KBC Group Organisation...Current situation (at end 1Q12) Including State core capital securities of...

May 2012

1 1

This company presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by KBC. A decision to purchase or sell our securities should be made only on the basis of a prospectus or offering memorandum prepared for that purpose and on the information contained or incorporated by reference therein.

KBC believes that this presentation is reliable, although some information is summarised and therefore incomplete. Financial data is generally unaudited. KBC cannot be held liable for any loss or damage resulting from the use of the information.

This presentation contains non-IFRS information and forward-looking statements with respect to the strategy, earnings and capital trends of KBC, involving numerous assumptions and uncertainties. The risk exists that these statements may not be fulfilled and that future developments may differ materially. Moreover, KBC does not undertake to update the presentation in line with new developments.

Much of the information in these slides relates to the KBC Group and may not, therefore, be wholly relevant to the performance or financial condition of KBC Bank and its subsidiaries. Those interested in KBC Bank should not place undue reliance or attach too great importance to the information contained in these slides relating to KBC Group.

By reading this presentation, each investor is deemed to represent that they understand and agree to the foregoing restrictions.

Important information for investors

2 2

Main strengths of KBC Group

• Well-developed bancassurance strategy and strong cross-selling capabilities • Strong franchise in Belgium with high and stable return levels (ROAC of 37% in 1Q12) • Access to growth in ‘new Europe’ (most mature markets in the region)

• Strongly improved underlying 1Q12 results: 455m EUR, thanks to markedly lower impairments and strong dealing room income. Core profitability in home markets remains intact in difficult conditions. We are sticking to our guidance for loan loss provisions in Ireland of 500-600m EUR for the full year 2012

• Decisive progress on divestments, with capital gains to come in 2H12

• Further reduction of volatile elements: • CDO/ABS exposure further reduced by roughly 2.2bn EUR notional in 1Q12 • PIIGS exposure further down by 42% since the end of 2011

• Strong capital position: pro forma core tier-1 ratio of 13.6% at KBC Group, which is a significant improvement compared to the end of last year. First 500m EUR repayment to the Federal Government in January 2012 at 15% premium. Working towards further repayment(s) in 2012

• Strong liquidity position: Unencumbered assets are double the amount of the net recourse on short-term wholesale funding maturing in 1 year

• Funding needs 2012 covered and additional buffer in place thanks to the issuance of 2.25bn EUR unsecured long-term debt (1.25bn EUR 2y and 1.0bn EUR 5y), strong growth in customer deposits (+4% q-o-q) and additional buffer established with participation in LTRO2

2

Strategy and business profile of KBC Group

Financial performance of KBC Group

Asset quality of KBC Bank

Liquidity and solvency of KBC Bank

Wrap-up

Appendices

3 3

Contents

3

4

KBC at a glance KBC Group has a successful track record in bancassurance in its domestic market of Belgium

and has been expanding to Central & Eastern Europe over the last 10 years

Key data on KBC Group Total market cap (11 May 2012): 5bn EUR Total assets: 291bn EUR at the end of 1Q12 Total equity: 18bn EUR Tier-1 ratio: 13.1% (11.4% core)

Key data on KBC Bank Total assets: 247bn EUR at the end of 1Q12 Total equity: 13bn EUR Tier-1 ratio: 12.1% (10.1% core)

Credit ratings of KBC Bank

Underlying net group profit of KBC Group in 1Q12: 455m EUR, strongly improved q-o-q

thanks to markedly lower impairments and strong dealing room income

4

S&P (Dec 2011)

Moody’s (Feb 2012)

Fitch (Jan 2012)

Long-term A- / Stable A1 / under review, down A- / Stable

Short-term A-2 Prime-1 F1

5

• Over 50% of KBC shares are owned by a syndicate of core shareholders, providing continuity to pursue long-term strategic goals. Committed shareholders include the Cera / KBC Ancora Group (co-operative investment company), the Belgian farmers’ association (MRBB) and a group of industrialist families

• The free float is held mainly by a large variety of international institutional investors

41%

11%

13%

23%

7%

FREE FLOAT

MRBB

KBC Group (Treasury shares) 5%

Other Core

KBC Ancora

Cera

Stable shareholder structure

Group’s legal structure

Group’s legal structure

6

Overview of capital transactions with the Belgian State and the Flemish Regional Government

KBC Group NV

KBL EPB (The sale has already been announced)

KBC Bank KBC Insurance

99.9% 100% 100%

7

Business profile of KBC Group

KBC is a leading player (retail and SME bancassurance, private banking, commercial and local investment banking) in Belgium and our 4 core countries in CEE

26%

Group Centre 22%

Merchant Banking (incl. Belgian corporates, Ireland and International activities) 31%

Central and Eastern Europe 21%

Retail, SMEs and Private Banking Belgium

Breakdown of capital allocation as of 31 March 2012 per business unit

8

Market shares of KBC Bank in core markets

Belgium* Czech

Republic Slovakia Hungary Bulgaria (Inhabitants) (10 million) (10 million) (5 million) (10 million) (8 million)

Loans and deposits 19% 20%** 10% 9% 3%

Investment funds 41% 31% 10% 20% -

Market shares, as of end 2011***

* Excluding Centea and Fidea ** Including 55% of the joint venture with CMSS *** Market shares are based on preliminary figures

9

% of assets 2011a 2012e 2013e

SK 2% +3.3% +1.5% +2.2%

BE 57% +1.9% +0.2% +1.4%

CZ 13% +1.7% 0.0% +2.0%

BG 1% +2.1% +1.2% +2.5%

HU 3% +1.7% -0.3% +1.0%

Real GDP growth outlook for core markets Source: KBC data, May 2012

KBC’s geographical presence

KBC’S CORE MARKETS Belgium (Moody’s Aa3) Total assets: 167bn EUR

Czech Republic (A1) Total assets: 39bn EUR

Hungary (Ba1) Total assets: 9bn EUR

Slovakia (A2) Total assets: 6bn EUR

Bulgaria (Baa2) Total assets: 1bn EUR

SPAIN

FRANCE

BELGIUM

NETHERLANDS

GERMANY CZECH REP

POLAND

SLOVAKIA

HUNGARY

SERBIA BULGARIA

ROMANIA

RUSSIA

UK

IRELAND

ITALY

GREECE

LITHUANIA

LATVIA

ESTONIA

Macroeconomic outlook Based on GDP, CPI and unemployment trends Inspired by Financial Times

KBC’s core markets In Belgium and CEE-4

KBC’S NON-CORE MARKETS

Ireland (Moody’s Ba1) Total assets: 19bn EUR

Poland (A2) Total assets: 12bn EUR

Russia (Baa1) Total assets: 2.3bn EUR

Serbia (not rated) Total assets: 0.3bn EUR

Romania (Baa3) Total assets: 0.03bn EUR

PORTUGAL

10 10

Current situation (at end 1Q12)

