KBC Bank & Insurance Group

Company presentation Spring 2004

Website: www.kbc.com

Ticker codes: KBC BB (Bloomberg) KBKBT BR (Reuters)

B:KB (Datastream)

ISIN code: BE0003565737

2

Table of contents

1. Company profile

2. Strategy overview

3. Financial highlights

4. Additional information

Company profile

4

Considerable scale in Euroland

Note: DJ Euro Stoxx Banks constituents as of 31 Jan 2004

0

5

10

15

20

25

30

35

40

45

50

BN

P P

BS

CH

DB

BB

VA

AB

N A SG

CA

SA

UC

IIn

tesa

Dex

iaS

PI

KB

CA

IBB

P E

span

Bo

Irela

ndH

VB

Alm

anij

Com

mer

zM

edio

ban

Aus

tria

MP

SE

rste

BC

PN

at G

reec

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apita

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Ver

ona

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oban

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ideu

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Alp

haLa

voro

Pop

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ngl.

Irish

Ant

onve

neta

Nat

exis

Dep

faB

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Sab

adel

lB

Lom

b.

Giant cap

Large cap

Mid cap

Number 12 in Euroland

bank ranking

KBC is a top-20 financial service provider in the Euro-zone with a market cap of ± 14 bn

5

Successful core businesses

Top bancassurer in Belgium : 3rd bank (market share: ± 22%) 1st asset manager (± 31% in funds) 3rd retail insurer (± 13% Life, ± 8% PC)

Successful expansion in the 5 most advanced countries in ‘Emerging Europe’ : Growth market of ± 65 m inhabitants ± 3.4 bn capital invested Prominent position in banking

Focused activities in corporate and investment banking. As investments in CEE progressed, CIB activities have been scaled down.

1998 1999 2000 2001 2002 2003

Retail (B) CEE CIB

Share in allocated capital

(excl. goodwill and group items)

KEY FIGURES :

Total assets : ± 226 bn

Net profit ‘03 : 1.12 bn

ROE ’03 : 12.7 %

Headcount : ± 50 000

Customers : ± 12 m

Credit rating : AA-, AA3, A+

6

Banking Insurance

Allocated capital

Slovakia:Market share: 6% (no 4)

Czech Republic:Market share: 18% (no 1)Total assets: 18.3 bnProfit/ROAC ‘03: 143 m / 17%

Hungary:Market share: 11% (no 2)Total assets: 5.5 bnProfit/ROAC ‘03: 13 m / 8% (20%)

Poland:Market share: 6% (no 7)Total assets: 4.8 bnProfit ‘03: -295 m

Slovenia:Minority interest (34%)Market share: 43% (no 1)Profit ‘03: 10 m

Czech Republic:Life M share: 9% (no 4)Non-life M share: 4% (no 6)Assets/Profit ‘03: 0.5 bn/-1.6 m

Slovakia:Life M share: 4% (no 8)Non-life M share: 2% (no 6)Assets/Profit ‘03: 50 m/-0.3 m

Hungary:Life M share: 2% (no 13)Non-life M share: 4% (no 6)Assets/Profit ‘03:79 m/0.3 m

Poland:Life M share: 5% (no 5)Non-life M share: 14% (no 2)Assets/Profit ‘03: 0.8 bn/-1,9 m

Slovenia:Startup life business

Prominent player in CEE

1998 1999 2000 2001 2002 2003

Note: profit contribution to KBC Group result after minorities.

7

Building a 2nd home in CEE

Minority in CSOB

Insurance

Majority in CSOB Bank

& CSOB Insurance

Take-over of IPB banking

Take-over of IPB

Insurance& majority in ERGO

Minority in K&H Bank & creation of

Argosz Non-life &

K&H Life

Majority in K&H Bank

Merger of K&H/

ABNAmro Magyar

Minority in Kredyt Bank

Majority in Agropolisa

Minority in WARTA

Majority in Kredyt Bank Majority in

WARTA

Minority in NLB Bank

Creation of NLB Life

1999 20012000 2002 2003< 1999

Czech/

Hungary

Poland

Slovenia

Slovak

8

+ IPB

Track record in CEE-3, bankingKBC

ParticipationTotal assets

Czech

Hungary

Poland

1999 2000 2001 2002 2003ROAC2003

90%

59%

81%

18.3 bn

5.5 bn

4.8 bn

+ABN Amro

- 13 m- 91m - 385 m

27 m 23 m- 10 m

1 m

15 m 50 m159 m

191 m169 m

Note : Profit contribution to KBC Group results, before minorities.

