KBC Bank & Insurance Group

KBCBank & Insurance Group

Full year results 2001

Brussels4 March 2002

2

KBC Bank & Insurance Group

Group results and key features

Results - Banking

Results - Insurance

Profit contribution by activity

Outlook

3

In millions of EUR 20012000 %

Consolidated profit - Group share (1)

- Banking- Insurance- Holding company

Key figures per share (in EUR)- Net earnings- Net asset value

- Net dividend- Pay-out ratio

1 165.5876.7320.6-31.8

3.90 35.2 1.065 36.4%

-12.3-20.412.2

-10.3

-13.0-4.04.2

-

1 022.4697.6359.9-35.1

3.3933.8

1.11 43.6%

(1) figures for 2000 excl. capital gain on CCF

KBC Bank & Insurance GroupKey figures

4

371

260

631

186

349

1166

1Q 00 2Q 00 1H 00 3Q 00 4Q 00 Y00

In m EUR

355

230

585

159

278

1022

1Q 01 2Q 01 1H 01 3Q 01 4Q 01 Y01

-12.3%

KBC Bank & Insurance GroupNet group profit per quarter

5

KBC Bank & Insurance GroupQ4 2001 Key developments

Positive developments Slight recovery of financial markets

Write back of unrealized valuation losses on shares Better performance of equity and derivatives subsidiaries Recovery of unit-linked sales (+ 35% versus Q3)

Higher interest income : + 4.7% (excl. KB Poland) Capital gains on fixed-income securities Strong performance of non-life business due to fewer

claims in reinsurance

Negative developments Higher specific loan provisioning Cost increase : excl. one-off items + 15%

Full consolidation of Kredyt Bank Poland

6

KBC Bank & Insurance GroupGroup profit and profitability

798

9701165.5 1022.4

1998 1999 2000 2001

Net profit ROE

+12.8%

+21.6%

16.1%

20.5%23.3%

In m

illio

ns o

f E

UR

+20.2%-12.3%

17.3%

7

KBC Bank & Insurance GroupFY 2001 key developments

Positive developments Increase in market shares Positive development of the profit contribution by Central Europe 2.5 bn EUR growth in assets under management Efficiency

Organic cost development in banking improving : + 3.3% Combined ratio in insurance at 103.8% approaching the 2004 target

Strong solvency ratios Strenghtening of pure equity by transfer of FGBR

Negative developments Unfavourable market conditions for volatile revenue components

Commission income : - 12% (organic) Negative result for equity and derivatives subsidiaries Unit-linked premium income : - 15.7%

High loan provisioning

8

KBC Bank & Insurance GroupSustained solid solvency ratios

2000

Bank Tier-1 ratio CAD ratio

Insurance Solvency ratio (*)

7.2%

11.5%

311%

9.5%

16.0%

307%

(*) excluding unrealized capital gains

1998

7.4%

12.8%

298%

1999 2001

8.8%

14.7%

318%

Decrease of solvency ratios in banking due to widening of scope of consolidation

9



Results - Banking

Results - Insurance


Outlook

10

In millions of EUR 2001

Gross operating incomeGeneral admin. expenses

Operating result

Value adjustments and provisionsExtraordinary result

Profit before tax

Taxes

Minority interests

Profit after tax

2000 %

4656-3094

1562

-334

49

1277

-243

-158

877 (1)

4977-3510

1467

-376

80

1171

-313

-160

698

6.913.4

-6.1

12.8

-

-8.4

28.8

1.5

-20.4

BankingSummary

(1) excl. capital gain on CCF

Org. %

-1.43.3

-10.9

-4.5

-

-9.5

19.1

1.5

-18.9

11

1960

732

610133

2157

636

756

319

2437

836

1034

349

2662

885

1057

374

1998 1999 2000 2001

In m

illio

ns o

f E

UR

Total3435

Total3868

Total4656

Total4977

Other incomeCommission income Profit on financial transactions Net interest income (incl. dividends)

% of total income 1999 2000 20018%

20%16%56%

8%

21%18%53%

8%

22%18%52%

7.1%

2.2%

5.9%

9.2%

BankingIncome Stream

12

BankingStaff charges

988

687

0

1015

703

125

2000 2001

+2.7%

+2.3%

In m

illio

ns o

f E

UR

Total : 1675Total : 1843 (10%)

Increase at KBC Belgium of 27 m EUR due to :Inflation : 20.5 mFTE : 13.8 mOther : - 7.3 m

KBC Belgium

Other

Change ofconsol.Scope

13

605

814

0

610

870

187

2000 2001

In m

illio

ns o

f E

UR +0.8%

BankingOther operating expenses

Increase at other companies of 6.9% or 56 m EUR due to :KBC Lease : 29 mKBC FP : 11 mKBC AM : 3 m