Including State core capital securities of 6.5bn EUR, the core tier-1 ratio for KBC Group was at a comfortable 11.4% level at the end of 1Q12. At KBC Bank, the core tier-1 ratio amounted to 10.1% at the end of 1Q12

4. New Team & Strategy

1. Adequate Capital

2. Mitigated ‘Toxic’ risk

3. Adequate Loan Quality

Remaining structured credit risk is largely covered by a State guarantee* in order to prevent new market turbulences putting the capital position at risk again

2011 and 2010 loan losses were significantly lower than in 2009 We are sticking to our guidance for loan loss provisions in Ireland

of 500-600m EUR for the full year 2012

The new management team is implementing a new strategy, focusing on core businesses and structurally reducing risk, whilst maintaining sound growth/returns

* Additional disclosure in appendices 10





Wrap-up

Appendices

11 11

Contents

11

12

Earnings capacity

38013

1Q12 FY11 FY10

1,860

FY09

-2,466

FY08

-2,484

FY07

3,281

FY06

3,430

Reported net profit

4559696220

1Q12 FY11

1,800

1,098

290

FY10

1,710

FY09

1,724

FY08

2,270

FY07

3,143

FY06

2,548

Underlying net profit Underlying gross operating income (pre-impairments)

Amounts in EUR million for KBC Group

879

1Q12 FY11*

3,830

FY10

3,912

FY09

4,223

FY08

3,581

FY07

4,317

FY06

3,762

Core earnings power intact, with a significantly reduced risk profile (trading), despite drastic RWA reduction (including B2.5 impact) since the end of 2008: 36.2bn EUR per end 2011 and 44.5bn per end 1Q12

Excl. exceptional items Excl. exceptional items and cyclical

effects of credit provisions

* FY11 with neutralisation of impact of 5-5-5 bonds One-off impairments for Bulgaria

Impact new FX law Hungary

Impact 5-5-5 product

Impairments Greek government bonds

13

Good level of net interest income Net interest income from lending and deposit-taking fell by 4% y-o-y in 2011, largely due to divestments

(Centea and Secura) and the reduced government bond portfolio. Excluding Centea and Secura, net interest income fell by 2% y-o-y in 2011. The NIM increased 4bps y-o-y to 1.96% at the end of 2011, partly thanks to some technical items. The NIM in 1Q12 amounted to 1.93%

Higher loan volumes in 2011 compared to year-earlier level (+2%). Increase in volume of Belgian and CEE retail loans (+6% y-o-y) partly offset by intentional scaling down in Russia and international corporate loan book. In 1Q12, loan volumes rose by 3% y-o-y on a comparable basis. In 2011, customer deposits were down by 14% y-o-y for the group due to outflows of corporate and institutional investors outside core markets linked to EUR-zone and Belgium risk aversion (fully situated in Merchant Banking), with Belgium posting a 5% growth and CEE 4%. Note that deposit volumes in the Merchant Banking BU recovered 18% q-o-q in 1Q12

+12% +10%

+16bp -4bp

Underlying net interest income (worldwide)

Net interest margin (worldwide)


1Q12

1,211

FY11

5,404

FY10

5,603

FY09

5,497

FY08

4,910

FY07

4,459

1Q12

1.93%

FY11

1.96%

FY10

1.92%

FY09

1.84%

FY08

1.68%

FY07

1.72%

13

+8bp +2%

-4% +4bp

14

Continued tight cost control, loan loss provisions significantly lower

Lower operating expenses (-3% y-o-y) in 2011, reflecting divestments and deduction from the Hungarian banking tax related to the FX mortgage impairments. Excluding all these and other one-off items, operating expenses rose by 3% y-o-y due to inflation-linked expenses. In 1Q12, operating expenses also rose by 3% y-o-y, excluding one-offs

In 2011, loan loss provisions were significantly lower (-10% y-o-y): consistently low in the Belgium BU and substantially lower in Group Centre. Sharply higher loan losses in CEE (-137m EUR y-o-y), driven mainly by Bulgaria and Hungary (FX measures in 2H11). Loan losses in Merchant Banking remained at a high level in 2011, mainly attributable to KBC Bank Ireland. In 1Q12, substantially lower impairments were recorded, despite the 195m EUR loan losses booked at KBC Bank Ireland (in line with guidance)

-13% +8%

+194%

+146%


Underlying operating expenses (worldwide)

Underlying loan loss provisions (worldwide)

1Q12

1,110

FY11

4,686

FY10

4,832

FY09

4,888

FY08

5,591

FY07

5,164

261

641

185

1Q12 FY11

1,335

FY10

1,481

FY09

1,883

FY08 FY07

14


-1% -20%

-3% -10%

15

Loan loss experience at KBC

1Q12 credit cost

ratio

FY 2011 credit cost

ratio

FY 2010 credit cost

ratio

FY 2009 credit cost

ratio

Average ‘99 –’10

Peak ‘99 –’10

Belgium -0.02% 0.10% 0.15% 0.15% 0.16% 0.31%

CEE 0.60% 1.59%* 1.16% 2.11% 1.05% 2.75%

Merchant 1.57%** 1.36%** 1.38%** 1.19% 0.55% 1.38%** Group Centre 0.34% 0.32% 1.17% 1.58%

Total 0.66%*** 0.82% 0.91% 1.11% 0.45% 1.11%

Credit cost ratio: amount of losses incurred on troubled loans as a % of total average outstanding loan portfolio

* The high credit cost ratio at CEE is attributable entirely to Bulgaria (very illiquid domestic real estate market) and K&H Bank (impact of new law on FX

mortgages) in 2H11

** The high credit cost ratio at Merchant Banking is due in full to KBC Bank Ireland

*** Credit cost ratio fell to 0.66% in 1Q12 (from 0.82% in FY11). Excluding KBC Bank Ireland, the credit cost ratio stood at a very low 0.18% in 1Q12

16

Satisfying FY results in home markets

2011

1.0

0.8

0.1 0.1

2010

1.1

2009

1.1

2008

1.1

2007

1.4

2006

1.1

2005

1.1

Underlying net profit Belgium (retail)

2011

0.6

0.3

0.1

0.1 0.1

2010

0.6

2009

0.2

2008

0.5

2007

0.6

2006

0.4

2005

0.3

Underlying net profit CEE

2011

-0.1

2010

0.1

2009

0.3

2008

0.5

2007

1.0

2006

0.9

2005

0.8

Underlying net profit Merchant Banking (BE +Intl) (affected by Ireland)

2011 ROAC: 27%

Amounts in bn EUR

Underlying performance

Consistent performer 2011 ROAC: 11%

Impact 5-5-5 product Impairments Greek government bonds One-off impairments Bulgaria

