strategy updates Foto gebouw

2 Start of a new decade In Q1 2005, KBC merged with its parent company Almanij:  ‘Quick wins’ included: The re-rating of the share due to increased corporate transparency, company visibility and share liquidity Operational synergies, particularly in the field of wealth management  Further value-creating potential includes: shifting the earnings trend in the private banking area into a much higher gear Clearly, KBC continues to be ambitious and maintains its performance commitments in both Belgium and the CEE

3 The first harvest is in An initial layer of ‘merger benefits’ has already appeared: The ‘ugly duckling’ discount has disappeared (indication: at pre-merger price of 48 € - avg. 3Q04 - a hypothetical 10% discount represents 4.8 €/share - total 1.8 bn) Today, KBC has grown to 25 bn market cap with a ytd average daily trading turnover of 47 m (velocity, last 12 months: 50%) DJES Outperformance driven by strong fundamentals Outperformance facilitated by increased stock visibility and liquidity DJES Share price, 31 May 05, ytd (KBC +17% vs. DJES banks 4%) (Dec04 = 100)

4 Operational synergies - reminder Type of Benefits* €m Revenue (40%) Cost (60%) ICT & Overheads Asset Management Insurance Corporate Fin. Markets Securities Payments Cross Sales New Bus'ness Optimi- zation Pro- cure- ment People Source of Benefits* €m * Synergy benefits described as peak recurring annual increase in pre-tax bottom-line result (peak level as of 2009) nIn Q1 2005, we announced operational synergies in the areas of private banking and fund management of net 1.4 € / share - total 500 m (75 m pre-tax recurring per year, 50% of which as of 2006) Costs Avoided Total Securities

5 Operational synergies - update SYNERGY PLANACHIEVED IN 2Q 2005 No. of projects Recurring synergy O/w in 2005 O/w in 2006 Recurring synergies achieved Impact P&L 2005 IT and overheads Asset Management Insurance Corporates Financial markets Securities Payments m 16 m 9 m 8 m 7 m 5 m 1 m 3 m - 3 m - 2 m m 12 m 4 m 3 m 5 m 3 m - 3 m - 1 m TOTAL3375 m8 m37 m4 m In Q2 2005, group-wide risk management methodology implemented in enlarged Group nAt the same time, detailed implementation of synergy projects started: Agreed milestones and delivery profile for 33 projects Transparency on execution risks Incorporation into business & individual targets At end of Q2 2005, 4 m in recurring synergies already realized (6% of total) By end of 2005, 8 m is expected - in 2006, level will increase to 37 m

6 Gevaert portfolio - update P’folio Dec-04 Profit 2004 StrategyCompletion by Equity holdings in listed companies a. Held for trading b. Held as investment c. Agfa Gevaert (atypical) (2) (3) 17 m 578 m 854 m pm 20 m 42 m Integration into 'KBC Securities‘ Exit (sale on market) Exit (opportunistic) Q Q (1) At right moment Private equity holdings a. Private equity79 mpmIntegration into 'KBC Private Equity' (integrated portfolio 360 m) Q Real estate activities a. Real estate299mpmSelective integration into KBC BankQ (4) Specialized leasing activities a. Entertainment sector b. Railway freight cars c. Audiovisual material (vendor lease) 163 m 35 m 37 m 2 m 1 m 0.4 m Exit (if not successful: run-off) Exit (if not successful: run-off) Integration into KBC Lease Q Q Q 2006 Gevaert is expected to upstream ca. 300 m cash dividend in Q (1) 30 m capital gains realized in Q2 2005, excl. gains on KBL and KBC (150 m) eliminated in consolidated group P&L (2) Position of 34.1 m shares booked in KBC’s accounts at 17 euros/share (3) 2004 profit contribution (42 m) excludes one-off loss of consumer imaging (-81 m) and amortization of goodwill (-27 m) (4) Legal and practical winding-up and exit from discontinued operations may be drawn out

7 We build a solid future We still see a lot of ‘growth and value’ in our current strategic scope: Retail- and wealth-management-oriented, with focus on Belgium and CEE-5 and selected Western-European activities 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) Stable dividend policy and solid level of financial strength/solvency This outlook is reflected in ambitious financial targets, valid until 2008 In 2H 2005, we will re-assess our strategic horizons to ensure ‘growth and value’ post-2008 (project ‘next’)