17%

8%/20%

Neg

-2 m

Profit contribution

365m of loan book clean-up

50 m one-off results

33 m fraudcharge '03

Turnaround to come through

Strong operating

performance

Strong operating

performance

Slovak

9

Group revenue profile

7%

50%

4%

7%

13%

19% Commission income

Technicaland investment income, insurance

Other

Yield income(Interest &dividend),banking

Trading income

Capital gains on disposals, banking

10

Balanced credit portfolio

3.0%1.0%

15.9%

3.0%

10.0%

5.0% 4.0% 3.0% 3.0%1.1% 1.0%

13.0%

17.0%20.0%

Indiv

iduals

Finance

Servic

esTra

de

Real esta

te

Constru

ction

Electri

city

Sovere

igns

Autom

otive

Food

Aviatio

n

Teleco

m

Shippin

gOth

er

CEE.17 bn

Other3 bn

W. Eur23 bn

Note : credit portfolio as of 31 Dec 03, incl. corporate bonds and loans to banks, excl. reverse repos.

US6 bn

Retail

CEE

Corporate

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec 00 Dec 01 Dec 02 Dec 03

Sector breakdown

Geographical breakdown Breakdown by area of activity

Belgium, retail38 bn

Belgium, corporate15 bn

11

Performing asset manager

11%

16%

12%

47%

6%

5% 3%

Assets under management (bn EUR) Breakdown of retail funds

Equity, Belgium

Bonds & MM,

Belgium

Mixed, Belgium

Capital-guaranteed, Belgium

Funds of funds, Belgium

Market share, retail funds

Belgium : 31% Czech Republic : 19% Slovak Republic : 6% Hungary : 8%

Belgium:87%

CEE: 5%

42

14

17

9

40

14

17

9

45

15

19

11

2001 2002 2003

Institutional, group assets Institutional, third-party assets Retail, private assets Retail, funds

Retail

Corporate

89 bn81 bn82 bn

Retail CEE

Unit-linked, Belgium

12

Long-term shareholdership

Cera Holding& Almancora

Other stable shareholders

MRBB

Almanij

StockMarket

Gevaert Private equity

KBC Bank & Insurance

KBLPrivate bank

± 17%± 16%± 37%

± 78%

100%

± 67%

± 29%

± 31%

Almanij is an investment company(of which KBC is ± 75% of the assets) committed to supporting KBC in the long run

Core holders include the Ceragroup (co-operative investment company), a farmers’ association (MRBB) and a syndicate of industrialist families. KBC/Almanij is a major asset for all of them.

Institutionals Belgium

28%

Retail Belgium

29%

Institutionals UK9%

Institutionals Continental

Europe13%

Institutionals North

America20%

Institutionals Rest of the

world1%

Free float (October 2003)

13

Steadily growing dividend

Board of Directors’ policy to maintain a steadily growing dividend

Gross dividend up every year over the past 5 years (at a CAGR of 9%)

Average payout : 40-45%(usually cash). Payout may be raised to keep dividend stable in case of temporary drop in profit

1998 1999 2000 2001 2002 2003

EPS 2.69 3.26 3.90 3.39 3.42 3.68

DPS 1.09 1.23 1.42 1.48 1.52 1.64

Payout 41% 38% 36% 44% 44% 45%

Yield 1.8% 2.1% 3.1% 3.6% 4.2% 4.9%

Note: yield = gross DPS versus average share price.Figures 2000 excl. value gain on CCF

2.69

3.26

3.90

3.39 3.423.68

1.42 1.48 1.52 1.641.23

1.09

1998 1999 2000 2001 2002 2003

EPS DPS

14

Undemanding valuation

2000 2001 2002 2003

Closing price 46.1 37.7 30.4 37.0

EPS 3.90 3.39 3.42 3.68

P/E (based on closing) 11.8 11.1 8.9 10.1

Net Asset Value 35.2 33.8 31.6 33.8

P/NAV 1.3 1.1 1.0 1.1

Key figures

Analyst forecasts (27 feb 2004)

EPS 2004 consensus 4.12EPS 2005 consensus

4.58P/E (average 2 years)

10.7Share price at 27-Feb: 46.34

Recommendations

Positive : 14Neutral : 9Negative : 3

Note: N° of shares outstanding as of 31 Dec. 2003, of which 7 m not dividend-entitled for 2003 : 310.7 mFigures 2000 excl. value gain on CCF

15

SWOT analysis

Strengths

Prominent market positions in home markets, both Belgium and CEE

Geographical/business diversification

Unique bancassurance concept

Performing asset manager and non-life insurance division

Good profitability track record and very sound solvency levels

Stable core shareholders (long term)

