KBC Group Company presentation - 2Q 2019 - KBC Bank

 
KBC Group Company presentation - 2Q 2019 - KBC Bank
KBC Group
Company presentation
2Q 2019

More information: www.kbc.com

KBC Group - Investor Relations Office – E-mail: IR4U@kbc.be

                                                              1
KBC Group Company presentation - 2Q 2019 - KBC Bank
Important information for investors
▪ This presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any
  security issued by the KBC Group.

▪ KBC believes that this presentation is reliable, although some information is condensed and therefore incomplete. 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. There is a risk that these statements may not be fulfilled and
  that future developments differ materially. Moreover, KBC does not undertake any obligation to update the presentation in line
  with new developments.

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

                                                                2
KBC Group Company presentation - 2Q 2019 - KBC Bank
2Q 2019 key takeaways

           2Q19 financial performance*
                                                                                                           1H19
❖ Commercial bank-insurance franchises in core                                    ➢    ROE 15.4%      *

  markets performed well                                                          ➢    Cost-income ratio 59% (adjusted for specific items)
❖ Customer loans and customer deposits**                                          ➢    Combined ratio 92%
  increased in most of our core countries                                         ➢    Credit cost ratio 0.12%
❖ Higher net interest income and lower net                                        ➢    Common equity ratio 15.6%** (B3, DC, fully loaded)
  interest margin                                                                 ➢    Leverage ratio 6.1% (fully loaded)
                                                                      Good net    ➢    NSFR 133% & LCR 140%
❖ Higher net fee and commission income
                                                                      result of
❖ Lower net gains from financial instruments at
  fair value and higher net other income
                                                                      745m                                 Net result
                                                                                                                                         745
                                                                      EUR in          556
                                                                                               692        701
                                                                                                                    621
❖ Excellent sales of non-life and life insurance
  y-o-y
                                                                      2Q19                                                     430

❖ Strict cost management
                                                                                      1Q18     2Q18       3Q18     4Q18       1Q19      2Q19
❖ Lower net impairments on loans
                                                                                  * when evenly spreading the bank tax throughout the year
❖ Solid solvency and liquidity                                                    ** 15.9% when including 1H19 net result taking into account the
                                                                                     payout ratio in FY2018 of 59% (dividend + AT1 coupon)
❖ Interim dividend of 1 EUR per share in Nov’19
 * Comparisons against the previous quarter unless otherwise stated
 ** Customer deposit volumes excluding debt certificates & repos
                                                                          3
KBC Group Company presentation - 2Q 2019 - KBC Bank
Overview of building blocks of the 2Q19 net result

                                                                      1.913
                                                                                       -30
                                                        170
                                        176

                                                                                                     -957
                         435
         1.132

                                                                                                                                   4
                                                                                                                     -40
                                                                                                                                          -144

                                                                                                                                                    745

          NII            NFCI        Technical        Other  Total Income Bank tax                Opex excl. Impairments          Other   Taxes   2Q19 net
                                     Insurance      Income**                                       bank tax                                        result
                                      Result*
Q-o-Q      0%             +6%           +17%            -1%            +3%                           +5%                                            +73%

Y-o-Y      +1%            -1%            -7%           +43%            +3%                           +2%                                            +8%

        * Earned premiums – technical charges + ceded reinsurance
        ** Dividend income + net result from FIFV + net realised result from debt instruments FV through OCI + net other income

                                                                                          4
KBC Group Company presentation - 2Q 2019 - KBC Bank
Main exceptional items
                                                                                2Q19                   1Q19                      2Q18
        Non-Life – Reassessment of claims provisions                                    -16m EUR
        Opex - Facilities expenses                                                                                                   +1m EUR
BE BU

        Opex – Staff expenses (management reorganisation costs)                         -6m EUR                 +8m EUR
        Tax - DTA impact                                                                                      +11m EUR
                       Total Exceptional Items BE BU                       -22m EUR                +19m EUR               + 1m EUR

        NOI - Settlement of legacy legal files                                                                  +6m EUR
CZ BU

        NOI – Revaluation of 55% stake in ČMSS                                          +82m EUR
                       Total Exceptional Items CZ BU                      +82m EUR                 +6m EUR

        IRL - NOI – Additional impact for the tracker mortgage review                    -4m EUR
IM BU

        IRL - Opex – Costs, mainly related to sale of part of legacy loan portf.         -2m EUR
        IRL - Impairments – On sale of legacy loan portfolio                            -12m EUR
                       Total Exceptional Items IM BU                         -18m EUR

        NOI – Settlement of old legal file                                                                                           -38m EUR
        Opex - Staff expenses (management reorganisation costs)                          -4m EUR
GC

        Tax - DTA impact                                                                +34m EUR                +4m EUR

                      Total Exceptional Items GC                          +30m EUR                 +4m EUR                -38m EUR

            Total Exceptional Items (pre-tax)                             +72m EUR                   +29m EUR                 -37m EUR

           Total Exceptional Items (post-tax)                                5 EUR
                                                                          +82m                       +25m EUR                 -37m EUR
KBC Group Company presentation - 2Q 2019 - KBC Bank
Contents

 1    2Q 2019 performance of KBC Group

 2    2Q 2019 performance of business units

 3    Strong solvency and solid liquidity

 4    Looking forward

Annex 1: Company profile
Annex 2: Other items

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KBC Group Company presentation - 2Q 2019 - KBC Bank
KBC Group

Section 1

2Q 2019 performance of KBC Group

               7
Net result at KBC Group
                                                                                               CONTRIBUTION OF BANKING ACTIVITIES
                                                                                                   TO KBC GROUP NET RESULT*
                                                                                                               603                              618
                                                                                                   574
                                                                                                                        539
                                                                                        461

                                                                                                                                    334

                         NET RESULT AT KBC GROUP*

                                                                745
                            692     701
                                             621                                        1Q18       2Q18       3Q18      4Q18       1Q19         2Q19
                 556
                                                       430

                                                                                              CONTRIBUTION OF INSURANCE ACTIVITIES
                                                                                                   TO KBC GROUP NET RESULT*
                                                                                                   155
                1Q18       2Q18    3Q18      4Q18     1Q19      2Q19
                                                                                                    74                                          124
                                                                                                               107       93
                                                                                        102
                                                                                                                                     96          61
                                                                                         42                        73    66
                                                                                                                                     33
                                                                                                   113
                                                                                         75                                          68          83
                                                                                                                   61    62

                                                                                        -15                                          -4
* Difference between net result at KBC Group and the sum of the banking and insurance              -32         -27       -35                     -20
 contribution is accounted for by the holding-company/group items
                                                                                        1Q18       2Q18       3Q18      4Q18        1Q19        2Q19

                                                                                                     Non-Life result    Non-technical & taxes

              Amounts in m EUR                                                      8
                                                                                                     Life result
Higher net interest income and lower net interest margin
                                          NII                          Amounts in m EUR

         1,125        1,117        1,136         1,166       1,129        1,132                          ▪ Net interest income (1,132m EUR)
             0 27         1 19    128 2 17      125 2 24    118 4 16          1 12                         • Slightly increased q-o-q and up by 1% y-o-y. Note that NII
        128          124                                                 114
                                                                                                             banking increased by 1% q-o-q and by 3% y-o-y
                                                                                                           • The q-o-q small increase was driven primarily by:
                                                1,016                     1,006
         970          972          989                        992                                            o continued good loan volume growth
                                                                                                             o small additional positive impact of short-term interest rate
                                                                                                                increases in the Czech Republic
         1Q18         2Q18         3Q18         4Q18         1Q19         2Q19                               o 1-month full consolidation of ČMSS (7m EUR)
          NII - netted positive impact of ALM FX swaps*          NII - Insurance
                                                                                                             o higher number of days
          NII - Holding-company/group                            NII - Banking
                                                                                                             almost fully offset by:
                                         NIM **                                                              o lower reinvestment yields in our euro area core countries
        2.01%        2.00%                      2.02%                                                        o pressure on commercial loan margins (on total outstanding
                                  1.98%                      1.98%
                                                                          1.94%                                 portfolio) in most core countries
                                                                                                             o slightly lower netted positive impact of ALM FX swaps

                                                                                                         ▪ Net interest margin (1.94%)
                                                                                                           • Down by 4 bps q-o-q and by 6 bps y-o-y due mainly to
                                                                                                             negative impact of lower reinvestment yields, pressure on
         1Q18         2Q18         3Q18         4Q18         1Q19         2Q19
                                                                                                             commercial loan margins (on total outstanding portfolio) and
   * From all ALM FX swap desks
   ** NIM is calculated excluding the dealing room and the net positive impact of ALM FX swaps & repos
                                                                                                             an increase of the interest-bearing assets (denominator)

   ORGANIC VOLUME TREND                             Total loans**                o/w retail mortgages         Customer deposits***                 AuM          Life reserves
   Volume                                                154bn                             66bn                       199bn                       210bn            28bn
   Growth q-o-q*                                           +1%                             +1%                          -2%                         0%              0%
   Growth y-o-y                                            +4%                             +4%                          0%                          -2%             -1%