Impact new FX law Hungary


Consistent performer

Underlying net profit MEB excluding Ireland

2011

0.34

0.21

0.11

0.02

2010

0.34

2009

0.25

2008

0.38

MEB underlying net profit excluding Ireland

Impact 5-5-5 product


Consistent performer





Wrap-up

Appendices

17 17

Contents

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Parent shareholders’ equity: 12bn EUR

Tangible & intangible fixed assets (incl. Investment property): 4bn EUR

Loan book: 136bn EUR (Loans and advances to customers)

Trading assets: 22bn EUR

Investment portfolio: 41bn EUR

Funding and deposit base: 171bn EUR

18 18

Balance sheet risks? (KBC Bank consolidated at end 1Q12)

1. Credit quality

Total Assets: 247bn EUR Total Liabilities & Equity: 247bn EUR

2. Trading exposure

3. ‘Toxic’ assets

4. Sovereign bonds

Capital adequacy

Liquidity position

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Other (incl. interbank loans): 44bn EUR

Trading liabilities: 20bn EUR

Other (incl. interbank deposits): 44bn EUR

Tangible & intangible fixed assets

Loan book (loans & advances to customers)

Trading assets

Investment portfolio

19 19

Credit quality

1. Credit quality (esp. in CEE)

Total Assets Customer loan book: 136bn EUR at end 1Q12

• 40% residential mortgages

• 2% consumer finance

• 10% other retail loans

• 48% SME/corporate loans

Largely sold through own branches

Total NPL at 5.2% at end 1Q12 (5.6% in CEE)

NPL cover ratio at 63% at end 1Q12 (70% in CEE)

2. Trading exposure


4. Sovereign bonds

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

1Q12 4Q11

0.3%

4.9%

3Q11

0.3%

4.6%

2Q11

0.1%

4.3% 5.0

1Q11

0.1%

4.2%

4Q10

0.1%

4.1%

3Q10

0.3%

4.0%

2Q10

0.1%

3.7%

1Q10

0.2%

3.6%

5.2% 5.5

0.3%

NPL formation NPL ratio

19

Other (incl. interbank loans)

20

Ireland Irish loan book – key figures as at 31 March 2012

Loan portfolio Outstanding NPL NPL coverage

Owner occupied mortgages

9.5bn 14.8% 28%

Buy to let mortgages 3.2bn 24.3% 39%

SME /corporate 2.0bn 20.3% 55%

Real estate investment Real estate development

1.4bn 0.5bn

26.7% 83.4%

53% 72%

16.6bn 20.5% 42%

4%

2Q11 1Q11

11.1%

17.1%

4Q10

10.3%

16.2%

3Q10

9.0%

15.2%

2Q10

7.7%

14.8%

1Q10

6.9%

13.0%

4Q09

6.4%

11.9%

3Q09

6.3%

9.7%

2Q09

5.6%

1Q09

4.6%

6.9% 8.1%

15.9%

13.2%

Non-performing High Risk (probability of default > 6.4%)

Proportion of High Risk and NPLs

• Loan loss provisions in 1Q12 of 195m EUR (228m EUR in 4Q11). The loss after tax in 1Q12 was 126m EUR

• Economic conditions have remained difficult in the early months of the year as budget austerity measures take their toll. Marginally positive economic growth for 2012 is anticipated as a whole

• Unemployment seems to be stabilising. The pipeline of new FDI into Ireland remains encouraging, with new jobs as a result of FDI increasing by 20% in 2011. EU/IMF programme targets continue to be reached

• Residential mortgage arrears continue to deteriorate, although the pace of deterioration has slowed. KBC Ireland is implementing its Mortgage Arrears Resolution Strategy to provide sustainable mortgage restructures to customers in difficulty

• The final shape of the personal insolvency legislation is still unknown and could represent further risk to lenders

• Commercial customers with Irish domestic exposure continue to face challenges and commercial collateral values continue to suffer as all Irish banks deleverage

• Expanded product range driving strong acquisition of retail customers. Successful deposit campaign with increased deposit levels (+0.1bn EUR q-o-q to roughly 1.0bn EUR) and some 2,500 new customers in 1Q12

• Local tier-1 ratio to 11.16% at the end of 1Q12 through a capital increase of 75m EUR (11.06% at the end of 4Q11)

15.2%

16.4%

3Q11 4Q11

17.7%

2%

6%

8%

10%

12%

14%

16%

18%

20%

17.1% 18.3%

20.5%

1Q12

21

Hungary (1)

The underlying net loss of K&H Group for 1Q12 was 36m EUR. Included in this loss are: • 46m EUR post-tax impact of the full year 2012 bank tax • 2m EUR post-tax 5-year accounting impact of the HUF ‘buffer account’ bearing below market interest rates • 1.6m EUR post-tax 2012 impact of interest rate reduction for customers opting for government FX debtor relief

programme

Loan loss provisions in 1Q12 amounted to 28m EUR. The credit cost ratio (without the one-off impact of FX mortgage easement) came to 1.63% in 1Q12 versus 1.72% in 1Q11

NPL rose to 11.3% in 1Q12 (10.5% in 4Q11) • NPL Retail: 17.0% in 1Q12 (13.3% in 4Q11):

• Rising NPL in retail was driven by - Repayment of FX mortgages until 28 February reducing performing portfolio (+1.6%) - Effect of temporary termination of own easement program due to upcoming new government scheme

(+0.8%) - Portfolio deterioration (+1.3%), partially explained by customers reducing their installment payments in

anticipation of the new government relief scheme • The expectation is that the government scheme will reduce new NPL formation in 2H12

• Corporate: stable portfolio quality (NPL: 7.0% in 1Q12, 8.1% in 4Q11)

Hungary (2)

Hungarian loan book – key figures as at 31 March 2012

Loan portfolio Outstanding NPL NPL coverage

SME/Corporate 2.8bn 7.0% 68%

Retail 2.7bn 15.9% 67%

o/w private 2.2bn 17.0% 67%

o/w companies 0.4bn 9.9% 74%

5.5bn 11.3% 68%

0

2

4

6

8

10

12

14

2Q11

11.2%

9.1%

1Q11

12.0%

9.0%

4Q10

11.9%

3Q10

12.8%

8.1%

2Q10

12.8%

7.1%

1Q10

13.5%

6.3%

4Q09

12.6%

5.3%

3Q09

11.6%

5.2%

High Risk (probability of default > 6.4%) Non-performing

Proportion of NPLs*

11.4%

8.4% 9.4%

3Q11

11.2%

10.5%

4Q11

10.6%

11.3%

1Q12

22

23

Hungary (3) – FX conversion

Enacted government repayment scheme

≈ 30% of customers participated

30% of loan loss provisions deductible from 2011 bank tax FX conversion update: •636m EUR of FX loans repaid by the end of February 2012 •Total pre-tax effect for 2011 after recovering part of the banking tax, amounted to 119m EUR (booked in 2011)