Opportunities

Revenue growth and barely tapped cost cutting potential in CEE

Availability of excess capital

Weaknesses

Still high cost/income ratio, banking

Cost-reduction management is rather difficult in Belgium

Volatility related to level of gearing to equity markets

CEE: still a somewhat higher risk zone(although steadily converging)

Lack of stability and scale in Poland(work in progress)

Threats

Consolidation wave in Europe, if any

Strategy overview

17

Group strategy

Key objectives :

1. Cross selling (bancassurance) in Belgium

2. Reducing banking costs in Belgium

3. Strengthening the second home market in CEE

KBC is a bancassurer focusing on local clients (individuals and SME)

in Belgium and selected countries in (Central) Europe

18

Strategy and earnings drivers

Achieved to date :

Premium income boosted :

Life premiums more than doubled from 1.1 bn in ’98 to 2.4 in ’03 (81% sold via bank outlets)

Bank distribution of non-life products

growing faster (+ 33%) than distribution via traditional channels (+5%)

Going forward :

Tap growth potential, though not to the detriment of technical performance :

For SMEs (<10% market share in insurance vs > 20% in banking)

For non-life insurance (10% via bank channel vs 81% in life)

Key objective 1 :Cross selling (bancassurance) in Belgium

19

Strategy and earnings drivers

Achieved to date :

Merger synergies :

Integrated IT-infrastructure

Branch mergers (-41%)

Headcount objective reached (-12%)

Going forward :

Further cost reduction:

Reduce product complexity in retail(action plan consisting of 364 items)

Out-/co-sourcing of processing and back-office functions (within the group and with third-parties)

Rationalisation of head office space and other non-FTE expenses

Key objective 2 :Reducing banking costs in Belgium

20

Strategy and earnings drivers

Achieved to date :

Expansion in 5 target countries :

Prominent franchises

Renewed IT-infrastructure

Bancassurance models set up

Strengthened of internalgovernance model/central management structure

Going forward :

Performance enhancement : Sales of banking, insurance, AM

products (deposits/ GDP at 45%-80% and premium/cap < 20 % of EU avg)

Business reorganization in CR (HQ) and Poland 10-15% FTE downsizing

Cross border cost-sharing (payments systems, IT procurement, etc.)

If opportunities arise, acquisitions in Poland (banking) and Hungary (insurance)

Key objective 3 :Developing a second home market in CEE

21

Note: combined ratio excl. re-insurance

Cost/income ratio, banking 58%

Combined ratio, non-life insurance 95%

Tier-1, banking 8%

Solvency, insurance 200%

EPS growth (4y CAGR) 10%

ROE, group 16%

ROAC

Retail in Belgium 16%

Central and Eastern Europe 17%

Corporates 12%

Markets 18%

Demanding financial objectives

Minimumtargets for 2005

FY ’03 financial highlights

23

Content

Question time

Performance 2003, overview

Performance, banking Performance, insurance

24

Group result : up 8 % year-on-year

Full-year results 2003

355

230

159

278316

280

152

287 304 300256 259

1 119

1 0341 022

1Q 01 2Q 01 3Q 01 4Q 01 FY 01 1Q 02 2Q 02 3Q 02 4Q 02 FY 02 1Q 03 2Q 03 3Q 03 Q4 03 FY 03

Q avg‘01-’03

+ 8%

In m EUR

+ 1%

25

698 708858

360 348

275

FY 01 FY 02 FY 03

Banking Insurance

1 022 1 034

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

26

Earnings growth peer group

2000 2001 2002 2003

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 level2000 = 100

27

Performance 2003

Overall : Change yoy pre-tax

Positive impact : (m EUR)Strong income trend for all basic banking activities (spread, commission) +232Strong premium growth, insurance +330Strong technical result, non-life +59Good cost control, banking +56Less impairments on equity portfolios, banking +238

Negative impact : Higher loan-loss provisions - 211Less gains on (‘free’) bonds, banking -148Less favourable trading results -135Less investment income, insurance -54

Net profit : +85

28

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

29

Growing dividend

2.69

3.26

3.90

3.39 3.423.68

1.091.23

1.42 1.48 1.52 1.64

1998 1999 2000 2001 2002 2003

Net profit per share Gross dividend per share

EUR

Dividend per share : up 7.9% year-on-yearLast 5 years : every year growing dividend (CAGR : 8.5%)

30

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)

31

Performance 2003, overview

Performance, banking

Content

Performance, insurance

Question time

32

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)