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)                9
*** Customer deposits, including debt certificates but excluding repos. Customer deposit volumes excluding debt certificates & repos flat q-o-q and +3% y-o-y
Higher net fee and commission income
                                    F&C                        Amounts in m EUR
                                                                                        ▪ Net fee and commission income (435m EUR)
  450            438         424                                    435
                                                                                          • Up by 6% q-o-q and slightly down y-o-y
                                           407          410
                                                                                          • Q-o-q increase was the result chiefly of the following:
  215            223         219           225          219         230                     o Net F&C income from Asset Management Services
                                                                                               increased by 2% q-o-q as a result of higher management
                                                                                               fees from mutual funds and unit-linked life insurance
  299                        275
                                                                                               products, partly offset by lower entry fees
                 281                       255          264         270
                                                                                            o Net F&C income from banking services increased by 5%
                                                                                               q-o-q due mainly to seasonally higher fees from payment
  -64            -66          -70          -74          -73         -65
                                                                                               services, higher securities-related fees, 1-month full
 1Q18           2Q18         3Q18         4Q18          1Q19       2Q19                        consolidation of ČMSS (2m EUR), higher fees from credit
                                                                                               files & bank guarantees and higher network income
 Distribution          Banking services          Asset management services
                                                                                            o Distribution costs fell by 10% q-o-q due chiefly to seasonally
                                                                                               higher premium income in 1Q19
                                                                                          • Y-o-y decrease was mainly the result of the following:
                                                               Amounts in bn EUR
                                                                                            o Net F&C income from Asset Management Services
                                                                                               decreased by 4% y-o-y mainly as a result of lower
                                    AuM
                                                                                               management fees from mutual funds & unit-linked life
 213            214          213                        210        210                         insurance products
                                          200
                                                                                            o Net F&C income from banking services increased by 3%
                                                                                               y-o-y as higher securities-related fees, higher network
                                                                                               income and 1-month full consolidation of ČMSS (2m EUR),
                                                                                               more than offset lower fees from credit files & bank
                                                                                               guarantees
                                                                                            o Distribution costs fell by 1% y-o-y
 1Q18           2Q18        3Q18          4Q18         1Q19       2Q19
                                                                                        ▪ Assets under management (210bn EUR)
                                                                                          • Stabilised q-o-q, but decreased by 2% y-o-y
                                                                                          • The mutual fund business has seen net outflows in 2Q19,
                                                                                   10       mainly in investment advice
Insurance premium income up y-o-y
                   and good combined ratio

               PREMIUM INCOME (GROSS EARNED PREMIUMS)                                                   ▪ Insurance premium income (gross earned
                                                                825
                                                                                                          premiums) at 742m EUR
                                                                           766
                    714              707           696
                                                                                             742
                                                                                                          • Non-life premium income (425m) increased by 9%
                                                                416        351               317
                                                                                                            y-o-y
                    336              315           293
                                                                                                          • Life premium income (317m) down by 10% q-o-q
                                                                                                            and up by 1% y-o-y
                    378              392           403          409        415               425

                    1Q18             2Q18          3Q18         4Q18       1Q19          2Q19

                           Life premium income               Non-Life premium income

                               COMBINED RATIO (NON-LIFE)                                                ▪ The non-life combined ratio for 1H19
                                                                                                          amounted to 92%, a good number despite
                    90%        93%                     92%
                                            88%                 88%               88%                     high technical charges due mainly to large
                                                                                                          claims (storm and fire, especially in 1Q19) and
                                                                                                          a reassessment on claims provisions in 2Q19
                                                                                                          (-16m EUR), partly offset by ceded reinsurance
                                                                                                          result

                          1Q                      1H               9M                   FY

                                            2018         2019

                                                                                                   11
Amounts in m EUR
Non-life and life sales up y-o-y

                   NON-LIFE SALES (GROSS WRITTEN PREMIUM)                                      ▪ Sales of non-life insurance products
                                                                     534                         • Up by 8% y-o-y thanks to a good commercial
                    492
                                                                                                   performance in all major product lines in our core
                                                                                   412
                               382          378          373                                       markets and tariff increases

                   1Q18       2Q18         3Q18          4Q18        1Q19          2Q19

                                                                                               ▪ Sales of life insurance products
                                                                                                 • Decreased by 11% q-o-q and rose by 8% y-o-y
                                           LIFE SALES                                            • The q-o-q decrease was driven entirely by lower sales of
                    498                                  510         516
                                                                                   459
                                                                                                   guaranteed interest products and unit-linked products
                               426
                                            383
                                                                                                   in Belgium, partly offset by slightly higher sales of unit-
                    279                                  341         302                           linked products in the Czech Republic
                                                                                   261
                               261          230                                                  • The y-o-y increase was driven entirely by higher sales of
                                                                                                   unit-linked products in Belgium (and to a lesser extent
                    219                                  169         214           198             in the Czech Republic)
                               165          153
                                                                                                 • Sales of unit-linked products accounted for 43% of total
                   1Q18       2Q18         3Q18          4Q18        1Q19          2Q19            life insurance sales in 2Q19

                          Guaranteed interest products      Unit-linked products

                                                                                          12
Amounts in m EUR
Lower FV gains and higher net other income
                                           FV GAINS                                                      ▪ The lower q-o-q figures for net gains from financial
                     96
                                54
                                                                    99                                     instruments at fair value were attributable mainly
                                            79
                                                        2
                                                                    62
                                                                                                           to:
                     78         55          45         36                                                  • weak dealing room income
                                                                     11
                   4
                      19        33          22         32             29
                                                                               8
                                                                                  19
                                                                                                           • a negative change in ALM derivatives
                                           2 11                    -3
                   -5           -21                                            -8
                                                                                -22                        • lower net result on equity instruments (insurance) due
                                -14                    -62
                                                                                 -2                          to less favourable stock markets in 2Q19 compared to
                                                       -3                                                    1Q19
                    1Q18       2Q18        3Q18       4Q18         1Q19         2Q19                       • a negative change in market, credit and funding value
             Dealing room & other income     M2M ALM derivatives                                             adjustments in the Czech Republic (mainly as a result of
             MVA/CVA/FVA                     Net result on equity instruments (overlay insurance)            changes in the underlying market value of the derivatives
                                                                                                             portfolio due to lower long-term interest rates)

                                      NET OTHER INCOME                                                   ▪ Net other income amounted to 133m EUR. In
                                                                                 133
                                                                                                           addition to the normal run rate of around 50m EUR
                                                                                                           per quarter, 2Q19 was positively impacted by a
                                                                                                           one-off gain of 82m EUR related to the revaluation
                                                        76
                     71
                                            56                      59
                                                                                                           of the existing 55% stake in ČMSS
                                23

                    1Q18       2Q18        3Q18       4Q18         1Q19         2Q19

                                                                                                    13
Amounts in m EUR
Strict cost management
                                   OPERATING EXPENSES                                                               ▪ Excluding the 1-month full consolidation of ČMSS,
                                                                                                                      bank tax, FX effect and one-off costs, operating
                    1,291                                                    1,296
                                                                                                                      expenses in 1H19 rose by roughly 1% y-o-y
                                                                              382
                     371      966
                              24
                                                 981
                                                 26
                                                              996
                                                              41
                                                                                           988
                                                                                           30
                                                                                                                    ▪ Cost/income ratio (banking) adjusted for specific
                                                                                                                      items* at 60% in 2Q19 and 59% YTD (57% in FY18)
                                                                                                                      Cost/income ratio (banking): 53% in 2Q19 and
                     920      942                956          954             913          957                        63% YTD, distorted by the bank taxes
                                                                                                                    ▪ Operating expenses excluding bank tax increased
                                                                                                                      by 5% q-o-q primarily as a result of:
                     1Q18    2Q18            3Q18             4Q18           1Q19          2Q19
                                                                                                                             o 12m EUR negative one-offs in 2Q19 (of which 10m
                                     Bank tax          Operating expenses
                                                                                                                               management reorganisation costs in Belgium and 2m
                                                                                                                               EUR costs related to the sale of part of the legacy
                                                                                                                               loan portfolio in Ireland) versus a 8m EUR positive
                                                                                                                               one-off in 1Q19
    EXPECTED BANK TAX SPREAD IN 2019 (PRELIMINARY)**                                                                         o seasonally lower professional fee, facilities &
                   TOTAL          Upfront                           Spread out over the year                                   marketing expenses in 1Q19
                   2Q19     1Q19        2Q19           1Q19            2Q19          3Q19e        4Q19e                      o wage inflation in most countries
                                                                                                                             o higher depreciation & amortisation costs
    BE BU            4      273             4             0              0             0            0
                                                                                                                             o 1-month full consolidation of ČMSS (5m EUR)
    CZ BU            1       35             1             0              0             0            0
                                                                                                                    ▪ Operating expenses without bank tax increased by
    Hungary         22       26             0            20              22           23           24
                                                                                                                      2% y-o-y due mainly to negative one-offs in 2Q19
    Slovakia         3       4              -1            4              4             4            5                 and 1-month full consolidation of ČMSS
    Bulgaria        -1       16             -1            0              0             0            0
                                                                                                                    ▪ Total bank taxes (including ESRF contribution) are
    Ireland          1       3              0             1              1             1           23                 expected to increase from 462m EUR in FY18 to
    GC               0       0              0             0              0             0            0                 491m EUR in FY19
    TOTAL           30      356             3            25              27           28           52
                                                                                                          14
Amounts in m EUR                                                                                               *   See glossary (slide 77) for the exact definition   ** Still subject to changes
Overview of bank taxes*                                                                                                                                           Bank taxes of 277m EUR YTD.
                                                                                                                                                                          On a pro rata basis, bank taxes
                                                                                                                                                                          represented 11.1% of 1H19
                                                                                                                                                                          opex at the Belgium BU
                            KBC GROUP                                       Bank taxes of 413m EUR YTD.                                BELGIUM BU
                                                        382
                                                                            On a pro rata basis, bank taxes       273                                              273
      371
                                                                            represented 11.6% of 1H19              58                                               63
       98                                               109                 opex at KBC Group**