Enacted Act on performing customers ≈ 55% *

Instalment to be split by all stakeholders through a buffer account for maximum 5y: • Up to 180 HUF/CHF: customer pays

principal and interest • Between 180-270 HUF/CHF:

• Principal paid by customer through buffer account

• Interest split between bank and state 50%-50%

• Above 270 HUF/CHF: state pays principal + interest

• Same for EUR with 250-340 limits Eligibility criteria: • Original loan value below 83k CHF / 67k

EUR • The debtor does not participate in any other

payment easement program • The debtor is not overdue more than 90 days

The FX prepayment will have a negative impact on NII at K&H of 30m EUR in 2012, gradually decreasing in the following years

Assuming a customer participation rate of 75%, the estimated pre-tax PV impact is 24m EUR over the 5-year period

Enacted Act on NPL customers ≈ 5% *

25% write-off of all eligible NPLs (90+ continuously from 30 Sep 2011): • Conversion into HUF following decision of

customer • 30% of loss from write-off deductible from

2012 bank tax

Eligibility criteria: • Deterioration of financial standing verified by

documents • Original loan amount below 83k CHF / 67k

EUR • Minimum amount due 260 EUR as of Sep 30

Additional support: • HUF interest subsidy based on further

eligibility criteria • Social cases sold to NAMC up to 25,000

properties at a value of 55/50/35% (per law passed on Dec 5)

Considering the existing average impairment level for the eligible customers, this measure has no substantial impact

* Eligible customers as a % of the total customers (FX mortgage loan portfolio as at 30 Sep 2011)

23


Loan book

Trading assets


24 24

Trading activities

1. Credit quality

Total Assets

2. Trading exposure

Less dependency on net (un)realised gains from FIFV within the ‘Market activities’ sub-unit (part of MEB), and more in particular on the dealing room results

Net (un)realised gains from FIFV within the ‘Market Activities’ sub-unit, 2005-2011

(on a pro forma basis)

Underlying net (un)realised gains from FIFV within ‘Market Activities’ (on a pro forma basis) as a % of group underlying total income


4. Sovereign bonds

24


9.8%

2006

6.7%

10.8%

2005 2007

8.3%

2011

7.4%

2008 2010

5.9%

2009

5.7%


Loan book

Trading assets


25 25


Total Assets

* Figures exclude all expired, unwound or terminated CDOs ** Taking into account the guarantee agreed with the Belgian State and a provision rate for MBIA at 70% *** See appendices for more details

1. Credit quality

2. Trading exposure


4. Sovereign bonds

25


Outstanding CDO exposure* (bn EUR) at the end of 1Q12

Notional Outstanding markdowns

- Hedged portfolio - Unhedged portfolio

10.1 5.5

-0.8 -3.8

TOTAL 15.6 -4.5

Amounts in bn EUR Total Outstanding value adjustments Claimed and settled losses - Of which impact of settled credit events

-4.5 -2.2

-1.9

Total notional amount fell by 1.7bn EUR q-o-q in 1Q12 Outstanding value adjustments amounted to 4.5bn EUR at the

end of 1Q12 Claimed and settled losses amounted to 2.2bn EUR Within the scope of the sensitivity tests, the value adjustments

reflect a 12.6% cumulative loss in the underlying corporate risk (approx. 86% of the underlying collateral consists of corporate reference names)

Reminder: CDO exposure largely written down or covered by a State guarantee

10% 20% 50%

Spread tightening +0.1bn +0.2bn +0.6bn

Spread widening -0.1bn -0.2bn -0.4bn

P&L impact** of a shift in corporate and ABS credit spreads (reflecting credit risk)


Loan book

Trading assets


26 26

Investment portfolio (cont’d)

Total Assets

Government bond investment portfolio (carrying value, excluding trading book) at KBC Bank of 35bn EUR (at end of 2011)

Geographical composition:

• Belgium: 47%

• CEE (mainly locally held portfolios): 35%

• Italy: 4%

• Spain: 3%

• Greece, Portugal and Ireland: 1%

• Other (almost all European): 10%

1. Credit quality

2. Trading exposure


4. Sovereign bonds

26






Wrap-up

Appendices

27 27

Contents

27

Shareholders’ equity

Funding & deposit base

28 28

Solvency and liquidity position

Total Liabilities & Equity

Capital adequacy

Liquidity position

With core tier-1 ratio of 10.1% at KBC Bank (excl. KBL epb) and 11.4% at KBC Group, KBC is well positioned to pursue organic growth

With loan-to-deposit ratio at 90%, need for refinancing in the market is limited compared to peers

Based on a preliminary analysis, funding & solvency seem to be manageable in light of the new ‘Basel’ proposals

28

Improved capital ratios at KBC Bank (excl. KBL)

29

16.6%

12.4%

FY10

15.4%

11.6%

9.6%

FY11

10.5%

FY09

14.4%

10.9%

9.0%

FY08

13.2%

9.6%

7.1%

FY07

12.2%

8.5%

7.2%

FY06

11.2%

8.5%

7.2%

1Q12

10.1%

12.1%

15.5%

CT1 T1 CAD

30

Strong capital position at KBC Group

Strong tier-1 ratio of 13.1% (15.5% pro forma) at KBC Group as at end 1Q12 comfortably meets the minimum required tier-1 ratio of 11% (under Basel 2)

Pro forma core tier-1 ratio – including the effect of divestments already signed – of 13.6% at KBC Group

First repayment, of 500m EUR, to the Federal Government in January 2012 at 15% premium. Intention is to make additional repayments in 2012 (with the aim being to repay at least 4.67bn EUR of the principal amount of the YES by the end of 2013)

13.6%

7.7%

15.5%

8.9%

7.2%

4.9%

1Q12*

13.1%

11.4%

6.1%

FY11

12.3%

10.6%

5.5%

FY10

12.6%

10.9%

5.6%

FY09

10.8%

9.2%

4.3%

FY08 1Q12 pro forma

T1 CT1 including State capital CT1 excluding State capital

* 1Q12 pro forma CT1 includes the impact of divestments already signed, but not yet closed (KBL epb, Warta and Kredyt Bank)

11,8%10,3% 9,9% 10,1% 9,5%

14,1% 13,7%11,8%

9,5%11,2%

9,6% 10,1% 10,1%8,6%

9,9% 10,0% 10,0%9,0% 9,4%

10,3%

1,8%

2,3% 2,5% 2,2%1,9%

1,9% 2,2%

4,5%1,9%

1,9%1,9%

3,3%1,0%

2,0% 1,4% 1,4%2,6%

1,2% 1,0% 0,9%1,7% 1,1%

12,7%

11,0%10,6%9,6%

10,7%

2,4%

2,1%

Citi PNC BoA JPM WellsFargo

UBS SEB CS KBC St. Ch. RBS Barclays DB Nordea INGBank

BNPP HSBC ISP CASA CB San. UCG SG Erste BBVA

Favourable peer group comparison

Source: Company filings as of Dec 11, BofAML Note: capital ratios under Basel 2.5 for EU banks and under Basel 1 for US banks (1) Excluding transition rules. (2) Including state capital and pro forma for divestments signed as of 28-Feb-12. (3) Proforma capital increase.