2 5413 046 3 118

1 057

1 0901 251

610

615480

275

250495

605 557

398

0

1 000

2 000

3 000

4 000

5 000

6 000

FY01 FY02 FY03

Interest CommissionTrading Realized capital gainsOther

Total income -1%organically

- 37%

+ 2%

- 22%

+15%

Excluding capital gains, income + 1%

4 977

5 6555 756

33

Growth in banking assetsCustomer deposits (bn EUR)

Customer loans (bn EUR)

121 123128

1015 5

2001 2002 2003

Customer deposits Repos

Note : mortgage growth adjusted for currency depreciations

64 62 59

21 23 252 13 6

2001 2002 2003

Corporate Private Repos

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)

34

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)

2 197

724 1 006

2 3022 398

1 018

491431389

FY 01 FY 02 FY 03

Belgium CEE Other

Cost/Income ratio: 65%(65% for FY 02)

3 5103 751 3 695

2001: KB only 4Q01

Ytd expenses (m EUR)

Continuing cost control

-1%

35

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

36

Reducing product complexity

Planned Realized Example : To do Example :

Paymentservices 59 24% No of types of credit

cards from 8 to 4 76% No of transactionsforms from 34 to 5

Investmentproducts 129 40%

No of types of savings accounts from 8 to 1

60% Reduction in highly complex orders

Home, carand travelservices

45 38%No add’l floating rates for consumer loans

62%No of types of mortgages from 50 to 15

Services tocompanies 131 40%

Reduction in interest rate formulas for cash facilities

60%

Integrating 15 types of insurance policies in more comprehensive policies

TOTAL 364 37% 63%

Note : situation as of Feb-2004

Implementation running or further enquiry required

37

Banking, loan provisions

Customerloan book

Gross loans

Dec. 03

Lossratio

FY 03

Lossratio

FY 02

Belgium 49.9 bn 0.24% 0.29%

Hungary 3.8 bn 0.32% 0.34%

CR / SR 6.0 bn 0.34% -0.62%

Poland 3.8 bn 8.68% 4.20%

International 29.4 bn 0.48% 0.70%

Total 92.9 bn 0.71% 0.55%

Loan loss provisions (m EUR)

Loan loss ratio : 0.71%(0.55% for FY 02)

156 144 117

23153

403142

168

156

FY 01 FY 02 FY 03

Belgium CEE Other

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

38

Note: Profit contribution excl. retail asset management and excl. retail insurance.Loan loss ratio on risk-weighted assets

70

225

41

2001 2002 2003

Retail banking in Belgium

2%4%12%

42% 37%

27%

2001 2002 2003

banking insurance

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

39

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.

CEE2nd home

In m EUR FY 03 % Chg ROAC 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

40

CEE banking, share of group wallet

35%28%

43% 35%

16% 27%

27%

19%

-17%

36% 28%17%

33%

12% 17% 14% 13%

55%

39%

23%

Risk-weighted assets Allocated capital Gross operatingincome

Net operating income

Belgian retail (incl. AM) CEE Corporates Market activities

Impact of paid

goodwill

Improved cost structure

under way

Heavy credit risk charge

in Poland in 2003

Value-added products andcommission

income to grow

Note : banking business lines , excluding group centerFY03 earnings

Pre-taxresult

41

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 Europe2nd home market

42

Central Europe2nd home market

Loan provisioning level in Poland

12.6%

17.6%19.1%

23.9% 24.7%

28.5%

5.1%

8.5%

11.8%

14.6% 14.8%

0%

5%

10%

15%

20%

25%

30%

BZ WBK BRE BPH Mill Pekao KB

Non performing loansNPLs covered by provisions (specific and general)

Adequately provisioned compared to peer group

Sources: companies’ financial reports and presentations (consolidated basis)

43

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

7.0%

5.0%

4.0% 4.0%

1.0% 1.0%

3.9%4.4%

5.0%

1997 1998 1999 2000 2001 2002 2003e 2004e 2005e

PolandGDP growth (y/y)

44

Situation as of Dec 2002 : the network model

CEE, governance model - 2002

CEE Group companies

Co-ordination UnitCEE Insurance (2)

Business co-ordinators (12)

KBC expats(31)

Co-ordination UnitCEE Banking (1)

Moreover : audit and market and credit risk managment centralized (for credit risk in Poland only from end of 2002)

ExecutiveCommittee

ManagementCommittee CEE (5)

Initiating and followup of :• Transfer of knowhow• Shared business projects

45

CEE, governance model - 2003

ExecutiveCommittee

ManagementCommittee CEE (6)

General ManagerCEE (1)

Controlling UnitCEE (5)

Steering committees Co-ordination UnitCEE (8)

Business co-ordinators(22) & task forces CEE

Performance monitoring

CEE Group companies

KBC expats(44)