                                                                                                                  215                                              210
      273                                               273

                 24            26            41                    30                                                                       0           0                        4
                                                                  29 2                                                      -7 3
                22 2
                                                                                                                              -4
      1Q18       2Q18         3Q18          4Q18        1Q19      2Q19
                                                                                                                 1Q18       2Q18          3Q18         4Q18        1Q19      2Q19
                    European Single Resolution Fund (ESRF) contribution
                                                                                                                                   ESRF contribution         Common bank taxes
                    Common bank taxes
                                                                                                                                                                            Bank taxes of 100m EUR YTD.
                                                                                                                                                                            On a pro rata basis, bank
                                                                           Bank taxes of 36m EUR YTD.                                                                       taxes represented 19.2% of
                        CZECH REPUBLIC BU                                  On a pro rata basis, bank             INTERNATIONAL MARKETS BU                                   1H19 opex at the IM BU
                                                                           taxes represented 5.0% of
                                                         35                1H19 opex at the CZ BU                                                                   74
                                                                                                                   70
        29                                                                                                                                                          18
                                                                                                                   18

                                                         28                                                                                             41
        22                                                                                                                    27                                                 26
                                                                                                                                            26                      56
                                                                                                                   52
                                                                                                                              28                                                 28
         6          1                                     7            1
                                 0            0
                                                                                                                              -1                                              -2
       1Q18       2Q18         3Q18         4Q18        1Q19      2Q19                                            1Q18       2Q18         3Q18         4Q18        1Q19      2Q19

                                                                                                                                   ESRF contribution         Common bank taxes
                        ESRF contribution          Common bank taxes

* This refers solely to the bank taxes recognised in opex, and as such it does not take account of income tax expenses, non-recoverable VAT, etc.
** The C/I ratio adjusted for specific items of 59% in 1H19 amounts to roughly 51% excluding these bank taxes
                                                                                                   15
Lower asset impairments, benign credit cost ratio and
improved impaired loans ratio
                       ASSET IMPAIRMENT
                                                                69                       ▪ Lower asset impairments q-o-q
                                                                1
                                                   43                        40            • This was attributable mainly to:
                                                   13           67           4               o lower loan loss impairments in Belgium, as 1Q19 was
                                                   30                        36
    6
                  20
                                       6
                                                                                                impacted by a few corporate files
                                -8
   -63           -21              -2                                                         o small net loan loss impairment reversals in Hungary and
                  -1                                                                            Group Centre
   -56                                                                                       partly offset by:
  1Q18        2Q18        3Q18         4Q18         1Q19          2Q19                       o slightly higher loan loss impairments in the Czech Republic
  Other impairments      Impairments on financial assets at AC* and FVOCI                       and Slovakia
      * AC = Amortised Cost. Under IAS 39, impairments on L&R
                                                                                           • Note that in Ireland, 12m EUR net impairment releases were
                       CREDIT COST RATIO                                                     offset by charges related to the sale of part of the legacy loan
 0.42%                                                                                       portfolio

              0.23%

                            0.09%
                                                                            0.12%
                                                                                         ▪ The credit cost ratio amounted to 0.12% in 1H19 due to
                                                                                           higher gross impairments in Belgium
                                                -0.06%       -0.04%
 FY14          FY15             FY16             FY17         FY18          1H19

                   IMPAIRED LOANS RATIO
 5.9%
               5.5%             5.5%

                                                 4.3%         4.3%                       ▪ The impaired loans ratio improved to 3.7%, 2.1% of
                                                                            3.7%           which over 90 days past due. The q-o-q improvement was
                                                                                           mainly the result of the accounting write-off of certain
 3.5%          3.2%             3.2%
                                                 2.5%         2.4%
                                                                                           fully provisioned legacy loans in Ireland during 2Q19
                                                                            2.1%

 1Q18          2Q18         3Q18                 4Q18         1Q19          2Q19
                                                                                    16
         Impaired loans ratio              of which over 90 days past due
KBC Group

Section 2

2Q 2019 performance of business units

                17
Business profile

                                           BELGIUM    CZECH                                                 GROUP
                                                                 SLOVAKIA    HUNGARY   BULGARIA   IRELAND
                                                     REPUBLIC                                               CENTRE

2Q19 NET RESULT (in million euros)           388m      248m          11m       55m        29m       9m      4m

ALLOCATED CAPITAL (in billion euros)         6.7bn     1.7bn         0.6bn     0.7bn      0.4bn    0.7bn    0.3bn

LOANS (in billion euros)                     101bn     29bn          7bn       5bn        3bn       10bn

DEPOSITS (in billion euros)                  129bn     39bn          6bn       7bn        4bn        5bn

BRANCHES (end 2Q19)                          575       233           121       206        190*       16

Clients (end 2Q19)                           3.5m      3.7m          0.6m      1.6m       1.3m      0.3m

  * 17 Interlease branches were excluded

                                                                18
Belgium BU (1): net result of 388m EUR

                                  NET RESULT                                                            Net result at the Belgium Business Unit amounted
                      437
                                                                                                        to 388m EUR
                                 409
                                                                     388
                                                                                                           • The quarter under review was characterised by lower
                                             361                                                             net interest income, higher net fee and commission
                                                                                                             income, higher dividend income, lower trading and fair
                                                                                                             value income, higher net other income, a good
          243
                                                                                                             combined ratio, lower sales of life insurance products,
                                                         176                                                 lower operating expenses due entirely to lower bank
                                                                                                             taxes and lower impairment charges q-o-q
                                                                                                           • Customer deposits excluding debt certificates and
                                                                                                             repos rose by 3% y-o-y, while customer loans also
                                                                                                             increased by 4% y-o-y
         1Q18        2Q18        3Q18       4Q18        1Q19        2Q19

      Amounts in m EUR

ORGANIC VOLUME TREND                         Total loans**                 o/w retail mortgages           Customer deposits***                   AuM            Life reserves
Volume                                             101bn                           36bn                              129bn                      195bn              26bn
Growth q-o-q*                                      +1%                             +1%                                 -4%                         0%               0%
Growth y-o-y                                       +4%                             +3%                                 -1%                        -3%               -1%
* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)
*** Customer deposits, including debt certificates but excluding repos. Customer deposit volumes excluding debt certificates & repos flat q-o-q and +3% y-o-y

                                                                                          19
Belgium BU (2): lower NII and NIM
                                                                                 Amounts in m EUR
                                                NII
                649           642         637          647
                                                                                                           ▪ Net interest income (621m EUR)
                                                                    625          621
                19            11           8           11            7           10                          • Down by 1% q-o-q and by 3% y-o-y due mainly to:
                117           113         116          113          106          101
                                                                                                               o lower reinvestment yields
                                                                                                               o pressure on commercial loan margins (on total outstanding
                                                                                                                 portfolio)
                513           518         513          523          511          510
                                                                                                               partly offset by:
                                                                                                               o good loan volume growth
                                                                                                               o higher margin on new production mortgages
                                                                                                               o higher netted positive impact of FX swaps
               1Q18          2Q18        3Q18         4Q18         1Q19          2Q19                          o higher number of days
    NII - netted positive impact of ALM FX swaps*      NII - contribution of banking                           o lower funding cost
    NII - contribution of insurance

                                                                                                             • Note that NII banking roughly stabilised q-o-q and fell by 2%
* From all ALM FX swap desks
** NIM is calculated excluding the dealing room and the net positive impact of ALM FX swaps & repos            y-o-y

                                            NIM**
              1.73%         1.72%       1.69%         1.72%       1.71%         1.67%

                                                                                                           ▪ Net interest margin (1.67%)
                                                                                                             • Fell by 4 bps q-o-q and by 5 bps y-o-y due chiefly to the negative
                                                                                                               impact of lower reinvestment yields, pressure on commercial
                                                                                                               loan margins (on total outstanding portfolio) and an increase of
                                                                                                               the interest-bearing assets (denominator)