Avg: 10.6%

Avg: 12.4%

Tier 1 as of Dec 11

Core Tier 1 as of Dec 11

Avg: 12.4%

13.6% 12.6% 12.4% 12.3% 11.3% 16.0% 15.9% 12.9% 15.2% 13.7% 13.0% 14.6% 12.9% 12.2% 11.7% 11.6% 11.5% 11.5% 11.2% 11.1% 11.0% 10.9% 10.7% 10.4% 10.3%

US Banks EU Banks

(2)

Avg: 10.3%

(1) (1) (3)

FY11 pro forma (incl. KBL epb, Warta and KB)

31

32

A solid liquidity position (1)

• KBC Bank continues to have a strong retail/corporate deposit base in its core markets – resulting in a stable funding mix with a significant portion of the funding attracted from core customer segments & markets

14% 8% 8%9%7% 100%

1Q12

67%

3% 10%

8%

4%

FY11

69%

3% 9%

7%

3%

FY10

70%

7% 8%

7% 5% 3%

FY09

64%

7% 8%

8% 5%

FY08

66%

7% 7% 8%

5%

FY07

64%

8% 8% 10%

-4%

Funding from customers Certificates of deposit Total equity

Debt issues placed at institutional relations Net secured funding Net unsecured interbank funding

67% customer driven

33


• Funding needs 2012 covered and buffer established given:

• Our total mid/long-term wholesale funding (15bn EUR) only represents 8% of the total funding mix (which is relatively limited) – with only limited amounts maturing each year

• Long-term funding needs decrease as steps to reduce RWA continue

• We already issued 2.25bn EUR unsecured long-term debt YTD (1.25bn EUR 2y and 1.0bn EUR 5y)

• A regulation for the issuance of covered bonds is expected to be approved in Belgium

34


• LTD ratio of 90% at KBC Bank at the end of 1Q 2012. The decrease is the result of a strong deposit growth in retail/corporate and a recovery of the more volatile institutional deposits after the decrease in Q4 – (at that time due to a downgrade of our short-term rating by S&P and the risk aversion towards the European market in general)

LTD ratio at KBC Bank

FY11

94%

FY10

81%

FY09

88%

1Q12

90%

LTD ratio at Belgium BU*

FY11

58%

FY10

56%

FY09

56% 59%

1Q12

LTD ratio at CEE BU**

73%

FY09

74%

FY10

73%

FY11 1Q12

74%

* Excluding Centea (retroactively adjusted) ** Excluding Kredyt Bank and Absolut Bank (items earmarked for divestment in Group Centre)

The liquid asset buffer increased slightly amongst other things due to positive M2M evolutions on the portfolio The total amount of unencumbered assets declined moderately as more secured funding was attracted However, the liquidity position remains strong as: • Unencumbered assets are double the amount of the net recourse on short-term wholesale funding maturing in 1y • Funding coming from non-wholesale markets is stable funding from our core customer segments in our home markets


35

5,7

9,0

16,6 32,1

19,2

19,9

0

10

20

30

40

50

60

Gross ST funding Deposits at central bank

Net ST funding< 12 m

Liquid asset buffer

Short term unsecured funding KBC Bank (consolidated) as of end March 2012 (bn EUR)

CP/CD issues

Deposits at central bank Net ST funding< 12 m Unencumbered central bank eligible assets Central bank eligible assets encumbered due to net repo activity, incl. ECB tender Interbank deposits

35

36

Upcoming mid-term funding maturities

• KBC issued successfully 2 new benchmark senior unsecured deals for a total amount of 2.25bn EUR in 1Q 2012

• KBC Bank NV has 3 solid sources of EMTN Funding: • Public benchmark transactions • Structured Notes using the private placement format • Retail EMTN

• A regulation for the issuance of covered bonds is expected to be approved in Belgium

Breakdown funding maturity bucketsSenior vs. subordinated & callable vs. non-callable

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 >=2021

Maturity

Am

ount

mat

urin

g (in

€ m

io

eqv)

Senior funding non callable Senior funding callable

Subordinated funding non callable Subordinated funding callable

2012 refinancing needs covered, focus

on 2013

Note that this graph does not include the ECB-LTRO for a total amount of 8.7bn EUR (3y maturity)

37 37

Putting things into perspective...

• Term debt issuance in 2011: 4.3bn EUR (vs. 10bn - 43bn EUR for peer group)

• Term debt issuance 2011 / Total assets of KBC Bank 2011: 1.8% (vs. 1.2% - 6.3% for peer group)

• Term debt issuance 2011 / Total assets of KBC Group 2011: 1.5%

• Total LT debt outstanding / Total assets of KBC Bank 2011: 6.7% (vs. 5.5% - 25.6% for peer group)

• Total LT debt outstanding / Total assets of KBC Group 2011: 5.7%

37

Source: KBC Bank, Bloomberg, Company Reports – as of FY2011, Dealogic

Term Debt Issuance 2011 / Total Asset

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

DNB Bank Rabobank SHB ABN AMRO Intesa Lloyds BBVA Nordea BNP Paribas KBC Bank CASA Barclays





Wrap-up

Appendices

38 38

Contents

38

39 39

Wrap up (at KBC Group level)

39

• Well-developed bancassurance strategy and strong cross-selling capabilities • Strong franchise in Belgium with high and stable return levels (ROAC of 37% in 1Q12) • Access to growth in ‘new Europe’ (most mature markets in the region)

• Strongly improved underlying 1Q12 results: 455m EUR, thanks to markedly lower impairments and strong dealing room income. Core profitability in home markets remains intact in difficult conditions. We are sticking to our guidance for loan loss provisions in Ireland of 500-600m EUR for the full year 2012

• Decisive progress on divestments, with capital gains to come in 2H12

• Further reduction of volatile elements: • CDO/ABS exposure further reduced by roughly 2.2bn EUR notional • PIIGS exposure further down by 42% since the end of 2011

• Strong capital position: pro forma core tier-1 ratio of 13.6% at KBC Group, which is a significant improvement compared to the end of last year. First 500m EUR repayment to the Federal Government in January 2012 at 15% premium. Working towards further repayment(s) in 2012

• Strong liquidity position: Unencumbered assets are double the amount of the net recourse on short-term wholesale funding maturing in 1 year

• Funding needs 2012 covered and additional buffer in place thanks to the issuance of 2.25bn EUR unsecured long-term debt (1.25bn EUR 2y and 1.0bn EUR 5y), strong growth in customer deposits (+4% q-o-q) and additional buffer established with participation in LTRO2