Day-to-daymanagement

Steering of business projects

Initiating and followup of :• Transfer of knowhow• Business projects• Uniform methodology

Key elements :because of increased importance of 2nd

home market :• Increased management involvement• Intensified follow-up

Renewed model,situation as ofDec. 2003

46

Profit contribution (in m EUR)

91116 116

2001 2002 2003

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 8189

Retail

Corporate

42

14

17

9

40

14

17

9

45

15

19

11

2001 2002 2003

Institutional, group assets Institutional, third-party assets Retail, private assets Retail, funds

Belgium :87 %

Central Europe : 5 %

+10%

47

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)

214 220206

FY 01 FY 02 FY 03

+7% 6490

643

12 128

-26

96 111

FY 02 FY 03

Belgium W. Europe USASE Asia Other

Details on corporate activities(m EUR)

48

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 :

125

4693

FY 01 FY 02 FY 03

9681

115

-34

0

-46

46

10

-12

Fixed income Equity Derivatives

FY 01 FY 02 FY 03

m EUR

m EUR

Note: including trading-, interest and commission incomefrom market activities,excluding trading income in CEE and related to treasury and investment book

+35%

49

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

2004 Real growth GDP Inflation 10y-yield

Belgium

CEE

0.9% 1.8%

2.5 / 4% 3.5 / 4.5%

1.3% 1%

Diverse

4.1% 4.5%

Diverse

50

Performance 2003, overview

Performance, banking

Content

Performance, insurance

Question time

51

459

1 275

1 676

1 229

971

762

FY 01 FY 02 FY 03

Interest-guaranteed Unit-linked

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

52

69% 72%65%

34% 33%31%

FY 01 FY 02 FY 03

Claims ratio Expense ratio

Underwriting result, non-life

Verylow level

Combined ratioPremiums

+15% organically 104% 105%

96%

608 637 678

3387

120179

186

249

FY 01 FY 02 FY 03

Belgium CEE R/I

821910

1 048

Very sound business, partly driven by upward trend in rates and by strong risk and cost discipline

Net premium income

53

Cross selling, bancassurance

34,5%35,2%

37,5%

39,1% 40,0%

2000 2001 2002 2003 Target

Clients with both banking and insurance productssold by KBC (Belgium)

Cross selling 2003, Belgium :

Mortgage / fire insurance : 50%

Mortgage / death cover : 67%

Consumer loan / death cover : 66%

Cross selling continues

54

Insurance, investment income

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

1Q01

2Q01

3Q01

4Q01

1Q02

2Q02

3Q02

4Q02

1Q03

2Q03

3Q03

4Q03

Interest income, bonds10 y EUR T-bonds

FY 02 FY 03

Interest, dividend,rent 449 455 +1%

Capital gains on shares 198 138 -30%

Total 647 593 -8%

Investment return in FY 03down 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.

55

Insurance in CEE, overview

Premium2003

Premiumgrowth

Profit contribution

2002

Profitcontribution

2003

Czech Republic 165 +9% -12.1 -1.6

Hungary 67 +40% 1.7 0.3

Slovak Republic 22 - - -0.3

Poland 440 - -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

56

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

57

Insurance, non-recurring items

In m EUR FY 02 FY 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 result 9 -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

58

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 levelDec 2003 + 5% + 10% + 15%

Expected impairments 190 170 150 130

Available provision for fin. risks 93 93 93 93

Potential impact on P/L 97 77 57 37

Available non-realized value gains 115 175 240 300

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)

Additional information

60

Year-to-date results,detailed overview

m EUR FY 02 FY 03 % Organic %

Gross operating income 6 593 6 498 -1 % -1% - banking 5 756 5 655 -2% -1% - insurance 852 847 -1% -1%Administrative expenses - 4 212 -4 202 0% 0% - banking - 3 751 -3 695 -1% -1% - insurance -457 -499 9% 7%Operating result 2 381 2 297 -4% -2% - banking 2 005 1 961 -2% -1% - insurance 396 348 -12% -12%Loan loss provisions

Value adjust., non-recurring, extraordinary and other results

- 465

- 205

- 676

20

Pre-tax profit 1 711 1 641 - 4% - 4%

Taxes - 511 - 442

Minority interests - 166 - 80

Net profit 1 034 1 119 8% 8%

61

Impact on gross operating

income

NLB Bank

Equitymethod

Q3 Q4

2003

Ergo Insurance

Krefima Bank

Full consolidation

Deconsolidation(previously full consolidation)

Full consolidationas of 1Q04

( previously equity method)

2004

Warta Insurance

Q1 Q2 Q1 Q2

+0.1%

+0.1%

-0.4%

Limited net impact of changes in consolidation in 2003

Main changes in scope of consolidation

62

Group, key performance ratios

Dec 01 Dec 02 Dec 03

Cost / income, banking 70.5% 65.2% 65.3%

Combined ratio, insurance 99.9% 101.4% 94.8%

Solvency (Tier 1), banking 8.8% 8.8% 9.5%

Solvency, insurance 504% 320% 316%

Return on equity 13.2% 12.7% 12.7%

Growth in EPS (y-o-y) -13% +1% +8%

Notes: combined ratio: excluding reinsurance. Solvency insurance: including unrealized gains.

