KBC Group

“Is Benelux boring?”UBS Benelux Financials Conference, September 2006

2

Important information for investors

This presentation is provided for informational purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by the KBC Group.

KBC believes that this presentation is reliable, although the information is condensed and therefore incomplete.

This presentation contains forward-looking statements, involving numerous assumptions and uncertainties. The risk exists that these statements may not be fulfilled and that future developments differ materially. Moreover, KBC does not undertake any obligation to update the presentation in line with new developments.

By reading this presentation, each investor is deemed to represent that it possesses sufficient expertise to understand the risks involved.

3

Contents

The Benelux demystified What makes KBC different Conclusions

4

The Benelux “demystified”

There are many common misunderstandings about the Benelux market.I would like to invite you to identify the valid and false statements:

The Benelux is a small market The Benelux is a “consolidated” market The Benelux is a “low growth” market The Benelux ia a “low efficiency / high cost” market The Benelux is a low risk market The Benelux is a “low margin / low profitability” market

5

Is the Be(ne)lux a small market ?

Banking assets per capita in the Benelux are at the high end of the European spectrum, higher than e.g. France and Germany

As a consequence, unlike the limited number of inhabitants, total banking assets in the Benelux are approx. 1.5 times higher than in countries like Spain and Italy

However, “the Benelux market does not exist”. It comprises3 sovereign states, 3 languages, 3 markets with different players and different characteristics and dynamics

KBC is a Belux player, operating on the Belgian market with a significant (off-shore) wealth-management presence in Luxembourg

0

2040

6080

100120

140

IT SP FR GE BE NL UK LU

Banking assets per capita(in ‘000 euros)

Avg EU12

1 600

1 500

0

5

10

15

20

25

NL SP GE IT UK FR BE

Mutual funds, AUM per capita(in ‘000 euros) – May 2006

Source: ECB Source: Feri FMI

6

Is Belgium a consolidated market ?

Concentration is high, with top-5 institutions holding appx. 85% of the market

In Belgium, the bancassurance model prevails (all important players are bancassurers) and cross selling rates typically are very high:

0%

20%

40%

60%

80%

100%

Savings deposits Mortgages Mutual funds

Market share of 4 largest Belgian banks

0%

20%

40%

60%

80%

100%

GE IT LU UK SP FR NL BE

Share of the 5 largest banks in total assets

Avg EU12

banking products X mortgages X asset management X insurance

Source: ECB Source: Annual reports

7

Is Belgium a low growth market ?

Belgium has experienced “high” growth in many fields

Core growth drivers are:• House price inflation (from low average

house price levels) driving mortgage book growth and, consequently, building the basis for further cross selling

• High savings rate, historic low private pension building and muted popularity of offshore investments driving wealth management growth

Shift from traditional customer deposits to off-balance sheet products (incl. unit-linked Life) driven by “overliquid” bank balance sheets (sector average loans to deposits at 75%)

KBC, Belgium,% y/y

Total loans

Mortgages

Customer deposits

Life reserves

Assets under management

Growth, 1H06 +9% +15% +3% +34% +21%

Growth, 2005 +8% +16% +4% +38% +31%

Growth, 2004 +5% +9% +10% +28% +20%

0

10000

20000

30000

40000

50000

60000

70000

80000

NL SP UK GE IT BE FR

Mutual funds, AUM, est. net sales(in m euros)June 2005 - May 2006

Source: Feri FMI

8

Is Belgium a high cost market ?

Average staff cost tends to be high with high fiscal/social securities charges and high proportion of higher-educated (better paid) staff

Nevertheless, productivity gains have brought C/I levels to decent averages (however, best-in-class C/I levels, such as e.g. in the UK and Spain seem to be out of reach)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 1H06

KBC, Cost/income ratio, Belgium

0

0.1

0.2

0.3

0.4

0.5

0.6

NL UK FR BE IT GE LU

Branches/’ 000 population

Source: ECB

9

Is Belgium a low risk area ?

