KBC Group Is Benelux boring UBS Benelux

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

Important information for investors n 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. n KBC believes that this presentation is reliable, although the information is condensed and therefore incomplete. n 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. n By reading this presentation, each investor is deemed to represent that it possesses sufficient expertise to understand the risks involved. 1

Contents n The Benelux demystified n What makes KBC different n Conclusions 2

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: n n n The The The Benelux Benelux is a small market is a “consolidated” market is a “low growth” market ia a “low efficiency / high cost” market is a low risk market is a “low margin / low profitability” market 3

Is the Be(ne)lux a small market ? n Banking assets per capita in the Benelux are at the high end of the European spectrum, higher than e. g. France and Germany n 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 n However, “the Benelux market does not exist”. It comprises 3 sovereign states, 3 languages, 3 markets with different players and different characteristics and dynamics n KBC is a Belux player, operating on the Belgian market with a significant (off-shore) wealth-management presence in Luxembourg Banking assets per capita (in ‘ 000 euros) Mutual funds, AUM per capita (in ‘ 000 euros) – May 2006 1 600 1 500 Avg EU 12 Source: ECB Source: Feri FMI 4

Is Belgium a consolidated market ? Share of the 5 largest banks in total assets Market share of 4 largest Belgian banks Avg EU 12 Source: ECB Source: Annual reports n Concentration is high, with top-5 institutions holding appx. 85% of the market n In Belgium, the bancassurance model prevails (all important players are bancassurers) and cross selling rates typically are very high: banking products X mortgages X asset management X insurance 5

Is Belgium a low growth market ? KBC, Belgium, % y/y Total loans Mort gages Customer deposits Life reserves Assets under management Growth, 1 H 06 +9% +15% +34% +21% Growth, 2005 +8% +16% +4% +38% +31% Growth, 2004 +5% +9% +10% +28% +20% n Belgium has experienced “high” growth in many fields Mutual funds, AUM, est. net sales n Core growth drivers are: (in m euros)June 2005 - May 2006 • 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 n Shift from traditional customer deposits to offbalance sheet products (incl. unit-linked Life) Source: Feri FMI driven by “overliquid” bank balance sheets (sector average loans to deposits at 75%) 6

Is Belgium a high cost market ? Branches/’ 000 population KBC, Cost/income ratio, Belgium Source: ECB n Average staff cost tends to be high with high fiscal/social securities charges and high proportion of higher-educated (better paid) staff n 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) 7

Is Belgium a low risk area ? Private loans to GDP KBC, loan loss ratio, Belgium Avg EU 12 Source: ECB n 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 n Credit exposure is well-diversified: • Mostly retail / SME business • The number of corporates with a market cap > 1 bn is only 30 * restated 8

Is Belgium a low profit market ? KBC, Belgium, NIM and gross revenue margin vs RWA* n NIM in Belgium is at the low side (1. 94% at KBC in 6 M 06) due to: • The high government bond portfolios (reinvestment of excess of deposits) • Competitive presssure in the mortgage field n 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% ! * The increase in gross margin as of 2005 is due to new accounting treatment (IFRS) 9

What makes KBC different to its peers ? We believe KBC has the following “competitive” advantages: n Geographical presence n Structuring capabilities in the Asset Management field n Distribution business model 10

KBC’s geographical presence Number of branches in 2005 Belgium Total KBC North South 946 80% 10% 4 564 60% 30% a. o. Fortis 1 109 - - Dexia Brussels 1 054 - - 804 - - Sector ING Source: Annual reports n 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 n This is highly important since the Northern region is much wealthier that the Southern Population (in m) GDP/ capita (euros) GDP growth Unemployment 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 2004 figures 11

KBC’s structuring capabilities in AM KBC, retail funds, market share, Belgium Breakdown of KBC’s retail funds, Belgium 30 June 2006 n Since >10 consecutive years, KBC has been able to increase its market share in mutual funds n 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) 12

KBC’s distribution business model n 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) n High level of “customer ownership” via branches and tied agents (limited share of broker channel) KBC, insurance distribution channels KBC, insurance, sales volume and market share 13

Conclusions KBC has an attractive proposition for you: n Interesting growth potential : in Belgium (and, moreover, in CEE) n Winning business model : bancassurance – asset management n Modest risk profile n Strict capital discipline and conservative acquisition policy at Group level 14

Additional information

KBC at a glance COMPANY PROFILE n Top-20 financial player in Europe with a 32 bn euros market cap n Active in banking, wealth management and insurance with a strongly integrated business model n Focus on retail and SME n Key geographical markets: • Top-3 position in Belgium (3 m customers) • Top-3 position in CEE (9 m customers) SHAREHOLDER PROPOSITION n Attractive franchises: • Interesting growth potential: CEE and (surprise? ) Belgium • Winning bancassurance model • Modest risk profile n Capital discipline: • Dividend policy oriented towards yearly increasing dividend • Conservative acquisition policy • 2006 share buy-back (1 bn) n Increased share visibility, liquidity, transparancy 16

Financial track record Return on equity Net profit In m EUR n Over the last years, the financial performance improved significantly. n FY 06 profit is expected to outgrow 3. 2 bn euros n KBC will update its mid-term financial objectives before the end of the year. *Pro forma for the “new” KBC group 17

Share return track record 18

Current valuation Key figures: n Share price: 84. 4 euros n Book value: 42. 9 euros n Daily traded volume 8 M 06 : 54 m euro Valuation relative to peer group 14. 8 14. 6 CEE-exposed banks 3 12. 2 11. 4 Euro-zone banks 4 10. 7 11. 0 KBC 1 10. 7 BEL banks 5 Recommendations: n Positive: 67% n Neutral: 33% n Negative: 0% unweighted P/E 2007 CEE banks 3 Analyst estimates: 1 n 2006 EPS consensus: 9. 11 euros (+46%)² n 2007 EPS consensus: 7. 87 euros n 2007 P/E: 10. 7 weighted P/E 2007 9. 8 Weighted and unweighted averages of IBES data : 3 OTP, Komercni, Pekao, BPH PBK, BRE 4 Erste, Unicredit, Soc. Gen. , Intesa BCI, BA-CA, RZB Int. 5 Top-20 DJ Euro Stoxx Banks 6 Fortis, Dexia Situation as at 4 September 2006 1 2 Smart consenus collected by KBC (21 estimates) 2006 estimates contain one-off items 19

Analysts’ opinions Broker Name analyst Tel Ron Heydenrijk +44 20 7678 0442 Ivan Lathouders Situation on 4 September 2006 Rating Target price Buy 110 +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 20

Contact information Investor Relations Office Luc Cool, Director of IR E-mail: investor. relations@kbc. com Surf to www. kbc. com for the latest update 21