63

Areas of activity, profit contribution

Note :Profit contribution excluding minority interests. Profit growth in CEE after adjustments for currency effects.

Activity Profit % ROAC Headlines

Retail, Belgium 453 m 25% 16%

- Strong commission and premium income- Cost reduction in banking (- 7% y-o-y)- Low loan losses (21 bp/RWA) and low combined ratio non-life (93%)

Central Europe : - banking, CR/SR - banking, Hungary - banking, Poland

-148 m143 m

13 m-295 m

= 0%13%

-

17%8/20%

-

- Strong commissions in CR (but margin pressure and fewer one-offs)- Strong income growth in Hungary (but fraud provision charge of 33m)- High loan losses in Poland (365m)- Improvement in insurance (though limited scale)

Asset management 116 m = - - AUM up 10% vs Dec 02

Corporate services 230 m 19% 11%

- Successful cost control and significant lower loan losses- Less one-off income (CLOs) - Reinsurance out of the red

Market activities 125 m 35% 11%- Fixed income: very strong - Equities: modest but cost-cutting successful - Derivatives: satfisfactory (suffered from MtM)

Strong rebound in Belgium. Substantial adverse impact of Poland

64

1.80%

1.85%

1.90%

1.95%

2.00%

2.05%

2.10%

2.15%

1Q01

2Q01

3Q01

4Q 01

1Q02

2Q02

3Q02

4Q02

1Q03

2Q03

3Q03

4Q03

3.5%

4.0%

4.5%

5.0%

5.5%

Interest margin, Belgium (left)10 y EUR T-bonds (right)

Interest spreads in BelgiumInterest margin, banking Spread on new loans

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

Investment credit, Belgian SME loan book

Corporate bond A-rating

Going forward, increasing market rates could fuel top-line growth

65

Merger completed in Belgium

Realization of merger synergies(% of objective)

0%

20%

40%

60%

80%

100%

120%

1999 2000 2001 2002 2003

IT-integrationReduction of branchesHeadcount reduction

66

Credit portfolio : cyclical sectors

% of total portfolio Dec '01 Dec '02 Dec '03 EUR bn Chg 03-02

Real estate 5% 5% 5% 7.2 -6%

Electricity & water 6% 4% 4% 4.6 -24%

Aviation 1% 1% 1% 1.5 -7%

Shipping 1% 1% 1% 1.4 -7%

Telecom 2% 2% 1% 1.4 -37%

Hotel & restaurant 1% 1% 1% 1.2 -16%

IT 0.4% 0.4% 0.4% 0.6 8%

Media 0.5% 0.4% 0.3% 0.5 -16%

67

Low Interest rate risk covered by

provisions (4% ref. rate)

Premium growth 2002

Life portfolio

Life reserves, Belgium (non-linked)

Rate 4.75% 3.75% 3.25% 2.75% Other Total

Traditional 14% - 8% - - 22%

Universal 28% 23% 22% 2% 3% 78%

Note : Universal life: flexible premium payments with 10-year interest rate guarantee on current premiums and without guarantee for future premiums

Premium growth 1H2003

Premium growth 2H2003

Asset-backing allowing hedging

of Interest rate risk

68

Sound business, even in low-interest-rate environment

Profitability dynamics, life (non-linked)

Reserve (1st yr) 100

Return on investment4.83 %

Allocated capital9.25

Investment income, reserves

4.83

Investmentincome, capital

0.45

Investment income5.27

Guaranteed rate2.75

Profit BT2.52X

X

+ -

Simplified example :

ROAC20%

Tax0.68

Investment mix :

75% Treasury bonds Return : 4.20%

(Example) 20% Shares 6.70%

5% Real estate 6.70%

4.83%Return on allocated capital

Note : reserve for year n = 100 x 1.048 ^n

ROAC Year1 Year 2 Year3 Year n

Rate at 2.75 % 20% 21 % 23%

Rate at 3.25 % 16 % 17 % 19%

-

69

Low combined ratio, significant leverage on return

Profitability dynamics, non-life

Reserve ratio200

Return on investment5.45%

Allocated capital40

Investment income,reserves

10.9

Investment income,capital

2.2

Premium100

Combined ratio-95.0

Investment income+13.1

Profit BT18.1

Tax- 3.7

ROAC36%

X

X

+ +

-

Investment mix :