Appendices

40

Appendices

41

KBC 2012 benchmarks + overview of outstanding benchmarks

KBC Bank CDS levels

Refocused KBC taking shape

Sovereign risk at KBC Group

Additional info about our CDO portfolio

Macroeconomic views

42

KBC 2012 Benchmarks

KBC 2Y Fixed – XS0754262755

• Notional: 1.25bn EUR • Issue Date: 7 March 2012 – Maturity: 7 March 2014 • Coupon: 3.625%, A, Act/Act • Re-offer spread: Mid Swap + 255bp (issue price 99.941%) • Joint lead managers: KBC, DZ, JP Morgan, Natixis

43

KBC 2012 Benchmarks

44

KBC 2012 Benchmarks

KBC 5Y Fixed – XS0764303490

• Notional: 1bn EUR • Issue Date: 27 March 2012 – Maturity: 27 March 2017 • Coupon: 4.50%, A, Act/Act • Re-offer spread: Mid Swap + 285bp (issue price 99.77%) • Joint lead managers: KBC, UBS, GS, Commerzbank

45

KBC 2012 Benchmarks

Outstanding Benchmarks

46

Issuer Curr EUR Equivalent Amount issued Coupon Settlement Date Maturity Date ISIN YEARKBC Ifima N.V. EUR 1,000,000,000 1,000,000,000 3-mth Euribor +35bp 26 Oct 2007 26/10/2012 XS0327159074 2012KBC Ifima N.V. EUR 1,602,615,000 1,602,615,000 6-mth Euribor -60bp 31 Mar 2008 31/03/2014 XS0340282739 2014KBC Ifima N.V. EUR 250,000,000 250,000,000 3-mth Euribor +85bp 04 Mar 2008 04/03/2013 XS0350935671 2013KBC Ifima N.V. EUR 250,000,000 250,000,000 3-mth Euribor +85bp 06 Mar 2008 06/03/2013 XS0351341150 2013KBC Ifima N.V. EUR 743,968,000 743,968,000 16 May 2008 16/05/2014 XS0352674682 2014KBC Ifima N.V. EUR 250,000,000 250,000,000 4.75 26-Jan-09 26/01/2014 XS0406774538 2014KBC Ifima N.V. EUR 1,250,000,000 1,250,000,000 4.5 17-Sep-09 17/09/2014 XS0452462723 2014KBC Ifima N.V. EUR 750,000,000 750,000,000 3.875 31 Mar 2010 31/03/2015 XS0498962124 2015KBC Ifima N.V. EUR 350,000,000 350,000,000 3-mth Euribor +165bp 19-Jul-10 19/07/2013 XS0527072937 2013KBC Ifima N.V. EUR 1,000,000,000 1,000,000,000 4 01-Mar-11 01/03/2013 XS0597921724 2013KBC Ifima N.V. EUR 750,000,000 750,000,000 5 16-Mar-11 16/03/2016 XS0605440345 2016KBC Ifima N.V. EUR 250,000,000 250,000,000 3.875 14/04/2011 31/03/2015 XS0498962124 2015KBC Ifima N.V. EUR 500,000,000 500,000,000 4.375 25/05/2011 26/10/2015 XS0630375912 2015KBC Ifima N.V. EUR 1,250,000,000 1,250,000,000 3.625 07/03/2012 07/03/2014 XS0754262755 2014KBC Ifima N.V. EUR 1,000,000,000 1,000,000,000 4.5 27/03/2012 27/03/2017 XS0764303490 2017

Tranche Report

Maturity profile KBC Ifima benchmark issues

0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2013 2014 2015 2016 2017

Mill

ions

mill

ions

(in

EUR

equi

vale

nt)

Main characteristics of outstanding T1 issues

47

SUBORDINATED BOND ISSUES KBC BANK

KBC Bank

Funding Trust II KBC Bank

Funding Trust IIIKBC Bank

Funding Trust IV KBC Bank NV KBC Bank NV KBC Bank NV

Amount issued EUR 280,000,000 USD 600,000,000 EUR 300,000,000 GBP 525,000,000 EUR 1,250,000,000 EUR 700,000,000Tendered EUR 161,300,000 USD 431,400,000 EUR 179,200,000 GBP 480,500,000

Net Amount EUR 118,700,000 USD 168,600,000 EUR 120,800,000 GBP 44.500,000

ISIN-code XS0099124793 USU2445QAA68 / US48239AAA79 US48239FAA66 / USU2445TAA08 BE0119284710 BE0934378747 XS0368735154

Call date 30/06/2009 02/11/2009 10/11/2009 19/12/2019 27/06/2013

Coupon 6.875% 9.86% 8.220% 6.202% 8.000% 8.000%

Step-up coupon 3m euribor + 300bps 3m usd libor + 405bps 3m usd libor + 405bps 3m gbp libor + 193bps no step-up no step-up

First (next) call date 30/06/2012 02/08/2012 10/08/2012 19/12/2019 14/05/2013 27/06/2013

ACPM - - - Yes Yes YesDividend Stopper - - - Yes Yes Yes

Conversion into PSC - - - Yes Yes Yes

Trigger - -- Supervisory Event or general

"concursus creditorum"Supervisory Event or general

"concursus creditorum"Supervisory Event or general

"concursus creditorum"

Dividend payments

Tender offer organized in September 2009

Dividends are only payable with respect to any Dividend Period if, and to the extent that, the Dividends for the corresponding Dividend Period are declared (or deemed declared for the purposes, and subject to the conditions

of the Bank Guarantuee or Holding Guarantee) on the securities owned by the Trust (together with the aforementioned guarantees, the assets of the Trust). Dividends will be paid to the extent that the Trust has funds

available for the payment of such Dividends from its assets.

Appendices

48


KBC Bank CDS levels




Macroeconomic views

49

KBC Bank CDS levels since January 2009

50

100

150

200

250

300

350

400

450

500

550

09/04/2009

09/06/2009

09/08/2009

09/10/2009

09/12/2009

09/02/2010

09/04/2010

09/06/2010

09/08/2010

09/10/2010

09/12/2010

09/02/2011

09/04/2011

09/06/2011

09/08/2011

09/10/2011

09/12/2011

09/02/2012

09/04/2012

Cred

it sp

read

leve

ls (i

n bp

s)

KBC CDS EUR SR 2Y Corp KBC CDS EUR SR 3Y Corp KBC CDS EUR SR 5Y CorpKBC CDS EUR SR 7Y Corp KBC CDS EUR SR 10Y Corp

Appendices

50


KBC Bank CDS levels




Macroeconomic views

Overview of divestment programme

Finalised:

KBC FP Convertible Bonds

KBC FP Asian Equity Derivatives

KBC FP Insurance Derivatives

KBC FP Reverse Mortgages

KBC Peel Hunt

KBC AM in the UK

KBC AM in Ireland

KBC Securities BIC

KBC Business Capital

Secura

KBC Concord Taiwan

KBC Securities Romania

KBC Securities Serbia

Organic wind-down of international MEB loan book outside home markets

Centea

Fidea

Signed:

