1. KBC Bank & Insurance Group Full-Year results 2003 Analysts briefing

2. 2 Content Question time Performance 2003, overview Performance, banking Performance, insurance

3. 3 Group result : up 8 % year-on-year Full-year results 2003 Q avg ‘01-’03 + 8% In m EUR + 1%

4. 4 1 0221 034 Net profit ROE banking : 11.3 % ROE insurance : 17.4 % ROE Group: 12.7 % 1 119 Performance 2003 +8% +1% Banking : strong year-on-year performance Insurance : pressure on investment income, though high level of return in m EUR

5. 5 Earnings growth peer group KBC DJ ES Banks DJ ES Insurance KBC Insurance KBC Banking Note : estimate 2003 DJ ES Banks at 20 Feb. 2004 by KBC Compared to the sector, earnings remained at a high level Earnings level 2000 = 100

6. 6 Performance 2003 Overall : Change yoy pre-tax Positive impact :(m EUR) Strong income trend for all basic banking activities (spread, commission) +232 Strong premium growth, insurance+330 Strong technical result, non-life+59 Good cost control, banking+56 Less impairments on equity portfolios, banking+238 Negative impact : Higher loan-loss provisions- 211 Less gains on (‘free’) bonds, banking-148 Less favourable trading results-135 Less investment income, insurance-54 Net profit :+85

7. 7 Performance 2003 Areas of activity : Robust performance in Belgium Further improving level of costs in banking (-5%) Strong commission (+22%) and premium income (+8%) and interest spread slightly increasing (2.01% versus 1.97% in ‘02) Low level of loan loss ratio (24 bp) and non-life claims ratio (59%) Satisfactory operating performance in most CEE markets ROAC for banking in Czech (CR) / Slovak republics (SR) : 17% ROAC for banking in Hungary : 8% (20% excl. K&H Equities case) Improving performance for insurance operations (still limited scale) Higher profit of corporates (+19%) and markets (+35%) … but still disappointing performance of banking business in Poland (high loan loss provisions: 365 m) Note : ROAC = return on allocated capital

8. 8 Growing dividend EUR Dividend per share : up 7.9% year-on-year Last 5 years : every year growing dividend (CAGR : 8.5%)

9. 9 Business highlights 2003 Enhancing efficiency in Belgium Strengthening the position in CEE Further downscaling of less-strategic areas Finalizing the merger Product complexity reduction program Pooling of back offices and co-sourcing of transaction processing Stronger governance model and controlling Intensified cross-border initiatives in such areas as e.g. card technology Restructuring program in Poland Majority stake in WARTA (Poland) Successful start of bancassurance in Slovenia Sale of retail activities in the Netherlands, broker-related consumer lending in Belgium, non-strategic operations in CEE (Ukraine, Lithuania)

10. 10 Performance 2003, overview Performance, banking Content Performance, insurance Question time

11. 11 Banking, income development Interest income : + 5% organically (margin : 1.67%  1.73%) Commission income : 12% organic growth (i.a. success of cap-guaranteed funds) Lower trading income due to i.e. lower FX income and MtM of equity derivatives Lower realized capital gains (250 m), mainly on the ‘free’ bond portfolio Lower dividends, ‘other income’ on a par with 2002 (strong leasing revenue) Total income -1% organically - 37% + 2% - 22% +15% Excluding capital gains, income + 1% 4 977 5 655 5 756

12. 12 Growth in banking assets Customer deposits (bn EUR) Customer loans (bn EUR) Note : mortgage growth adjusted for currency depreciations Customer deposits : up 5% (excl. repos) Shift to demand deposits Shift to life products and mutual funds Customer loans : organically flat (excl. repos) Strong organic mortgage growth :  Belgium :+ 10%  C/SR : + 36%  Hungary : + 69%  Poland : + 24% Corporate book (excl. repos) down 3 bn EUR, reflecting :  currency depreciations (2.4bn)  build down of ‘old book’ (IPB) in CR (1.7 bn) & in the Netherlands (0.4bn)  write-downs in Poland (0.3 bn)