               1Q18          2Q18        3Q18         4Q18         1Q19          2Q19

                                                                                                      20
Credit margins in Belgium
                                       PRODUCT SPREAD ON CUSTOMER LOAN BOOK, OUTSTANDING
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
   1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

                                                                     Customer loans

                                                      PRODUCT SPREAD ON NEW PRODUCTION
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
   1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

                                                SME and corporate loans                 Mortgage loans

                                                                                       21
Belgium BU (3): higher net F&C income
                                                         Amounts in m EUR
                               F&C
                                                                                 ▪ Net fee and commission income (293m EUR)
 318         302         289                     286          293                  • Net F&C income increased by 2% q-o-q due mainly to:
                                     273
                                                                                     o higher management fees from mutual funds and unit-
                                                                                        linked life insurance products
                                                                                     o lower distribution costs
 365         354         342         330         342          343                    o higher securities-related fees
                                                                                     o higher fees from credit files & bank guarantees
                                                                                     partly offset by:
                                                                                     o lower entry fees
 -47         -53         -53         -57          -56         -51                    o lower fees from payment services
 1Q18       2Q18        3Q18         4Q18        1Q19        2Q19
                                                                                     o lower network income
  F&C - contribution of insurance      F&C - contribution of banking
                                                                                   • Fell by 3% y-o-y driven chiefly by lower entry and
                                                                                     management fees from mutual funds & unit-linked life
                                                                                     insurance products, lower fees from credit files & bank
                                                                                     guarantees and lower fees from payment services partly
                                                                                     offset by higher securities-related fees
                               AuM                      Amounts in bn EUR

 199        200          199                     195          195
                                     186

                                                                                 ▪ Assets under management (195bn EUR)
                                                                                   • Stabilised q-o-q as a positive price effect (+2%) was
                                                                                     offset by net outflows (-2%)
                                                                                   • Decreased by 3% y-o-y as a positive price effect (+1%)
                                                                                     was more than offset by net outflows (-4%)

1Q18       2Q18         3Q18         4Q18        1Q19        2Q19

                                                                            22
Belgium BU (4): higher y-o-y non-life sales,
good combined ratio

                                                                                      ▪ Sales of non-life insurance products
 NON-LIFE SALES (GROSS WRITTEN PREMIUM)                                                 • Increased by 4% y-o-y
   329                                                  340                             • Premium growth in all classes and tariff increases
                   262                                                    273
                                    252
                                                 238

  1Q18         2Q18              3Q18        4Q18       1Q19              2Q19
Amounts in m EUR

              COMBINED RATIO (NON-LIFE)
  93%        93%                    92%                                               ▪ Combined ratio amounted to 92% in 1H19
                         87%                 87%               87%
                                                                                        (87% in FY18), a good number despite high
                                                                                        technical charges due mainly to large claims
                                                                                        (storm and fire, especially in 1Q19) and a
                                                                                        reassessment on claims provisions in 2Q19 (-16m
                                                                                        EUR), partly offset by ceded reinsurance result

        1Q                     1H                  9M                FY

                               2018       2019
                                                                                 23
Belgium BU (5): lower life sales, good cross-selling ratios
                               LIFE SALES                                                    ▪ Sales of life insurance products
                                                             423
                                                                                               • Fell by 14% q-o-q driven by lower sales of both
        404                                   397                                                guaranteed interest products and unit-linked products
                                                                           362
                    333                                                                        • Increased by 9% y-o-y driven entirely by higher sales
                                282                          267                                 of unit-linked products due to commercial efforts
        250
                                              309                          230                 • As a result, guaranteed interest products and unit-
                    233
                                201                                                              linked products accounted for 64% and 36%,
                                                                                                 respectively, of life insurance sales in 2Q19
        154                                                  157           132
                    101          81            87

       1Q18        2Q18         3Q18          4Q18          1Q19           2Q19

               Guaranteed interest products         Unit-linked products
     Amounts in m EUR

        MORTGAGE-RELATED CROSS-SELLING RATIOS                                                ▪ Mortgage-related cross-selling ratios
90                                                                                             • 86.2% for property insurance
85                                                                                   86.2%     • 81.6% for life insurance
80                                                                                   81.6%
75
70   63.7%
65
60
                                  Property insurance                Life insurance
55
50
45    49.5%
40

                                                                                      24
Belgium BU (6): lower FV gains and higher net other income
                                         FV GAINS                   54                                   ▪ The lower q-o-q figures for net gains from
                              54
                                         53
                                                                                                           financial instruments at fair value were
                    34        22         14
                                                                    48          43                         primarily due to lower dealing room income
                              7                                                 17
                    24                   19
                                                                                8
                                                                                                           (given the very strong 1Q19) and lower net
                              33                                    30
                     19
                                         2
                                             18
                                                      2
                                                          12 3
                                                                      -1
                                                                                19
                                                                                -2
                                                                                                           result on equity instruments (insurance),
                   -2 -7      -8
                                                                  -23                                      partly offset by a positive change in ALM
                                                       -57
                                                                                                           derivatives and a positive change in market,
                                                       -40                                                 credit and funding value adjustments (mainly
                   1Q18      2Q18        3Q18         4Q18         1Q19        2Q19                        as a result of changes in the underlying
           Dealing room & other income       M2M ALM derivatives                                           market value of the derivative portfolio and
           MVA/CVA/FVA                       Net result on equity instruments (overlay insurance)          decreased credit spreads)

                                   NET OTHER INCOME
                                                          73                                             ▪ Net other income amounted to 50m EUR in
                      59                                                                                   2Q19, roughly in line with the normal run rate
                                49                                              50
                                             44                     45

                    1Q18      2Q18       3Q18          4Q18        1Q19        2Q19

                                                                                                    25
Amounts in m EUR
Belgium BU (7): lower opex entirely to lower bank taxes
and lower impairments

                    OPERATING EXPENSES                                                         ▪ Operating expenses: -29% q-o-q and +2% y-o-y
    822
                                                                                                 • Operating expenses without bank tax rose by 7% q-o-q due
                                                           807
                                                                                                   chiefly to
   273                                                     273
                                                                                                   o higher staff expenses, partly due to a 6m EUR negative
                                                                       575
                 562           559             541                      4
                                                                                                      one-off in 2Q19 as a result of a management
                                                                                                      reorganisation (versus a 8m EUR positive one-off in
                                                                                                      1Q19) and wage inflation, despite lower number of FTEs
   549           566                                       534         572                         o seasonally lower facilities & marketing expenses in 1Q19
                                                                                                   o higher depreciation & amortisation costs

                   -4
   1Q18         2Q18          3Q18             4Q18       1Q2019      2Q19
                                                                                                 • Operating expenses without bank tax increased by 1% y-o-y
                                                                                                   due mainly to the 6m negative one-off in 2Q19, higher ICT
                        Bank tax           Operating expenses
                                                                                                   and facilities expenses, partly offset by lower staff,
                                                                                                   professional fee and marketing costs
                        ASSET IMPAIRMENT                                                         • Adjusted for specific items, the C/I ratio amounted to 59%
                                                                                                   in 2Q19 and 58% YTD (58% in FY18)
                                                            83
                                                            1                                    • Cost/income ratio: 54% in 2Q19 and 66% YTD, distorted by
                                                                                                   the bank taxes

                                                49
                                                1
                                                            82
                                                                                               ▪ Loan loss impairments decreased to 30m EUR in
                   26
                                                                        31
                                                                        1
                                                                                                 2Q19 (compared with 82m EUR in 1Q19) as 1Q19 was
    13
                                                48                                               impacted by a few corporate files. Credit cost ratio
                                   4
                                                                        30
                                                                                                 amounted to 20 bps in 1H19 (9 bps in FY18)
    14
                              3 1
    -1
   1Q18          2Q18         3Q18             4Q18        1Q19       2Q19
                                                                                               ▪ Impaired loans ratio improved to 2.3%, 1.1% of which
                                                                                                 over 90 days past due
         Other impairments             Impairments on financial assets at AC* and FVOCI
            * AC = Amortised Cost. Under IAS 39, impairments on L&R
Amounts in m EUR                                                                          26
Net result at the Belgium BU

                                                                                 CONTRIBUTION OF BANKING ACTIVITIES TO
                                                                                    NET RESULT OF THE BELGIUM BU*
                                                                                                      325
                                                                                             302                                           289
                                                                                                                  279

         NET RESULT AT THE BELGIUM BU*
                                                                                165
               437                                                                                                            102
                        409
                                                        388
                                  361

   243                                                                          1Q18        2Q18     3Q18         4Q18       1Q19          2Q19

                                             176
                                                                                CONTRIBUTION OF INSURANCE ACTIVITIES TO
                                                                                    NET RESULT OF THE BELGIUM BU*
                                                                                             135
  1Q18        2Q18     3Q18       4Q18      1Q19       2Q19
                                                                                             58
                                                                                                       84          82                       99
                                                                                 78                                            74           37
                                                                                 20                    55          52
                                                                                                                               21
                                                                                             101
                                                                                 63                                            55           69
                                                                                                       48          49
                                                                                 -5                                            -2           -7
                                                                                             -24       -19        -19