KBL European Private Bankers

Warta

Kredyt Bank

Zagiel

In preparation/work-in-progress for 2012/2013

Absolut Bank

KBC Banka

NLB

Antwerp Diamond Bank

KBC Germany

KBC Real Estate Development

51

52

Strategic plan: Execution progresses at a brisk pace

Execution status, mid-May 2012:

Stream 1: Agreement to sell Warta signed in January 2012 Stream 2: The agreement between Santander and KBC to merge BZ WBK with Kredyt Bank was a

major step towards a full divestment of Kredyt Bank Stream 3: PIIGS exposure further down by 42% since the end of 2011 Stream 4: CDO/ABS exposure further reduced by roughly 2.2bn EUR notional Stream 5: RWA at 110.8bn EUR (pro forma) including B2.5/CRD3 impact, reduction better than

initially planned. Nevertheless, core profitability remains intact in difficult years

53

Stream 1: Divestment of Warta

• 20 January: agreement with Talanx announced

• Transaction price: 770m EUR ≈ 2.5x tangible BV

• Total capital relief of almost 0.7bn EUR

• Closure expected in 2H12

=> KBC’s tier-1 ratio will rise by ±0.7% (at close)

FY11

Total assets 1.5bn EUR

RWA 1.3bn EUR

Market share 8%-9%

Book value... 0.46bn EUR

... of which goodwill 0.15bn EUR

Underlying net profit 41m EUR

54

Stream 2: Divestment of Kredyt Bank

FY11

Total assets 9.3bn EUR

RWA 6.8bn EUR

Market share 4%

Book value... 0.6bn EUR

... of which goodwill 0.1bn EUR

Underlying net profit 68m EUR

• 28 February: agreement with Santander announced to merge Bank Zachodni WBK and Kredyt Bank in Poland

• KBC’s intention is to divest its remaining 9.99% stake, with a view to maximising value (thanks to significant synergies)

• Another major milestone in execution of disposal plan imposed by the European Commission in challenging market circumstances

• Total capital relief of 0.7bn EUR at closing

• Closure expected in 2H12

=> KBC’s tier-1 ratio will rise by ±0.8% (at close)

55

Stream 3: PIIGS exposure down by 42% since the end of 2011

Breakdown of government bond portfolio, banking and insurance (carrying value in bn EUR)

End 2010 End 1Q11 End 2Q11 End 3Q11 End 2011 End 1Q12 End of April 2012

Portugal 0.3 0.3 0.3 0.1 0.1 0.1 0.1

Ireland 0.5 0.4 0.4 0.4 0.4 0.4 0.4

Italy 6.4 6.2 6.1 3.8 2.1 2.0 2.0

Greece 0.6 0.6 0.5 0.3 0.2 0.0 0.0

Spain 2.2 2.2 2.2 2.1 1.9 1.9 0.3

TOTAL 10.0 9.7 9.6 6.7 4.8 4.4 2.8

Year-to-date, KBC reduced its PIIGS exposure (carrying amount) by roughly 42%:

• Greece: reduction of 0.2bn EUR • Italy: reduction of 0.1bn EUR • Spain: reduction of 1.6bn EUR • TOTAL reduction of 2.0bn EUR

KBC further reduced its exposure to Spanish sovereign bonds mainly during April against a cost of 34m EUR post-tax

56

Stream 4: CDO/ABS exposure reduced

• In 1Q12, two CDOs were de-risked, resulting in a reduction of the outstanding notional amount of CDOs by 1.7bn EUR. This had a negative impact on P&L of 64m EUR post-tax, but no material impact on the capital position

• During 1Q12, we sold 0.2bn EUR in notional amount of US ABS assets to the market, resulting in a 34m EUR post-tax P&L loss and a net saving of roughly 150m EUR of regulatory capital. Further on, the notional amount of the remaining ABS-portfolio decreased by 0.3bn EUR due to the natural run-off of the portfolio

• We will continue to look at reducing our ABS and CDO exposure, when and if this leads to additional capital relief and lower P&L volatility

0

2.500

5.000

7.500

10.000

12.500

15.000

17.500

20.000

22.500

25.000

27.500Notional(m EUR)

Maturity schedule of CDOs issued by KBC Financial Products

Equity/Cash reserves All Notes issued KBC SSS MBIA SSS Original maturity schedule total notional

Mar’12

Stream 5: RWA reduction better than initially planned

KBC Group risk weighted assets (in bn EUR)

-29%

end 1Q12, after divestment of

KBL epb, Warta and Kredyt Bank

110.8

end 2011, after divestment of KBL epb, Fidea

and Warta, including the B2.5 impact

119.1

end 2010

132.0

end 2009

143.4

end 2008

155.3

end 2007

147.0

end 2006

140.0

end 2005

128.7

end 2004

114.8

-44.5bn EUR

57

58

Core earnings power intact

Underlying gross operating income (before impairments)

Amounts in m EUR for KBC Group

FY11*

3,830

FY10

3,912

FY09

4,223

FY08

3,581

FY07

4,317

FY06

3,762

Core earnings power intact, with a significantly reduced risk profile (trading), despite drastic RWA reduction (including B2.5 impact) since the end of 2008: 36.2bn EUR per end 2011 and 44.5bn EUR per end 1Q12

* FY11 with neutralisation of impact of 5-5-5 bonds

59

Estimated RWA at the end of 2013

RWA impact (bn EUR)

6

89

2013e

110

Other

-3

Remaining divestments

-6

Poland

-8

Fidea

-2

KBL

-4

B3 + S2 + org. growth

+ shift to IRB Advanced

FY11

126

10

12

16

Counterp. RWA Operat. RWA Insurance Credit RWA

• Taking into account the sale of our Polish entities, the lower-than-initially-estimated impact on RWA of CRD3, B3 and Solvency2, the reduction in RWA due to the shift from IRB Foundation to IRB Advanced and lower-than-expected organic growth, we estimate that RWA will amount to110bn EUR at the end of 2013

Appendices

60


KBC Bank CDS levels




Macroeconomic views

Government bond portfolio

Notional investment of 53bn EUR in government bonds (excl trading book) at end 1Q12, primarily as a result of significant excess liquidity position and the reinvestment of insurance reserves into fixed income instruments

5%

10%45%

Portugal * Ireland *

Netherlands * Greece *

Austria * Germany **

Spain 4% Other

4% France

Italy

Slovakia** 2%

Hungary 4%

Poland 5%

Czech Rep.

14% Belgium

(*) 1%, (**) 2%

End 2010 (60bn EUR notional)

End 1Q12 (53bn EUR notional)

(*) 1%, (**) 2%

7%

5%

44%

Portugal Ireland *

Netherlands * Greece *

Austria ** Germany

3% Spain 4%

Other 6%

France

Italy

Slovakia** 2%

Hungary 4%

Poland 5%

Czech Rep. 15%

Belgium

End 2011 (51bn EUR notional)

6%

4%

44%

Czech Rep.