13. 13 Banking, expense development Belgium : Expenditures : - 5% (- 105 m) Headcount reduction : target of 1 650 FTE (-12%) achieved Central and Eastern Europe : Expenditures : - 1% (-12 m) Headcount reduction :  CR (HQ) : 54% of target of 1 000 FTE (-27%) achieved  Poland : 28% of target of 1000/1200 FTE (-15%) achieved Other : Expenditures : + 14% (+60 m) Cost/Income ratio: 65% (65% for FY 02) 3 510 3 751 3 695 2001: KB only 4Q01 Ytd expenses (m EUR) Continuing cost control -1%

14. 14 Cost control in Belgium Merger completed, full extent of cost savings in bottom-line as of 1H 04 Lower cost/income ratio ahead, thanks to : Income growth Co-sourcing of transaction processing and pooling of back-office activities within the group and with third-parties Monitoring of real-estate-related and other non-FTE-costs Reduction in product complexity in retail Although Belgium is a ‘mature’ market, further growth and improvement in performance can be expected

15. 15 Reducing product complexity PlannedRealizedE xample : To do Example : Payment services 5924% N o of types of credit cards from 8 to 4 76% N o of transactions forms from 34 to 5 Investment products 12940% N o of types of savings accounts from 8 to 1 60% Reduction in highly complex orders Home, car and travel services 4538% No add’l floating rates for consumer loans 62% N o of types of mortgages from 50 to 15 Services to companies 13140% Reduction in interest rate formulas for cash facilities 60% Integrating 15 types of insurance policies in more comprehensive policies TOTAL364 37%63% Note : situation as of Feb-2004 Implementation running or further enquiry required

16. 16 Banking, loan provisions Customer loan book Gross loans Dec. 03 Loss ratio FY 03 Loss ratio FY 02 Belgium49.9 bn0.24%0.29% Hungary3.8 bn0.32%0.34% CR / SR6.0 bn0.34%-0.62% Poland3.8 bn8.68%4.20% International29.4 bn0.48%0.70% Total92.9 bn0.71%0.55% Loan loss provisions (m EUR) Loan loss ratio : 0.71% (0.55% for FY 02) Note : Loan loss = specific provisions to average gross outstanding loans Intensive clean-up of loan portfolio in Poland Loan loss ratio excl. Poland : 0.35% 676 321 465

17. 17 Note: Profit contribution excl. retail asset management and excl. retail insurance. Loan loss ratio on risk-weighted assets Retail banking in Belgium Return on allocated capital 14% 13% x5 16% FY profit, banking: 225 m, ROAC : up to 12% from 2% Income growth : + 10% (strong commission and rebound in interest) Cost reduction : - 7% Provisions remain low (21 bp) Marketing headlines 2004 : New customer acquisition Bancassurance Wealth management 2003 has seen a strong turnaround in Belgian retail on the back of robust commission income and cost savings Profit contribution after minorities

18. 18 Banking performance in CEE CR & SR : ROAC target of 17 % achieved in spite of pressure on margins (and fewer one-offs), thanks to commission income and modest expense growth Hungary : income and volume growth more than set off pressure on margin, but adverse impact of K&H Equities loss (pre-tax impact: 20 m) Poland : difficult economic conditions and high loan provisions due to thorough credit review (pre-tax impact 277m) Notes : profit contribution excl. minority interests. Change (%) adjusted for currency effect. Allocated capital: 7% on RWA + non-amortized goodwill. CEE 2 nd home In m EURFY 03% ChgROAC 03 CR / SR 143+0 %17% Hungary 13-13% (+97%)8% (20%) Poland -295-- Slovenia 10-- Contribution of banking operations to KBC Group profit Satisfactory performance in Czech Republic, Slovakia and Hungary (even further improvement expected). Polish turnaround being implemented

19. 19 CEE banking, share of group wallet Impact of paid goodwill Improved cost structure under way Heavy credit risk charge in Poland in 2003 Value-added products and commission income to grow Note : banking business lines, excluding group center FY03 earnings Pre-tax result

20. 20 Restructuring in Poland Capital base strengthened (265 m in 2 steps) Risk sensitivity greatly reduced Credit risk policies redefined and credit decision authority reduced ‘Historic’ loan book cleaned up Risk control and risk management improved Cost base to be further reduced Centralizing back offices, strengthening HR and performance measurement Reducing headcount (driven by new central IT system) by 1000/1200 FTE, real estate expenses (15-20 %) and other tangible costs (5-10%) by ‘04 Disinvesting non-strategic activities (Ukraine, Lithuania, PKB, Pension Fund,…) Market position to be improved on the retail market Thorough customer segmentation in the nationwide network Intensified transfer of product knowhow (AM, retail lending, bancassurance,…) Acceleration of bancassurance efforts with WARTA Insurance Profound restructuring plan being implemented Central Europe 2 nd home market