The (private) economy is moderately leveraged:• Household and corporate loans to GDP: 70% (vs. 95% average in Europe)• Savings rate is high – has been for decades amongst the highest in Europe

Credit exposure is well-diversified:• Mostly retail / SME business• The number of corporates with a market cap > 1 bn is only 30

0.24% 0.23%

0.32%

0.29%

0.24%

0.09%

0.03% 0.02%

1999 2000 * 2001 2002 2003 2004 2005 1H06

KBC, loan loss ratio, Belgium

0%

50%

100%

150%

200%

250%

BE IT FR GE NL SP UK LU

Private loans to GDP

Avg EU12

* restated

Source: ECB

10

Is Belgium a low profit market ?

NIM in Belgium is at the low side (1.94% at KBC in 6M06) due to:• The high government bond portfolios (reinvestment of excess of deposits)• Competitive presssure in the mortgage field

However, NI spreads are not a good denominator for profitability:• Risk is low -> please look at risk-adjusted margins• Cross selling (F&C income) is high:

– Explains why competition in ‘customer binding products’ such as mortgages is high

– Far less price competition in Fee & Commission generating products– Gross margin (incl. F&C) to RWA was at ca. 9% !

0%1%2%3%4%5%6%7%8%9%

10%

2001 2002 2003 2004 2005 1H06

NIM Gross margin to RWA

KBC, Belgium, NIM andgross revenue margin vs RWA*

* The increase in gross margin as of 2005 is due to new accounting treatment (IFRS)

11

What makes KBC different to its peers ?

We believe KBC has the following “competitive” advantages: Geographical presence Structuring capabilities in the Asset Management field Distribution business model

12

KBC’s geographical presence

For historicial reasons, KBC is mainly present in the Northern part of the country:• 90% of branches in the North, 10% in the South• 35% market share in the North, 5% in the South

This is highly important since the Northern region is much wealthier that the Southern

Population(in m)

GDP/capita(euros)

GDP growth

Unemploy-ment rate

Avg sales price houses (in ‘000 EUR)

North 6.1 27 356 2.2% 6% 122

South 3.4 19 858 1.7% 12% 81

Total North South

KBC 946 80% 10%

Sector 4 564 60% 30%

a.o. Fortis 1 109 - -

Dexia 1 054 - -

ING 804 - -

Number of branches in 2005Belgium

Brussels

Source: Annual reports

2004 figures

13

KBC’s structuring capabilities in AM

Since >10 consecutive years, KBC has been able to increase its market share in mutual funds

The market has a predominantly risk-adverse investment culture and is highly receptive for “structured retail funds”, (e.g. capital guaranteed products) for which KBC has strong product design capabilities:• Broad product range: 200 new “products” launched in 2006• Short term to market: 20 days on average from idea to launch• Highly cost effective AM product factory : C/I ratio 15% (excl. distribution

cost)

15%

17%

19%

21%

23%

25%

27%

29%

31%

33%

35%

2001 2002 2003 2004 2005 1Q06

KBC, retail funds, market share, Belgium

Equity funds, 11%Funds of

funds, 18%

Unit- linked products,

4%

Capital-guaranteed funds, 40%

Fixed-income & balanced

funds, 27%

Breakdown of KBC’s retail funds, Belgium30 June 2006

14

KBC’s distribution business model Integrated business model:

• One single “governance” from top to bottom (no seperate management, no seperate budgets, no seperate marketing, …)

• Integrated distribution channels:– Single branding, product offering and pricing– Shared customer database– Streamlined product profitability (shadow accounting)

High level of “customer ownership” via branches and tied agents (limited share of broker channel)

21%

69%10%

Tied agents Independent brokersBank branches

KBC, insurance, sales volume and market share

0%

5%

10%

15%

20%

2001 2002 2003 2004 2005

0

1 0002 000

3 000

4 0005 000

6 000

7 0008 000

9 000

Market share

Sales volume (m EUR)

KBC, insurance distribution channels

15

Conclusions

KBC has an attractive proposition for you: Interesting growth potential : in Belgium (and, moreover, in CEE) Winning business model : bancassurance – asset management Modest risk profile Strict capital discipline and conservative acquisition policy at Group level

Additional information

17

KBC at a glance

COMPANY PROFILE

Top-20 financial player in Europe with a 32 bn euros market cap

Active in banking, wealth management and insurance with a strongly integrated business model