6%

16% Belgium

Greece Portugal

Spain

Ireland * Austria **

Netherlands *

Germany

4% Other

Italy

France

Slovakia **

Hungary

2%

Poland

5%

6%

3%

(*) 1%, (**) 2%

61

Appendices

62


KBC Bank CDS levels




Macroeconomic views

63

Breakdown of KBCs CDOs originated by KBC FP Breakdown of assets underlying to KBCs CDOs originated by KBC FP*

Direct Corporate Exposure, 53%

Tranched Corporate Exposure, 32%

Multi-Sector ABS Exposure, 14%

* % of total initial deal exposure; figures as of 10 April 2012

Corporate ratings distribution *

Corporate geographical distribution* Corporate industry distribution*

0%

2%

4%

6%

8%

10%

12%

Aaa

Aa1

Aa2

Aa3

A1 A2 A3 Baa1

Baa2

Baa3

Ba1

Ba2

Ba3

B1 B2 B3 Caa1

Caa2

Caa3

Ca C D/Credit Event

NR

Direct Corporate Portfolio

Tranched Corporate Portfolio

* Direct Corporate exposure as a % of the total Corporate Portfolio; Tranched Corporate exposure as a % of total Corporate Portfolio. Figures as of 10 April 2012, based on Moody’s Ratings

0% 2% 4% 6% 8% 10% 12%

Buildings & Real Estate

Banking

Insurance

Mining, Steel, Iron & Nonprecious Metals

Printing & Publishing

Utilities

Retail Stores

Automobile

Telecommunications

Finance

Oil & Gas

Electronics

Hotels, Motels, Inns and Gaming

Diversified Natural Resources, Precious Metals & Minerals

Cargo Transport

Personal Transportation

Diversified/Conglomerate Service

Leisure, Amusement, Entertainment

Home & Office Furnishings, Housewares, & Durable Consumer Products

Broadcasting & Entertainment

Chemicals, Plastics & Rubber

Diversified/Conglomerate Manufacturing

Other

Direct Corporate Portfolio

Tranched Corporate Portfolio

* Direct Corporate exposure as a % of the total Corporate Portfolio; Tranched Corporate exposure as a % of total Corporate Portfolio. Figures as of 10 April 2012

North America, 56%

Europe, 23%

Asia, 17%

Other, 4%

* Direct and Tranched Corporate exposure as a % of the total Corporate Portfolio; figures as of 10 April 2012

64

Maturity schedule for CDO portfolio

The total FP CDO exposure includes the ‘unhedged’ own investment portfolio as well as the ‘hedged’ portfolio that is insured by MBIA

0

2.500

5.000

7.500

10.000

12.500

15.000

17.500

20.000

22.500

25.000

27.500Notional(m EUR)

Maturity schedule of CDOs issued by KBC Financial Products

Equity/Cash reserves All Notes issued KBC SSS MBIA SSS Original maturity schedule total notional

Mar’12

65

Potential P&L impact for KBC

Potential capital impact for KBC

100% 100%

100% 10% (90% compensated by

equity guarantee)

10% (90% compensated by

cash guarantee)

10% (90% compensated by

cash guarantee)

12.2bn - 100%

1st tranche

10.5bn - 86%

2nd tranche

9.0bn - 74%

3rd tranche

1.7bn 1.5bn

9.0bn

State guarantee covering 12.2bn* euros’ worth of CDO-linked instruments • Scope

– CDO investments that were not yet written down to zero (2.1bn EUR) when the transaction was finalised

– CDO-linked exposure to MBIA, the US monoline insurer (10.1bn EUR)

• First and second tranche: 3.2bn EUR, impact on P&L borne in full by KBC, KBC has option to call on equity capital increase up to 1.3bn EUR (90% of 1.5bn EUR) from the Belgian State

• Third tranche: 9.0bn EUR, 10% of potential impact borne by KBC

• Instrument by instrument approach

Summary of government transactions (1)

• Excluding all cover for expired, unwound or terminated CDOs positions

66

7bn EUR worth of core capital securities subscribed by the Belgian Federal and Flemish Regional Governments

Summary of government transactions (2)

Belgian State Flemish Region Amount 3.5bn 3.5bn

Instrument Perpetual fully paid up new class of non-transferable securities qualifying as core capital

Ranking Pari passu with ordinary stock upon liquidation

Issuer KBC Group Proceeds used to subscribe ordinary share capital at KBC Bank (5.5bn) and KBC Insurance (1.5bn)

Issue Price 29.5 EUR

Interest coupon Conditional on payment of dividend to shareholders The higher of (i) 8.5% or (ii) 120% of the dividend for 2009 and 125% for 2010 onwards

Not tax deductible

Buyback option KBC Option for KBC to buy back the securities at 150% of the issue price (44.25)

Conversion option KBC

From December 2011 onwards, option for KBC to convert securities into shares (1 for 1). In that case, the State can ask for

cash at 115% (33.93) increasing every year by 5% to the maximum of 150%

No conversion option

Appendices

67


KBC Bank CDS levels




Macroeconomic views

(*) Euro-periphery = Portugal, Ireland, Italy, Greece & Spain

Source: KBC, Group Chief Economist Department

Real GDP-growth (QoQ annualised, in % )

Real GDP (Q4 2007 = 100)

Belgian economy falling into

a ‘technical recession’ in H2 2011...

68

...but confidence indicators up again

69

Producer confidence (standard deviation from LT-average)

Source: KBC, Group Chief Economist Department

(*) Euro-periphery = Portugal, Ireland, Italy, Greece & Spain

Consumer confidence (standard deviation from LT-average)

Unemployment rate (in % of labour force)

Belgian labour market keeping up quite well

Export driven growth expected in 2012

70

Evolution of consensus forecasts real GDP-growth 2012 (in %)

Economic outlook

Real GDP-growth (in %)

Real GDP growth (in %)

2011 2012 2013

US 1.7 2.0 2.1

EMU 1.6 -0.2 1.2

Belgium 1.9 0.2 1.4

Czech Rep. 1.7 0.0 2.0

Slovakia 3.3 1.5 2.2

Hungary 1.7 -0.3 1.0

Poland 4.3 3.5 3.4

Source: Consensus Economics Inc.

71 Source: KBC, Group Chief Economist Department

Intra-EMU interest differentials (yield 10 y. gov. bonds vs. Germany in bps.)

Public deficit reduction in line with Stability Programme Target

72 Source: KBC, Group Chief Economist Department

Belgium - Government budget balance (% of GDP)

KBC Group Organisation...Current situation (at end 1Q12) Including State core capital securities of...

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Transcript of KBC Group Organisation...Current situation (at end 1Q12) Including State core capital securities of...