Total : 1667 (+17.5%)+6.9%

Total : 1419

KBC Belgium

Other

Change ofconsol.Scope

expansion of activities

14

KBC Bank & Insurance GroupCost/Income ratio

2000

As published

At unchanged scope of consolidation

Taking into account 2004projected cost savings• Staff charges : 115 m EUR• IT : 89 m EUR• Other : 20 m EUR

1999

65.3% 70.5%

69.7%

66.0%

66.5%

2001

15

BankingProvisioning for credit risks

Specific provisions

DomesticInternational

of which Kredyt Bank

Other general provisions for credit risks

Loan loss ratio

DomesticInternational

Non-performing ratio

In millions of EUR 20001999 2001

285.1

252.632.5

-43.8

0.53%0.09%

2.1%

270.4

103.2167.1

71.2

0.24%0.48%

2.1%

330.7

166.6164.1

39.0

-9.3

0.35%0.38%

2.8%

Increase of non-performing ratio due to Kredyt Bank Poland : + 0.4% ptOrganic : + 0.3% pt

16



Results - Banking

Results - Insurance


Outlook

17

InsuranceSummary

In millions of EUR 2001Non-life premium incomeLife premium incomeNet technical charges (*)Investment income (*) Total gross margin

General expenses

Recurring result

Non-recurr. and extraord. result

Profit before tax

Taxes

Minority interests

Profit after tax

2000 %820

1 688-2 330

631 809

-409

401

6

407

-51

4

360

7691 881

-2 517615 748

-376

372

20

392

-74

2

321

6.6-9.9-7.42.6 8.2

8.7

7.7

-

3.8

-30.4

-

12.2

(*) excl. impact of value changes of unit-linked products

18

InsuranceEvolution of gross premiums

408 408 438

935

1459

1229

787 819876

16 19 27

Trad. Life Unit-Linked Non-Life Acceptances

31-12-99

31-12-00

31-12-01-15.7%

+7.1%

+7%

+44.5%

In m

illio

ns o

f E

UR

19

KBC Bank & Insurance GroupEfficiency Ratios

2000

Non-life

° Net expense ratio

Net loss ratio (total)

Net loss ratio (direct business)

Combined ratio

Target by 2004

1999

33.6%

72.5%

70.2%

106.1%

34.4%

69.4%

63.9%

103.8%

103.0%

34.0%

72.6%

66.6%

106.6%

2001

Combined ratio target for 2004almost achieved

20

101

117

19

117

128

27

161

125

35

174

140

47

1998 1999 2000 2001

Total237

Total272

Total321

Total361

Non-technical Non-life Life

% of total recurring result 1999 2000 200110%

47%37%

11%

39%50%

13%39%48%

InsuranceContribution to net group profit

In m

illio

ns o

f E

UR

+34%

+12%

+8.1%

21



Results - Banking

Results - Insurance

Activities Retail bancassurance Corporate services Market activities Central Europe Asset management

Outlook

22

Profit Contribution by Activity

31-12-00 : 1181 m EUR

31-12-01 : 1022 m EUR

Retailbancassurance

CentralEurope

Corporateservices

Assetmanagement

Marketactivities

Groupitems

% profit contribution 36% 36% 13% 21% 19% 5% 7% 12% 9% 9% 15% 16%

-13.7%

+43.3%

-79.6%

+38.4%

-12.6%

-4.3%

In m

illio

ns o

f E

UR

422

364

147

211228

47

100

138109

95

168175

23

Retail Bancassurance

(1) KBC estimates

Financial highlights

Profit contribution :(in m EUR)

2000 : 422 2001 : 364

Share in Group profit :

2000 : 35.7% 2001 : 35.6%

Return on equity :

2000 : 16.2% 2001 : 13.9%

2001 : Stable interest income but negative impact

of stock market climate on commission income Slightly higher costs

Market shares(1) on the rise (from 12/00) Consumer credit : 26.1%+0.3% pts Home loans : 25.6%+0.5% pts Savings deposits : 20.0% +0.6% pts Savings certificates : 17.8% - 0.1% pts Unit-linked prod. : 20.2% +0.5% pts

Positive development of cross-selling 555 200 mutual clients buying 1 insurance

and 1 bankproduct (+ 4.2% versus Dec. 2000)

Merger process on track

24

KBC Bank & Insurance Group Merger in Belgium on track

Conversion and integration at insurance company completed

Merger in KBC Bank to be completed by 2004 Closure of bank branches

1998 : 1500 branches 350 branches already closed, leaving 1150 at end 2001 Target by 2004 : 850 branches to remain

Creation of 1 IT platform IT workload almost completed 2 250 000 clients already served on new platform,

still 300 000 ex-KB clients to be migrated (target date mid 2004)