21. 21 Central Europe 2 nd home market Loan provisioning level in Poland Adequately provisioned compared to peer group Sources: companies’ financial reports and presentations (consolidated basis)

22. 22 Improving economic indicators Outlook : Economic growth is picking up Corporate tax reduction (to 19% in ’04) Credit demand is accelerating, notably mortgages/consumer lending Shift from deposits to funds (off-balance) is likely, compensating further margin pressure Poland GDP growth (y/y)

23. 23 Situation as of Dec 2002 : the network model CEE, governance model - 2002 CEE Group companies Co-ordination Unit CEE Insurance (2) Business co-ordinators (12) KBC expats (31) Co-ordination Unit CEE Banking (1) Moreover : audit and market and credit risk managment centralized (for credit risk in Poland only from end of 2002) Executive Committee Management Committee CEE (5) Initiating and followup of : Transfer of knowhow Shared business projects

24. 24 CEE, governance model - 2003 Executive Committee Management Committee CEE (6) General Manager CEE (1) Controlling Unit CEE (5) Steering committees Co-ordination Unit CEE (8) Business co-ordinators (22) & task forces CEE Performance monitoring CEE Group companies KBC expats (44) Day-to-day management Steering of business projects Initiating and followup of : Transfer of knowhow Business projects Uniform methodology Key elements : because of increased importance of 2 nd home market : Increased management involvement Intensified follow-up Renewed model, situation as of Dec. 2003

25. 25 Asset Management division FY profit : 116 m (stable) : income pressure (market context) compensated by lower costs and taxes AUM : + 10% Retail assets : 10%  including retail funds : + 11%  of which : ± 5% net inflow Institutional (3rd party): + 6% Group assets : + 18% Note: As of 2004, in financial reporting, incorporated in retail / corporate area Assets under management (in bn EUR) 82 81 89 Retail Corporate Belgium : 87 % Central Europe : 5 % +10%

26. 26 FY profit : 220 m, + 7% Cost decrease (- 6%) due to strict cost control, especially in Belgium / Western Europe Strong income growth in leasing, Ireland, diamond sector but no repeat of 2002 one-off revenues. As a balance, income down 2% Lower provisions for problem loans, i.a. in traditional banking in the US Corporate banking division Profit contribution corporate banking (in m EUR, excl. minorities) +7% Details on corporate activities (m EUR)

27. 27 Financial markets division FY profit : 125 m (+ 35%) Money and capital markets : strong performance (+ 43%) Equity trading : substantial loss situation reversed Derivatives : satisfactory result but negative MtM for long derivatives Profit contribution market activities (excl. minorities): Details on market activities : FY 01FY 02FY 03 m EUR Note: including trading-, interest and commission income from market activities,excluding trading income in CEE and related to treasury and investment book +35%

28. 28 Faster asset growth in line with expected 'faster' GDP growth : Full year impact of deposit rate cut in Belgium (if competition / capital market levels allow rates to be stable) and positive impact from higher interest rates/steeper yield curve Asset Management driven by ‘private pension building’ and expansion in CEE Expected higher contribution from equity subsidiaries Cost control : In Belgium : full impact of merger synergies + sustained cost discipline In CEE : efficiency programs in progress Cost sensitivity in all divisions Strong decrease in loan loss levels : Towards a 'normalized' level in Poland (versus 365 in 2003) Going forward, 2004 2004Real growth GDPInflation10y-yield Belgium CEE 0.9%  1.8% 2.5 / 4%  3.5 / 4.5% 1.3%  1% Diverse 4.1%  4.5% Diverse

29. 29 Performance 2003, overview Performance, banking Content Performance, insurance Question time

30. 30 Underwriting result, life FY 03 : 5% CEE Premiums ytd 8% organic growth FY 03 : 95% Belgium Very strong growth (bancassurance-driven) and shift to non-linked products Guaranteed rate (10y) in Belgium : 1H 03 : 3.25% 2H 03 : 2.75% Net premium income Total FY 01: 1 689 Total FY 02: 2 246 Total FY 03: 2 438