* Difference between net profit at the Belgium Business Unit and the sum of     1Q18        2Q18     3Q18         4Q18       1Q19          2Q19
  the banking and insurance contribution is accounted for by the rounding up
                                                                                  Non-Life result   Life result    Non-technical & taxes
  or down of figures

Amounts in m EUR                                                           27
Czech Republic BU
                                                                        Amounts in m EUR                  Net result of 248m EUR in 2Q19
                                   NET RESULT
                                                                              248
                                                                                                          ▪ +40% q-o-q excluding FX effect due mainly to higher net
           171                       168            170          177
                                                                              82                            other income (including a one-off gain of 82m EUR related
                        145                                                                                 to the revaluation of the existing 55% stake in ČMSS), lower
                                                                                                            operating expenses (due entirely to lower bank taxes),
                                                                              166
                                                                                                            higher net fee & commission income and higher net
                                                                                                            interest income, partly offset by lower net results from
          1Q18         2Q18         3Q18            4Q18        1Q19         2Q19                           financial instruments at fair value and limited loan loss
                                   One-off gain ČMSS                                                        impairments
                                                                                                          ▪ Customer deposits (including debt certificates, but
                                    NII & NIM*                          Amounts in m EUR
                                                                                                            excluding repos) rose by 4% y-o-y, while customer loans
                                                                              308
                                                    291         302                                         increased by 3% y-o-y
          248          241          263
                                                3.25%           3.25%        3.18%
         3.02%        2.97%        3.04%

                                                                                                          Highlights
                                                                                                          ▪ Net interest income
                                                                                                              • +2% q-o-q and +28% y-o-y (both excl. FX effects)
                                                                                                              • Q-o-q increase: primarily due to the 1-month full consolidation of
         1Q18         2Q18         3Q18         4Q18            1Q19         2Q19                               ČMSS (+7m EUR), growth in loan volume and short-term
                                                                                                                increasing interest rates, partly offset by lower netted positive
                                   NIM        NII
                                                                                                                impact of ALM FX swaps and pressure on commercial margins (on
     * NIM excluding ČMSS. Note that the NIM of ČMSS amounted to 1.75% in 2Q19                                  total outstanding portfolio)
  ORGANIC VOLUME TREND                                     Total loans **            o/w retail mortgages             Customer deposits***                     AuM      Life reserves
  Volume                                                       29bn                            15bn                              39bn                          10.6bn      1.3bn
  Growth q-o-q*                                                 0%                              +1%                               +1%                           +4%         +1%
  Growth y-o-y                                                 +3%                              +4%                               +4%                          +10%         +8%
                                                                                                   28
* Non-annualised   ** Loans to customers, excluding reverse repos (and bonds)         *** Customer deposits, including debt certificates but excluding repos
Czech Republic BU
                                                                               ▪ Net F&C income
                           F&C                                                   • +15% q-o-q and +4% y-o-y (both excl. FX effects)
                                                       Amounts in m EUR          • Q-o-q increase driven mainly by higher fees from credit files &
       67
                64                     64
                                                              67                   bank guarantees, the 1-month full consolidation of ČMSS (+2m
                          62                                                       EUR) and higher network income
                                                58

                                                                               ▪ Assets under management
                                                                                 • 10.6bn EUR
                                                                                 • +4% q-o-q due to net inflows (+1%) and a positive price effect
                                                                                   (+3%)
                                                                                 • +10% y-o-y due to net inflows (+4%) and a positive price effect
   1Q18        2Q18      3Q18         4Q18     1Q19         2Q19                   (+6%)

                                                                               ▪ Trading and fair value income
                                                                                 • 31m EUR lower q-o-q net results from financial instruments at
                                                                                   fair value due mainly to lower dealing room results and a
                                                                                   negative q-o-q change in market, credit and funding value
                                                                                   adjustments (mainly as a result of changes in the underlying
                    CROSS-SELLING RATIOS                                           market value of the derivatives portfolio due to lower long-term
Mortg. & prop.         Mortg. & life risk    Cons.fin. & life risk                 interest rates)

                                                                               ▪ Insurance
61%     59%   59%
                        48%     48%   49%
                                                57%     54%    53%               • Insurance premium income (gross earned premium): 131m EUR
                                                                                   o Non-life premium income (70m EUR) +13% y-o-y excluding FX
                                                                                      effect, due to growth in all products
2017    2018 1H19       2017    2018 1H19       2017    2018 1H19
                                                                                   o Life premium income (61m EUR) +8% q-o-q and +5% y-o-y,
                                                                                      excluding FX effect. Q-o-q increase mainly in unit-linked single
                                                                                      premiums
                                                                          29     • Combined ratio of 94% in 1H19 (97% in FY18)
Czech Republic BU
                                                                                           ▪ Operating expenses
               OPERATING EXPENSES                           Amounts in m EUR
                                                                                             • 179m EUR;
                                                      204
189                       180             187                      179
                                                                                               o -12% q-o-q and +4% y-o-y (both excluding FX effect)
             173                                      35
 29           1
                           0               0
                                                                    1                          o +5% q-o-q and +4% y-o-y, both excluding FX effect and
                                                                                                  bank tax
                                                                                             • Q-o-q increase excluding FX effect and bank tax was due
                          180             186
                                                      169        178                           mainly to:
160          172
                                                                                               o 1-month full consolidation of ČMSS (5m EUR),
                                                                                               o wage inflation (partly offset by FTE reductions) in 2Q19
                                                                                               o traditionally lower facilities & marketing expenses in
1Q18         2Q18         3Q18            4Q18       1Q19        2Q19                             1Q19
                   Bank tax          Operating expenses                                      • Adjusted for specific items, C/I ratio amounted to roughly
                                                                                               48% in 2Q19 and 46% YTD (46% in FY18)
                                                                                             • Cost/income ratio at 38% in 2Q19 and 43% YTD, distorted
                                                                                               by the bank taxes and one-offs
                    ASSET IMPAIRMENT                        Amounts in m EUR

                              16
                                                                                           ▪ Loan loss and other impairment
              9               4                                                              • Limited loan loss impairments in 2Q19 (compared with net
                                          10                                                   loan loss impairment releases in 1Q19). Credit cost ratio
 7                                                                 7                           amounted to 0.04% in 1H19
              13              12                                   3
 6                                                                                                         2015      2016     2017      2018      1H19
                                                                   4
 1
              -4                                    -2 0                                         CCR       0.18%    0.11%     0.02%     0.03%    0.04%
                                                      -1
1Q18        2Q18          3Q18           4Q18        1Q19       2Q19
                                                                                             • Impaired loans ratio amounted to 2.5%, 1.5% of which >90
      Other impairments            Impairments on financial assets at AC* and FVOCI            days past due
         * AC = Amortised Cost. Under IAS 39, impairments on L&R                             • Impairment of 3m EUR on ‘other’ mainly as the result of
                                                                                               the write-off of a software project

                                                                                      30
International Markets BU
                                                                   Amounts in m EUR
                         163         NET RESULT
                                      141
                                                                                                                     Net result of 104m EUR
           137           26

           21                          31                                                                            ▪ Slovakia 11m EUR, Hungary 55m EUR, Ireland 9m EUR
                         55
                                                    93
                                                                                 104                                   and Bulgaria 29m EUR
                                       32                                        29
           57                                       19
                                                                 70
                                                    11           13               9
                                       51
           34
                         62
                                                    49
                                                                 14
                                                                                 55
                                                                                                                     Highlights (q-o-q results)
                                                                 25                                                  ▪ Slightly higher net interest income. NIM 2.65% in 2Q19 (-4 bps
                                       27
           23            19                         13           18
                                                                                  11                                   q-o-q and -16 bps y-o-y)
          1Q18          2Q18         3Q18          4Q18         1Q19             2Q19                                ▪ Higher net fee and commission income
                                                                                                                     ▪ Stable result from financial instruments at fair value
                       Bulgaria       Ireland       Hungary           Slovakia                                       ▪ Lower net other income
                                                                                                                     ▪ An excellent combined ratio of 86% in 1H19
                                                                                                                     ▪ Stable life insurance sales
                                                                                                                     ▪ Lower costs due entirely to lower bank taxes
                                                                                                                     ▪ Loan loss impairments in 2Q19 (compared with net loan loss
                                                                                                                       impairment releases in 1Q19)

    ORGANIC VOLUME TREND                                      Total loans **               o/w retail mortgages                   Customer deposits***              AuM     Life reserves
    Volume                                                         24bn                                15bn                                    23bn                 4.7bn      0.7bn
    Growth q-o-q*                                                     +2%                               +2%                                     0%                  +1%         +1%
    Growth y-o-y                                                      +5%                               +4%                                    +1%                  +10%        +5%
*     Non-annualised     **    Loans to customers, excluding reverse repos (and bonds)   ***   Customer deposits, including debt certificates but excluding repos