Focus on retail and SME Key geographical markets:

• Top-3 position in Belgium (3m customers)

• Top-3 position in CEE(9m customers)

SHAREHOLDER PROPOSITION

Attractive franchises:• Interesting growth potential:

CEE and (surprise?) Belgium• Winning bancassurance model• Modest risk profile

Capital discipline:• Dividend policy oriented towards

yearly increasing dividend• Conservative acquisition policy• 2006 share buy-back (1 bn)

Increased share visibility, liquidity, transparancy

18

Financial track record

1 3051 7251 615

2 249

FY03* FY04* FY05 1H06

Net profitIn m EUR

Over the last years, the financial performance improved significantly.

FY06 profit is expected to outgrow 3.2 bn euros

KBC will update its mid-term financial objectives before the end of the year.

12% 14%18%

25%

FY03* FY04* FY05 1H06

Return on equity

*Pro forma for the “new” KBC group

19

Share return track record

Share price (31 December 2005= 100)

95%97%99%

101%103%105%107%109%111%113%115%117%119%

Dec-0

5

Jan-

06

Feb-0

6

Mar

-06

Apr-0

6

May

-06

Jun-

06

Jul-0

6

Aug-0

6

Sep-0

6

KBC DJ EURO STOXX banks

(daily closing prices)

20

Current valuation

Key figures: Share price: 84.4 euros Book value: 42.9 euros Daily traded volume 8M06 : 54m euro

Analyst estimates:1

2006 EPS consensus: 9.11 euros (+46%)² 2007 EPS consensus: 7.87euros 2007 P/E: 10.7

Recommendations: Positive: 67% Neutral: 33% Negative: 0%

Situation as at 4 September 2006

1 Smart consenus collected by KBC (21 estimates)2 2006 estimates contain one-off items

weighted P/E 2007

unweighted P/E 2007

CEE banks 3 14.8 14.6

CEE-exposed banks 3 12.2 11.4

Euro-zone banks 4 10.7 11.0

KBC 1 10.7 10.7

BEL banks 5 9.8 9.8

Weighted and unweighted averages of IBES data :3 OTP, Komercni, Pekao, BPH PBK, BRE4 Erste, Unicredit, Soc. Gen., Intesa BCI, BA-CA, RZB Int.5 Top-20 DJ Euro Stoxx Banks 6 Fortis, Dexia

Valuation relative to peer group

21

Analysts’ opinions

Broker Name analyst Tel Rating Target price

Ron Heydenrijk +44 20 7678 0442 Buy 110

Ivan Lathouders +32 2 287 91 76 Accumulate 95

Jaap Meijer +31 20 573 06 66 Outperform 105

Kiri Vijayarajah +44-20-7986-4258 Buy 98

Ivan Vatchkov +44 20 7888 0873 Outperform 101

Carlo Ponfoort +32 3 204 77 11 Accumulate 99

Gaelle Jarrousse +44 20 7547 6226 Hold 88

Patrick Leclerc +33 1 42 99 25 12 Outperform 105

Kurt Debaenst +32 2 565 60 42 Hold 97

Alain Tchibozo +33 1 56 39 32 84 Buy 106

Christophe Ricetti +33 1 58 55 05 22 Buy 95

Paul Formanko +44 20 7325 6028 Overweight 92

Jean-Pierre Lambert +44 20 7663 5292 Market perform 96

Albert Ploegh +31 20 563 2382 Buy 100

Manus Costello +44 20 7996 1953 Neutral 88

Scander Bentchikou +33 1 44 51 83 08 Add 95

Ton Gietman +31 20 573 54 63 Hold 92

Bart van der Feen de Lille +31 20 460 48 65 Hold 95

Eric Vanpoucke +33 142 13 82 43 Neutral 93

Simon Chiavarini +44 20 7568 2131 Buy 110

Ralf Breuer +49 211 826 4987 Buy 103

Situation on 4 September 2006

22

Contact information

Investor Relations Office

Luc Cool, Director of IR

E-mail: investor.relations@kbc.comSurf to www.kbc.com for the latest update