50% Treasury bonds Return : 4.20%

(Example) 45% Shares 6.70%5% Real estate 6.70%

5.45%

Combined ratio 105 % 100% 95%

ROAC 16 % 26 % 36 %

-

Simplified example :

Return on allocated capital

70

Czech & Slovak republics - CSOB

Market position :• Inhabitants : 15 m• Market share : 18% / 6 %• Customers : ± 3.2 m• Branches : 281 (+3400 POS)• Workforce : ± 10 400 FTE

KBC’s footprint :

• 1999 : Majority (privatization)

• 2000 : Take-over of IPB Bank Current stake : 90% Investment : ± 1.4bn (± 2.3 xBV)

Financial track record :

m EUR, IAS ‘99 ‘00 ‘01 ‘02 ‘ 03

Net profit 78 134 175 214 196

RWA : 6.8 bn (7% of KBC’s banking operations)

• Allocated equity : 1.0 bn (13% of KBC banking)

Gross margin

Cost/income

Loan loss

Pretax margin

Ratio 10.0% 71% 34bp 2.5%

Share in KBC banking total

12% 13% 6% 13%

Margins on RWA

Profit contribution 2003 :

Sustained satisfactory results(though positive impact of exceptionals mainly in ‘01-’02)

Note: participation including increase from 85% to 90% in 2004

71

Hungary - K&H Bank

Market position :• Inhabitants : 10 m• Market share : 11%• Customers : ± 0.7 m• Branches : 155• Workforce : ± 3 800 FTE

KBC’s footprint :

• 1997 : Reference stake (32%)

• 2000 : Full ownership (100%)

• 2001 : Merger ABN Amro Magyar

Current stake : 59% Investment : 0.3 bn (1.3 x BV)

Financial track record :

m EUR, IAS ‘99 ‘00 ‘01 ‘02 ‘ 03

Net profit - 32 10 15 46 36

RWA : 3.8 bn (4% of KBC’s banking operations)

• Allocated equity : 0.3 bn (4% of KBC banking)

Gross margin

Cost/income

Loan loss

Pretax margin

Ratio 8.2% 78% 32bp 1.6% /0.8%

Share in KBC banking total

6% 7% 2% 2% /5%

Margins on RWA

Profit contribution 2003 :

Turnaround proven to be successful.K&H Equities loss in '03.

Stand-alone incl. minorities

72

Poland - Kredyt Bank

Market position :• Inhabitants : 38 m• Market share : 6%• Customers : ± 0.8 m• Branches : 359• Workforce : ± 9 600 FTE

KBC’s footprint :

• 1997 : First stake (5%)

• 1999 : Reference shareholder (49%)

• 2001 : Full ownership (56%)

• 2002 : Full control (76%)

Current stake : 85% * Investment : 0.8 bn (c.2x est BV)

Financial track record :

m EUR, IAS ‘99 ‘00 ‘01 ‘02 ‘ 03

Net profit 28 39 -9 -108 -353

RWA : 4.4 bn (5% of KBC’s banking operations)

Allocated equity : 0.4 bn (5% of KBC banking)

Gross margin

Cost/income

Loan loss

Pretax margin

Ratio 7.8% 87% 9% Neg

Share in KBC total

6% 8% 54% Neg

Margins on RWA

Profit contribution 2003 :

Stand-alone, incl. minoritiesThorough clean-up of loan book since '02 (late in the cycle)

In-depth restructing plan being implemented.Turnaround to come

Note: investments including capital increase of 4Q03 and 1Q04

73

CEE, credit ratings upgrade in 2003

Update Country rating Company rating Outlook

CSOB (CR) Jan. 2001 BBB+ BBB+ Stable

Sept. 2003 A- A- Stable

K & H (Hungary) Oct. 2000 BBB+ BBB+ Stable

July 2003 A- A- Stable

KB (Poland) Oct. 1999 BBB+ BBB+ Stable

Sept. 2003 BBB+ BBB+ Stable

NLB (Slovenia) Feb. 1997 BBB+ BBB+ Stable

Sept. 2003 A+ A- stable

Fitch credit ratings

74

KBC in CEEStrengths Prominent market positions with

nationwide branch networks

Geographical diversification

Satisfying results to date in most markets, except banking in Poland

Common shared optimism on rebound of economic cycle in ’04 and long-term market growth in general