                                                                                                        31
International Markets BU - Slovakia

                                                                                   Net result of 11m EUR
                              NET RESULT                  Amounts in m EUR
                                   27

           23
                                                                                   Highlights (q-o-q results)
                     19
                                                     18                            ▪ Lower net interest income as margin pressure and lower
                                                                                     reinvestment yields more than offset the volume growth
                                          13
                                                               11                  ▪ Higher net fee & commission income due mainly to higher fees
                                                                                     from payment services
                                                                                   ▪ Lower net other income
                                                                                   ▪ Excellent combined ratio (81% in 1H19); lower life insurance
                                                                                     sales
          1Q18      2Q18        3Q18     4Q18     1Q19        2Q19
                                                                                   ▪ Lower operating expenses due entirely to lower bank taxes.
                                                                                     Higher operating expenses without bank tax due chiefly to
                                                                                     wage inflation and higher ICT expenses
                                                                                   ▪ Higher loan loss impairments; credit cost ratio of 0.27% in 1H19

                                                                                   Volume trend
 ORGANIC                     Total      o/w retail         Customer
                                                                                   ▪ Total customer loans rose by 2% q-o-q and by 7% y-o-y, the
 VOLUME TREND              loans **     mortgages         deposits***
                                                                                     latter due mainly to the continuously increasing mortgage
 Volume                      7bn           3bn                 6bn                   portfolio and corporate portfolio
 Growth q-o-q*              +2%            +3%                 -1%                 ▪ Total customer deposits decreased by 1% q-o-q (due to
                                                                                     corporate deposits) and stabilised y-o-y
 Growth y-o-y               +7%            +9%                  0%

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)
*** Customer deposits, including debt certificates but excluding repos

                                                                              32
International Markets BU - Hungary
                                                                                   Net result of 55m EUR
                           NET RESULT                     Amounts in m EUR

                    62
                                                                  55               Highlights (q-o-q results)
                              51         49                                        ▪ Higher net interest income excluding FX effect driven mainly by
                                                                                     volume growth
          34
                                                                                   ▪ Higher net fee and commission income excluding FX effect due
                                                     25                              mainly to strong fees from payment services in 2Q19
                                                                                     (compared to traditionally lower fees from payment
                                                                                     transactions in the first quarter)
                                                                                   ▪ Lower net results from financial instruments at fair value
         1Q18      2Q18      3Q18      4Q18         1Q19         2Q19              ▪ Good non-life commercial performance y-o-y in all major
                                                                                     product lines and growing average tariff in motor retail;
                                                                                     excellent combined ratio (89% in 1H19); higher sales of life
                                                                                     insurance products q-o-q
                                                                                   ▪ Lower operating expenses excluding FX effect due entirely to
                                                                                     lower bank taxes
                                                                                   ▪ Net impairment releases in retail. Credit cost ratio of -0.13% in
  ORGANIC                   Total       o/w retail             Customer              1H19
  VOLUME TREND            loans **      mortgages             deposits***
  Volume                    5bn               2bn                  7bn             Volume trend
  Growth q-o-q*             +4%               +2%                  -1%             ▪ Total customer loans rose by 4% q-o-q and by 8% y-o-y, the
  Growth y-o-y              +8%               +6%                  +4%               latter due mainly to mortgages, consumer loans and corporates
                                                                                   ▪ Total customer deposits -1% q-o-q (due mainly to SMEs) and
* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)          +4% y-o-y (due mainly to retail and SMEs)
*** Customer deposits, including debt certificates but excluding repos

                                                                              33
International Markets BU - Ireland
                                                                                       Net result of 9m EUR

           57                 NET RESULT                    Amounts in m EUR
                      55
                                                                                       Highlights (q-o-q results)
                                                                                       ▪ Slightly higher net interest income and net interest margin
                                                                                       ▪ Net other income was impacted by an additional 4m EUR for
                                 32                                                      the industry wide review of the tracker rate mortgage products
                                                                                         originated in Ireland before 2009
                                                                                       ▪ Lower expenses due mainly to lower bank taxes and lower ICT
                                                      14
                                          11
                                                                  9                      costs, despite a 2m EUR negative one-off cost related mainly to
                                                                                         the sale of part of the legacy loan portfolio
          1Q18       2Q18       3Q18     4Q18        1Q19        2Q19                  ▪ No impairments in 2Q19, as 12m EUR net impairment releases
                                                                                         were offset by charges related to the sale of part of the legacy
                                                                                         loan portfolio. Credit cost ratio of -0.23% in 1H19

  ORGANIC                     Total      o/w retail            Customer                Volume trend
  VOLUME TREND              loans **     mortgages            deposits***              ▪ Total customer loans rose by 1% q-o-q and by 2% y-o-y
                                                                                       ▪ Total customer deposits +1% q-o-q and -9% y-o-y, the latter as
  Volume                     10bn              9bn                    5bn
                                                                                         a result of the reduction in the overall funding requirement
  Growth q-o-q*              +1%               +1%                 +1%                   following legacy loan sales and the replacement of expensive
  Growth y-o-y               +2%               +2%                    -9%                corporate deposits by intragroup funding

* Non-annualised
** Loans to customers, excluding reverse repos (and bonds) and disregarding the
   sale of part of the legacy loan portfolio
*** Customer deposits, including debt certificates but excluding repos            34
International Markets BU - Bulgaria
                                                                                             Net result of 29m EUR
                                  NET RESULT                         Amounts in m EUR

                                      31
                                                                             29              Highlights (q-o-q results)
                          26                                                                 ▪ Banking: higher net result
             21                                                                                ▪ Stable total income
                                                   19
                                                                                               ▪ Lower operating expenses due mainly to lower bank taxes and
                                                                13                                facilities expenses
                                                                                               ▪ Lower loan loss impairments. Credit cost ratio of 0.15% in
                                                                                                  1H19
                                                                                             ▪ Insurance: lower net result
           1Q18         2Q18         3Q18         4Q18        1Q19         2Q19                ▪ Strong non-life commercial performance y-o-y in motor retail
                                                                                                  (both strong volume growth and growing average tariff);
                                                                                                  excellent combined ratio at 85% in 1H19
                                                                                               ▪ Lower life insurance sales q-o-q

                                                                                             Volume trend:
  ORGANIC                        Total            o/w retail              Customer           ▪ Total customer loans +4% q-o-q and +6% y-o-y, the latter mainly
  VOLUME TREND                 loans **           mortgages              deposits***
                                                                                               due to the increasing SME portfolio
  Volume                          3bn                   1bn                      4bn         ▪ Total customer loans: new bank portfolio +4% q-o-q and +7%
  Growth q-o-q*                   +4%                   +2%                       0%           y-o-y, while legacy -6% q-o-q and -24% y-o-y
                                                                                             ▪ Total customer deposits stabilised q-o-q and rose by 8% y-o-y
  Growth y-o-y                    +6%                   +3%                      +8%
                                                                                               (the latter due mainly to retail and corporates)
*    Non-annualised ** Loans to customers, excluding reverse repos (and bonds)
*** Customer deposits, including debt certificates but excluding repos

                                                                                        35
Group Centre
                                                                              Net result of 4m EUR
                                                                              The net result for the Group Centre comprises the results
                            NET RESULT             Amounts in m EUR
                                                                              from activities and/or decisions specifically made for
         5
                                               7
                                                             4
                                                                              group purposes (see table below for components)

                                     -3
                                                                              Highlights (q-o-q results)
                                                                              Q-o-q deterioration was attributable mainly to:
                                                                              ▪ lower net results from financial instruments at fair value due
                           -17
                                                                                largely to a negative change in M2M ALM derivatives
                    -53                                                       partly offset by
        1Q18       2Q18    3Q18     4Q18      1Q19         2Q19               ▪ lower income taxes, mainly thanks to a 34m EUR positive one-off
                                                                                related to a change in the FX hedging policy
                                                                              ▪ higher ceded reinsurance result
                                                                              ▪ lower operating expenses
                                                                              ▪ higher net other income

BREAKDOWN OF NET RESULT AT GROUP CENTRE                                    1Q18       2Q18         3Q18         4Q18        1Q19         2Q19
Group item (ongoing business)                                               -17         -63          -27         -18            2           -1
  Operating expenses of group activities                                    -17         -15          -18         -28          -18          -14
  Capital and treasury management                                            -4           8            4          11           -3           -7
  Holding of participations                                                   1           3           -4          -9          -11           21
  Group Re                                                                    7           6            3           3            0            8
  Other                                                                      -3         -64          -13           5           34           -9
Ongoing results of divestments and companies in run-down                     23          10           10          15            4            5
Total                                                                        5         -53          -17           -3           7            4

        Amounts in m EUR                                              36
Overview of contribution of business units to 1H19 result
                                                                                                                                        Amounts in m EUR
                                                           NET PROFIT – KBC GROUP
                                                                                           1H19 ROAC: 21%*

                                                       2,639            2,575           2,570
                                                               2,427

                                                                        1,090           1,322
                                                       1,463
                                                               1,314
                                                                                                   1,175