Reduction of workforce Gradual reduction by 1650 (11%) by end of 2004

25

Corporate services

2001 Increase of gross operating income (+ 9%)

Higher interest income Higher commission income Lower income from corporate finance

Higher operating expenses (+ 9%) Higher loan provisioning (+ 25%)

from 202 m EUR to 252 m EURalso resulting in lower taxes

Strategic reduction of risk weighted assets continued (- 9.5% or 4 bn EUR)

Increase in domestic market share (1) in lending end 2000 : 20.7% end 2001 : 22.5%


Profit contribution :(in m Eur)

2000 : 147.4 2001 : 211.1


2000 : 12.5% 2001 : 21.1%

Return on equity :

2000 : 5.7% 2001 : 8.3%

(1) KBC estimates

26

Market activities

2001: profit contribution 80% lower Strong performance of dealing rooms (95 m

EUR) in Belgium but especially abroad Weakness of stock markets reflected in

negative results of equity subsidiaries KBC Securities (- 14 m EUR) and KBC Financial Products

Convertible bonds + 11 m EUR Derivatives - 32 m EUR Other - 14 m EUR


Profit contribution :(in m Eur)

2000 : 228.2 2001 : 46.5


2000 : 19.3% 2001 : 4.5%

Return on equity :

2000 : 20.5% 2001 : 4.1%

27

Central EuropeDevelopments in 2001

Czech & Slovak Republic Integration of bank distribution networks of

CSOB and IPB completed Feb. 2002 : acquisition of 65% of IPB Pojist'ovna Increase of stake in CSOB Pojist'ovna to 100%

Investment by KBC : 3.6 m EUR 2002 : planned integration of insurance companies

Poland Increase of stake in Kredyt Bank Poland

from 49.9% to 56.6% Investment by KBC : 60 m EUR (incl. capital increase)

Total investments in C.E. to date : 2.2 bn EUR

28

Hungary July 2001 : merger of K&H Bank with

ABN AMRO Magyar. Investment by KBC : 141 m EURCompletion of merger by mid 2002 ahead of schedule

Slovenia End 2001 - March 2002 : Binding offer on

Nova Ljubljanska Banka (NLB) for 34% stake.Exclusive negotiations with Slovenian government.

Central EuropeDevelopments in 2001

29

Central Europe

20012000 %

Profit contribution (*) (in m EUR)Share in group profitReturn on Equity

99.67.3%8.4%

38.4%137.911.5%

7.5%(*) before deduction of minorities

%excl. changes

18%

Non-performing ratio• K&H Bank• CSOB• Kredyt Bank

1.8%2.6%

11.6%

Profit contribution• CSOB • K&H Bank• Kredyt Bank• Insurance subsidiaries• Overhead

164.5-1.0

-12.2-3.2

-10.1

107.0-0.38.4

-2.4-13.0

30

Asset Management


Profit contribution :(in m EUR)

2000 : 109 2001 : 95


2000 : 9.2% 2001 : 9.3%

2001 Growth of operating income (+ 3%) in line

with growth of AUM Profit contribution 12.6% lower due

to higher costs

Increase in assets under management, notwithstanding difficult market conditions

3.7% rise in 2001 increase in volume (4.5 bn EUR) more than offsets decrease in value (- 2.2 bn EUR)

Largest Belgian player in mutual funds market share : 29.3% Dec. 2001 54% market share in capital-guaranteed funds

31

Asset ManagementFurther growth in assets under management

23.9

2.84.4

27.4

4.64.8

34.5

12.2

5.3

40.2

24.3

5.1

42.2

24.3

4.7

1997 1998 1999 2000 2001

31.1

36.8 (+18.3%)

51.9 (+41%)

In b

illio

n s o

f E

UR

69.6 (+34.1%)

Private Banking Institutional funds

Mutual funds

% of total AUM 1999 2000 2001

71.1 (+2.2%)

7%34%59%

10%23%66%

7%35%58%

32



Results - Banking

Results - Insurance


Outlook

33

Outlook 2002

Economic climate and market conditions remain uncertain Asset quality ? Equity related activities ?

Expected growth of interest income

Merger related savings will have positive impact on costs

Overall profit outlook uncertain

34

19991998

Net profit

P/E

Gross dividend

Pay-out ratio

Net asset value

Price / NAV

2.69

25.0

1.09

40.6%

32.3

2.1

3.26

16.4

1.23

37.7%

33.8

1.6

2000

3.90

11.8

1.42

36.4%

35.2

1.3

KBC Bank & Insurance GroupKey figures per share

2001

3.39

11.1

1.48

43.6%

33.8

1.1

KBCBank & Insurance Group

Full year results 2001

Brussels4 March 2002

KBC Bank & Insurance Group

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