8 Enhancing efficiency - banking Branch closures in Belgium IT integrations FTE reductions Impact of co-sourcing with 3 rd parties Cost savings due to ‘private banking hub’ Well on track to deliver on current 2005 cost/income target (58%) Adverse impact by Group enlargement and IFRS reclassificiations - new C/I target (58%) therefore more ambitious than previous target (58%) Cost/income, banking (KBC Old, GAAP) (KBC Mergco, IFRS) Further cost cutting in CEE Bus’ss-process simplification Centralized procurement

9 Enhancing efficiency - insurance Optimization of inbound R/I Increased underwriting discipline in CEE Pricing discipline (hard market) Increased price competition Further improvement in CEE Well on track to deliver on current 2005 combined ratio target (95%) Positive view on underlying drivers (market growth, claims frequency, claims inflation, etc.), but market is expected to soften - new C/R target (95%) therefore more ambitious than previous target (95%) Combined ratio, non-life KBC Old, GAAP KBC Mergco, IFRS

10 Enhancing bottom-line profit Sound business growth Strict cost management Risks adequately managed Expected to exceed current 2005 EPS growth target (10% CAGR) Downward impact of IFRS reclassificiations and Group enlargement Growth outlook: our reality check makes us believe a 10% CAGR is sustainable at least until growth target reconfirmed Earnings per share (KBC Old, GAAP) (KBC Mergco, IFRS) CAGR target +10% CAGR target > 10% * * Adjusted 2004 level after adding back 210 m in one-off charges 4.49

11 Securing financial strength In the last few years, we stayed above our minimum safety levels and accumulated excess capital for add-on investments in CEE Minimum solvency levels are maintained (8% Tier-1, banking – incl. 15% hybrid, and 200% solvency margin, insurance)* Solid earnings momentum Stable dividend payout range Recovery of capital markets * under Basel I / Solvency I regulatory frameworks

12 Securing financial strength Capital position as at 31 March 2005 Available capital 1 Surplus capital 2 Immediate free surplus 3 Banking10.7 bn2.1 bn1.5 bn Insurance2.8 bn1.2 bn0.4 bn Gevaert1.2 bn1.0 bn0.4 bn Total14.7 bn4.3 bn2.3 bn Internal capital budget requirements Deleveraging of the holding company0.4 – 0.6 bn Buy-out of 3 rd parties in CEE0.8 – 1.3 bn External growth in CEE1.0 – 2.0 bn 1 Regulatory capital under Basel I/Solvency I, (incl. hybrids and minority interests, after elimination of intangibles and goodwill) 2 Difference between available capital and internal minimum level 3 Surplus capital excl. adverse IFRS impact on Tier-1 (as of 2006), unrealized gains on tied-up assets and value of Agfa- Gevaert (timing of disposal uncertain)

13 Generating high return level Strong earnings growth (19% CAGR) Dividend payout of 40-45% Signifcant capital accumulation Sound EPS growth (>10% CAGR) Stable dividend policy Further accumulation of capital Well on track to exceed current 2005 ROE target (16%) Carry-on of excess capital for add-on investments in CEE and higher capital base according to IFRS - new ROE target (16% 1 ) is therefore more ambitious than previous target (16%) Return on equity (KBC Old, GAAP) (KBC Mergco, IFRS) 1 Equity excl. changes in revaluation reserve on AFS assets.

14 Financial targets - overview Efficiency:Cost/income, banking Combined ratio, non-life max. 58% (1) max. 95% (1) Financial strength: Tier-1, banking Solvency margin, insurance min. 8% (3) min. 200% (3) Value creation:Adjusted ROE (2) EPS growth (CAGR) min. 16% (1) Min. 10% (3) (1)By 2008 at the latest (2)Equity excl. change revaluation reserve AFS assets (3)For period

15 Assessing the Romanian opportunity Since the largest bank (BCR) is up for privatization now, we cannot postpone our views on this until our new strategy charter is defined in 2H05 (project ‘next’) Since optimization of CEE activities has progressed well and an immediate acquisition in Poland is rather unlikely, management capacity and capital gradually becomes available for new areas of investment At first sight, the BCR opportunity may be attractive and is in line with our past CEE strategy: Material size (5.5 bn assets) and dominant market position (29% share) Profitable franchise Possibility to pursue double-digit growth, based on fast growing market Possibility to focus on retail/SME Availability of an insurance operation, allowing start-up of bancassurance Progressive development in legal and political environment since EU accession schedule is expected In order to understand the opportunity fully, assess the risks and quantify the value-creation potential, KBC is studying the case