31. 31 Underwriting result, non-life Very low level Combined ratio Premiums +15% organically 104% 105% 96% 821 910 1 048 Very sound business, partly driven by upward trend in rates and by strong risk and cost discipline Net premium income

32. 32 Cross selling, bancassurance Clients with both banking and insurance products sold by KBC (Belgium) Cross selling 2003, Belgium : Mortgage / fire insurance :50% Mortgage / death cover :67% Consumer loan / death cover :66% Cross selling continues

33. 33 Insurance, investment income FY 02FY 03  Interest, dividend, rent 449455+1% Capital gains on shares 198138-30% Total647593-8% Investment return in FY 03 down to 5.9% from 7.2 % Suffering from low investment yields Note: capital gains on shares: 5.30 % on portfolio value (incl. write-back from provision for financial risk at 45 m in ‘03), excl. value adjustments for unit-linked products. Planned recurring value gains on shares in 2004 : 4.75 % on market value of portfolio.

34. 34 Insurance in CEE, overview Premium 2003 Premium growth Profit contribution 2002 Profit contribution 2003 Czech Republic 165+9%-12.1-1.6 Hungary67+40%1.70.3 Slovak Republic 22---0.3 Poland440--6.2-1.9 Slovenia 10---0.8 Startup in 2003 : retail market share from zero to ± 4% Acquired at the end of 2002 Note : premium growth adjusted for changes in currency value. Profit contribution to KBC result after minorities. Bancassurance models now set up in all target countries, but looking for more significant scale Majority since end of 2003

35. 35 Insurance in CEE, Poland WARTA Market position : Market share, non-life : 13 % (no 2) Nation-wide coverage Customers : ± 1.5 m Workforce : ± 4 000 FTE Premium income 2003 : 330 m EUR non-life 110 m EUR life Individual : 65% of premium income Leading product : motor insurance KBC’s footprint : 2000 : First stake (40%) 2003 : Majority stake (51%) 2004 : Clear control (75%) Strategic focus : Optimization of agency sales network Intensifiying bancassurance with KB Stronger expansion to small-sized enterprises Centralization of back-office activities and sustained cost discipline Majority in WARTA (Poland), important leverage of scale for KBC’s insurance activities in CEE Poland

36. 36 Insurance, non-recurring items In m EURFY 02FY 03 Non-recurring result : Value adjustments, shares- 299- 96 Non-recurring gains on securities+113+122 Other (write-back from egalization reserve in ’03 and other) +38+ 79 Transfer from (to) provision for fin. risks+157-140 Total non-recurring result9-35 Note: provision for financial risks, balance at 31 Dec. 2003 : 93 m EUR Non-recurring income offset by value adjustments and allocation to the provision for financial risks

37. 37 Going forward, 2004 Full consolidation of WARTA Insurance (premium line impact : 435 m) Organic premium growth : sustained high single-digit growth, driven by Successful bancassurance model Consumer trend for ‘private pension building’ (life) Sustained good technical results (though '03 was ‘very’ good) Mitigated pressure on investment income Impairments on equity portfolio 2004 : In m EUR Market level Dec 2003 + 5%+ 10%+ 15% Expected impairments190170150130 Available provision for fin. risks93 Potential impact on P/L97775737 Available non-realized value gains 115175240300 Note : Available non-realized value gains in excess of 'normal' level of value gains of ±125 m (at 4.75% of market value of portfolio)

38. 38 Emile CelisChristian DefrancqJan VanhevelGuido Segers Herman AgneessensAndré BergenWilly DuronFrans Florquin Q&A session Teleconference with live audience in Brussels Analysts who want to participate in the conference call, please dial the number given in the invitation

39. 39 Group CEO Head of insurance business Deputy Group CEO Head of banking business Co-ordination CEE Retail bancassurance HRM and Communication Group CFRO Transaction processing Non-life & reinsurance Claims management Corporate banking West-European, US & SE Asian bank network Retail credit Information technology Insurance subsidiaries Treasury & markets Asset Management International credit Emile CelisChristian DefrancqJan VanhevelGuido Segers Analysts who want to participate in the conference call, please dial the number given in the invitation Herman AgneessensAndré BergenWilly DuronFrans Florquin Q&A session Teleconference with live audience in Brussels