As of May 2004 : all CEE affiliates (5 countries) operating in the EU

Successful bancassurance and asset management concept at group level (knowhow is being transfered)

Excess capital at group level with stable core shareholders (long term)

Weaknesses Still high cost/income ratios

(work in progress)

Converging business margins

CEE still a higher risk zone(allthough tempered by EU entry)

Still unsatisfactory stability and scale in Poland (work in progress)

Central Europe2nd home market

Reconfirmed confidence in our strategy fundamentals

75

Economic outlook

Real GDP growth Inflation (CPI) 10-y interest rate

03e 04e 05e 03e 04e 05e Feb 04 Feb 05e

EUROzone 0.5% 1.8% 2.4% 2.1% 1.7% 1.6% 4.1% 4.8%

Czech Republic 3.2% 3.9% 4.0% 0.1% 3.2% 2.6% 4.8% 5.6%

Slovak Republic 3.9% 4.3% 4.8% 8.6% 7.8% 4.5% 5.2% 5.5%

Hungary 2.7% 3.1% 3.8% 4.7% 7.2% 4.4% 8.6% 8.2%

Poland 3.9% 4.4% 4.2% 0.8% 2.5% 2.0% 6.8% 6.7%

Source: KBC Asset Management, March 2004

76

bonds

shares

Real estate &

other

Value adjustments, equity portfolio

Significant value adjustments in ‘02 and in 1Q 03 (offset by non-recurring result)

-88-202

36

-31

-299

-96

Adjustments, insurance book Adjustments, banking book

Investment portfolio banking

Investment portfolio insurance2 791(26%)

638(6%)

7 461(69%)

(book value in m EUR, at 31 Dec. 2003)

bonds

shares1 202(3%)

42 093(97%)

Value adjustments, equity portfolio

FY 01 FY 02FY 03

Note: portfolio insurance excl. unit-linked investment.

77

Unrealized gains

In m EUR Dec 02 Dec 03 %

Bankingbook 1 742 1 437 - 18%

Bonds 1 630 1 236

Shares 113 201

Insurancebook 82 324 + 294%

Bonds 497 328

Shares - 516 - 92

Real estate 101 86

Reduced losses on equity portfolio, driven by upward trend of stock markets

Note: balance of gains and losses. Shares including participating interests.

78

0

500

1000

1500

2000

2500

FY 01 FY 02 FY 03

Legal Buffer Excess

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

FY 01 FY 02 FY 03

Legal Buffer Excess

Solvency

8.8% 8.8%9.5%

504%

320%316%

Banking business

(Tier 1)

Insurance business

(Solvency margin)

581 m

581 m

676 m

1 458 m

3 793 m

3 793 m

In m EUR In m EUR

Solid solvency in both banking and insurance allowing further investments if needed

(no double gearing and no DAC)

79

Basle II regulation Quantitative impact study (QIS 3) – 1st half 2003 :

required capital compared with current required capital level :

Approach Credit risk Total risk Standardized 95% 105% IRB Foundation 76% 87% IRB Advanced 74% 85%

Positive impact from the lower weight of retail/SME portfolio

But : for the time being, uncertainty prevails regarding risk classification in the CEE portfolio and on the changes emanating from the Jan-04 Basle Committee meeting

Basle II may free up some capital

80

EU directive : 1Q03 Regulation: 3Q04 Application : 1Q05

Requirements Impact for KBC

Group solvency

No double gearing

Appropriate leverage

Minimum group solvency level

OK

OK

OK

Groupgovernance

'fit and proper‘ organization

Appropriate financial and risk procedures

Reporting and supervision on risk concentrations and intragroup transactions

Already anticipated :

Integrated Executive level

New Group CFRO function

Centralized group risk department

No material financial impact to be expected

Financial conglomerate regulation

81

Outstanding convertible bonds

In 2003, a mandatory convertible bond reached maturity :(coupon 12.2% in ’03) creating ± 6.8 m new KBCN shares (not dividend-entitled for 2003)

Outstanding convertible bonds : Convertible bond 2005 :

417 m EUR (coupon 2.50%), maturing Dec. 2005, optionally convertible in 5.2 m shares (± 80 EUR/ share) of which ± 2 m held by KBC

Mandatory convertible bond 2008 : 186 m EUR (coupon 3.50%), maturing 2008, to be converted in 2.7 m shares (± 69 EUR/share)

No relevant dilutive instruments in the coming 4 years

82

Contact information

Investor Relations Office :

Luc CoolNele Kindt

Tel. : +32 2 429 49 16 E-mail : investor.relations@kbc.com

Visit www.kbc.com for the latest update on our company :

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