                                                                        1,485           1,248
                                                       1,176   1,113

                                                       2015    2016     2017            2018       1H19

                                                                       2H          1H

        NET PROFIT – BELGIUM                           NET PROFIT – CZECH REPUBLIC                               NET PROFIT – INTERNATIONAL MARKETS
                                     1H19 ROAC: 17%*                                           1H19 ROAC: 51%*                                       1H19 ROAC: 15%*
1,564              1,575
          1,432                   1,450
                                                                            702
                                                                                         654
                                                                596
706                    790                              542                                                                                        533
                                  770                                       338
          853                                                                           338                                428         444
                                                                276                                 425
                                                        271                                                                                        234
                                                                                                                                       152
                                           564                                                                      245    245
858                    785                                                                                                                                 175
                                  680                           320         364         316                         153                            299
          579                                           271                                                                            292
                                                                                                                           183
                                                                                                                    92
2015      2016      2017          2018    1H19         2015    2016     2017            2018       1H19             2015   2016        2017        2018    1H19

                  2H         1H                                        2H          1H                                             2H          1H

* Distorted by bank taxes
                                                                              37
Balance sheet:
                    Loans and deposits continue to grow in most core countries
                                                                                                                                                                        9%
                                                                                                                 BE                                        7%
                                                                                                                           Customer deposit volumes
                                                                                                   4%                      excluding debt certificates
                                                                                                                  3%       & repos +3% y-o-y

                                                                                                                                                                                  0%
       Y-O-Y ORGANIC* VOLUME GROWTH                                                                                          -1%                         Loans**      Retail Deposits***
                                                                                                 Loans**      Retail   Deposits***                                   mortgages
                                                                                                             mortgages                                                                 8%
                                                                                                                                                                6%
                                                                                                                      4%       4%
               4%                       4%                                                          3%                                                                       3%
                                                        Customer deposit volumes                                 CR
                                                        excluding debt certificates
                                                        & repos +3% y-o-y
                                                                                                  Loans**         Retail Deposits***                       Loans****     Retail   Deposits***
                      4%                                                                                         mortgages                                              mortgages

                                                                 0%
                                                                                                     8%
           Loans**                 Retail                Deposits***                                                  6%
                                  mortgages
                                                                                                                               4%
                                                                                                                                                                2%           2%

                                                                                                   Loans**        Retail Deposits***
                                                                                                                                                                                       -9%
                                                                                                                 mortgages
*      Volume growth excluding FX effects and divestments/acquisitions                                                                                      Loans**      Retail   Deposits***
**     Loans to customers, excluding reverse repos (and bonds)
***    Customer deposits, including debt certificates but excluding repos
                                                                                                                                                                        mortgages
                                                                                                            38
****   Total customer loans in Bulgaria: new bank portfolio +7% y-o-y, while legacy -24% y-o-y
KBC Group

Section 3

Strong solvency and
solid liquidity

                39
More stringent ECB approach re. dividend policy

Our unchanged dividend policy / capital distribution to shareholders
 •   Payout ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit
 •   Interim dividend of 1 EUR per share in November of each accounting year as an advance on the total dividend
 •   On top of the payout ratio of 50% of consolidated profit, each year, the Board of Directors will take a decision,
     at its discretion, on the distribution of the capital above the ‘Reference Capital Position‘

More stringent ECB approach since 1Q19, based on the ECB Umbrella Decision
 •   We can apply for interim profit recognition based on the ECB Umbrella Decision (Decision EU 2015/656 of 4
     February 2015), which states that the dividend to be deducted is the highest of (i) maximum pay-out according
     to dividend policy, (ii) average pay-out ratio over the last 3 years or (iii) last year’s pay-out ratio
 •   BUT since recently:
       • the ECB interprets ‘at least 50%’ as a range with an upper end of 100% pay-out
       • the ECB indicated that KBC should first accrue for the interim dividend of 1 EUR per share before any
            profit can be recognised (under the ECB Umbrella decision)

What does this mean in practice in the meantime?
 •   In anticipation of further clarification and reaching agreement upon our approach re. the interim profit
     recognition process going forward, no interim profit has been recognised for 1H19. This resulted in a CET1 ratio
     of 15.6% at the end of 1H19
 •   When including 1H19 net result taking into account 59% pay-out (dividend + AT1 coupon), in line with the
     payout ratio in FY2018, the CET1 ratio at KBC Group (Danish Compromise) amounted to 15.9% at the end of
     1H19
                                                             40
Strong capital position
Fully loaded Basel 3 CET1 ratio at KBC Group (Danish Compromise)                                                       ▪ The common equity ratio slightly decreased
 15.9%        15.8%         16.0%        16.0%         15.7% *       15.6% *
                                                                                                                         from 15.7% at the end of 1Q19 to 15.6%* at
                                                                                                                         the end of 2Q19 based on the Danish
                                                                                14.0% ‘Own Capital Target’               Compromise due mainly to the closing of the
                                                                                                                         ČMSS transaction, partly offset by final
                                                                               10.7% fully loaded regulatory minimum
                                                                                                                         dividend payment of KBC Insurance to KBC
                                                                                                                         Group. This clearly exceeds the minimum
                                                                                                                         capital requirements** set by the competent
                                                                                                                         supervisors of 10.7% fully loaded. Our ‘Own
                                                                                                                         Capital Target’ remained at 14.0% for 2019
                                                                                                                         after the update of the median CET1 ratio of
  1Q18         1H18          9M18          FY18         1Q19         1H19                                                our peer group (based on FY18 numbers)
 * No interim profit recognition given more stringent ECB approach                                                       *  See previous slide…Is 15.9% when including 1H19 net result
                                                                                                                            taking into account the payout ratio in FY2018 of 59% (dividend +
Fully loaded Basel 3 total capital ratio (Danish Compromise)                                                                AT1 coupon)
                                                                                                                         ** Excludes a pillar 2 guidance (P2G) of 1.0% CET1
                    20.8%            20.9%
  19.7%                                                19.2%           19.3%            19.2%
                    2.4% T2          2.3% T2
  2.3% T2                                              2.2% T2         2.1% T2          2.1% T2
 1.5% AT1          2.6% AT1         2.6% AT1
                                                      1.1% AT1        1.6% AT1         1.6% AT1                        ▪ The fully loaded total capital ratio fell from
                                                                                                                         19.3% at the end of 1Q19 to 19.2% at the
                                                                                                                         end of 2Q19

15.9% CET1       15.8% CET1        16.0%CET1        16.0% CET1       15.7% CET1       15.6% CET1

    1Q18             1H18             9M18              FY18            1Q19             1H19
                                                                                                           41
Fully loaded Basel 3 leverage ratio and Solvency II ratio

         Fully loaded Basel 3 leverage ratio at KBC Group            Fully loaded Basel 3 leverage ratio at KBC Bank
                    6.0%     6.1%    6.1%      6.0%   6.1%
            5.7%
                                                                              5.1%    5.2%    5.2%   5.2%    5.1%
                                                                       4.7%

            1Q18    1H18     9M18     FY18     1Q19   1H19             1Q18    1H18   9M18    FY18   1Q19    1H19

                           Solvency II ratio

                                                      1Q19   1H19     ▪ The decrease (-9% points) in the Solvency II ratio
                                                                        was mainly the result of lower interest rates,
Solvency II ratio                                     210%   201%       impact of sovereign spreads movements, lapse
                                                                        parameter updates and implementation of a new
                                                                        FX hedging policy

                                                                42
Strong and growing customer funding base with liquidity
              ratios remaining very strong
▪ KBC Bank continues to have a strong retail/mid-cap deposit base in its core markets – resulting in a stable funding mix with a significant portion of the funding
  attracted from core customer segments and markets
▪ Customer funding increased slightly at the expense of the certificates of deposits which decreased versus FY18. The elevated amount of ST wholesale funding
  remains as a result of continued ST arbitrage opportunities
              7%         9%       9%                                    9%                                 Funding from customers (m EUR)
    11%           1%                                      10%            11%            10%                                                                                                173.000
    1%                         1%            1%                                                    1%                                                          155.774       163.824
                  9%           8%            8%            4%            2%             6%         7%                       133.766   139.560        143.690
    8%                                                     8%            6%
                  8%           9%            8%                                         8%         8%
     8%                                                    8%            8%
                  2%           3%            3%                                         7%         4%
     3%                                                    7%            9%

                                                                                                                            FY14      FY15           FY16      FY17             FY18       2Q19

                 73%          71%           71%                                                    71%                                          3%
    69%                                                                                 69%
                                                          63%            63%
                                                                                                                   71%                               20%              Retail and SME
                                                                                                                 customer                                             Mid-cap

                                                                                                                  driven                                              Government and PSE
                                                                                                                                         77%
    FY12         FY13         FY14          FY15          FY16           FY17           FY18       2Q19
                     Unsecured Interbank Funding                         Total Equity
                     Secured Funding                                     Certificates of deposit
                     Debt issues placed at institutional relations       Funding from Customers

                Ratios            FY18             1H19              Regulatory requirement
                                                                                                                 ▪ NSFR is at 133% and LCR is at 140% by the end of 2Q19
                                                                                                                   • Both ratios were well above the regulatory requirement of 100%
                NSFR*            136%              133%                        ≥100%
                 LCR**           139%              140%                        ≥100%
  * Net Stable Funding Ratio (NSFR) is based on KBC Bank’s interpretation of the proposal of CRR amendment.
  ** Liquidity Coverage ratio (LCR) is based on the Delegated Act requirements. From EOY2017 onwards, KBC
  Bank discloses 12 months average LCR in accordance to EBA guidelines on LCR disclosure.                   43
KBC Group

Section 4

Looking forward

                  44
Looking forward

           ➢ In line with global economic developments, the European economy is currently going through a
             slowdown. Decreasing unemployment rates and growing labour shortages in some European
             economies, combined with gradually rising wage inflation, may continue to support private
Economic     consumption. Investment may also remain supportive for growth. The main factors that could
outlook      substantially impede European economic sentiment and growth remain the risk of further
             economic de-globalisation, including an escalation of trade conflicts, Brexit and political turmoil
             in some euro area countries

           ➢ Solid returns for all Business Units
           ➢ B4 impact (as of 1 January 2022) for KBC Group estimated at roughly 8bn EUR higher RWA on
             fully loaded basis at end 2018, corresponding with 9% RWA inflation and -1.3% points impact on
Group
             CET1 ratio
guidance   ➢ Referring to our dividend policy, KBC will pay an interim dividend of 1 EUR per share in
             November 2019, as an advance payment on the total dividend. The pay-out ratio policy (i.e.
             dividend + AT1 coupon) of at least 50% of consolidated profit is reconfirmed

           ➢ Next to the Belgium and Czech Republic Business Units, the International Markets Business Unit
Business
             has become a strong net result contributor (although 2018 figures were flattered by net
units        impairment releases)

                                               45
KBC Group

Annex 1

Company profile

                  46
KBC Group in a nutshell (1)

✓ We want to be among Europe’s best performing financial institutions! By achieving this,
   KBC wants to become the reference in bank-insurance in its core markets
   •     We are a leading European financial group with a focus on providing bank-insurance products and services to
         retail, SME and mid-cap clients, in our core countries: Belgium, Czech Republic, Slovakia, Hungary, Bulgaria and
         Ireland.

✓ Diversified and strong business performance
  … geographically
       • Mature markets (BE, CZ, IRL) versus developing markets (SK, HU, BG)
       • Economies of BE & 4 CEE-countries highly oriented towards Germany, while IRL is more oriented to the UK & US
       • Robust market position in all key markets & strong trends in loan and deposit growth

  … and from a business point of view                                                        KBC Group: topline diversification 2014-2018 (in %)

       • An integrated bank-insurer                                                   100%

       • Strongly developed & tailored AM business                                    80%        45%        47%        49%                  47%
                                                                                                                                 49%
       • Strong value creator with good operational
                                                                                      60%
         results through the cycle                         Diversification  Synergy
       • Unique selling proposition: in-depth                                         40%
                                                                                                 55%        53%        51%                  53%
         knowledge of local markets and profound                                      20%
                                                                                                                                 51%

         relationships with clients
                                                                                       0%
       • Integrated model creates cost synergies and results Customer Centricity                FY 2014   FY 2015     FY 2016   FY 2017   FY 2018
         in a complementary & optimised product offering                                        Net Interest Income          Other Income
       • Broadening ‘one-stop shop’ offering to our clients 47
KBC Group in a nutshell (2)

✓ High profitability
                                                                                                                                           CET1 generation
      C/I ratio                      Combined ratio                     Net result                             ROE                      before any deployment
                                                                                                                                       277 bps    279 bps    271 bps
                                                                          EUR
             57%                             88%                         2570m          EUR                    16%
                        59%                              92%                           1175m                             15%

                                                                                                                                        2016         2017     2018
      FY18
             1H19

✓ Solid capital position…                                                                                      ✓ … and robust liquidity positions
  Fully loaded Basel 3 CET1 ratio of KBC Group (Danish Compromise)
    15.9%       15.8%     16.0%       16.0%     15.7%*    15.6% *                                                        NSFR                  LCR
                                                                                  14.0% ‘Own Capital Target’

                                                                                  10.6% regulatory minimum**
                                                                                                                         136%
                                                                                                                                                 139%
                                                                                                                                133%                        140%

      1Q18           1H18          9M18           FY18           1Q19      1H19                                   FY18
                                                                                                                         1H19

  * No interim profit recognition given more stringent ECB approach
  ** 10.7% regulatory minimum in 2019                                             48
KBC Group in a nutshell (3)

✓ We aim to be one of the better capitalised financial institutions in Europe
  • Every year, we assess the CET1 ratios of a peer
                                                                  Flexible buffer for M&A   1.7%
    group of European banks active in the retail, SME
    and corporate client segments. We position
    ourselves on the fully loaded median CET1 ratio of
    the peer group (remained 14% at end of 2018)                                                       ‘Reference Capital
                                                                     Own capital target                     Position’
  • KBC Group’s 2% flexible buffer for potential add-on
                                                                            =               14.0%           = 15.7%
    M&A in our core markets decreased to 1.7% as the                  Median CET1
    acquisition of the 45% stake in ČMSS was closed at                 Peers (FL)
    the end of May 2019
  • This buffer comes on top of our ‘Own Capital
    Target’ and together they form the ‘Reference
    Capital Position’
  • Any M&A opportunity will be assessed subject to                                         2019
    very strict financial and strategic criteria

✓ Capital distribution to shareholders
  •   Payout ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit
  •   Interim dividend of 1 EUR per share in November of each accounting year as an advance on the total dividend
  •   On top of the payout ratio of 50% of consolidated profit, each year, the Board of Directors will take a decision,
      at its discretion, on the distribution of the capital above the ‘Reference Capital Position‘
                                                            49
Well-defined core markets: access to ‘new growth’ in Europe

                                                                                                            Market share
                                                                                                             (end 2018)            BE         CZ        SK        HU     BG     IRL
                                                                                                                                  20%        19%
                                                                                                           Loans and deposits                           10%        11%    10%    9%*
                                   3.5m clients                 3.7m clients
                                   575 branches                 233 branches                                                      32%        23%
                                   101bn EUR loans              29bn EUR loans                                                                                     13%   14%
                                                                                                           Investment funds                              7%
                                   129bn EUR dep.               39bn EUR dep.
           IRELAND
                                                                                           0.6m clients
                                                                                                                                                                         24%
                                                                                           121 branches    Life insurance         13%         8%         4%        3%
                                                                                           7bn EUR loans
                                   BELGIUM
                                                                                           6bn EUR dep.
                                                                                                                                  9%          8%                         11%
                                                                                                           Non-life insurance                                      7%
                                                                     CZECH REP                                                                           3%
  0.3m clients                                                               SLOVAKIA
  16 branches
  10bn EUR loans                                                              HUNGARY                         Real GDP
  5bn EUR dep.                                                                                                 growth             BE           CZ       SK        HU     BG     IRL
                                                     1.6m clients                                                               61%
                                                     206 branches
                                                                                                           % of Assets                      23%
                                                     5bn EUR loans                                                                                     4%         3%      2%     4%
                                                     7bn EUR dep.
                                                                                                                                                                                8.2%
                                                                                           BULGARIA                                                   4.1%       4.9%
                                                                                                                                            2.9%                         3.1%
                                                                                                           2018                 1.4%

                                                                          1.3m clients                                                                           4.3%           5.0%
                                                                                                                                           2.5%       3.5%               3.2%
                                                                          190 branches                                          1.2%
                                                                                                           2019e
                                                                          3bn EUR loans
                        Internat
Belgium      Czech
                        ional                                             4bn EUR dep.                                                                3.4%       3.5%    3.1%   3.0%
Business     Republic                                                                                                                      2.3%
             Business
                        Markets                                                                                                 1.1%
Unit                    Business
             Unit                                                                                          2020e
                        Unit

                                                                                                                                       GDP growth: KBC data, May ‘19
                                                                                      50
                                                                                                                                       * Retail segment
Business profile

                  BREAKDOWN OF ALLOCATED CAPITAL BY BUSINESS UNIT AS AT 30 JUNE 2019

                                                                        Czech Republic
                                                                  15%

                                Belgium 61%

                                                                   21%
                                                                           International Markets

                                                             3%
                                                              Group Centre

▪ KBC is a leading player (providing bank-insurance products and services to retail, SME and mid-cap clients) in
  Belgium, the Czech Republic and its 4 core countries in the International Markets Business Unit

                                                        51
Shareholder structure

                                      SHAREHOLDER STRUCTURE AT END 1H19

                                                           Other core
                                              MRBB
                                                         7.3%
                                       Cera      11.5%
                                              2.7%

                            KBC Ancora 18.6%

                                                                 59.9%
                                                                         Free float

▪ Roughly 40% 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 Belgian industrialist families
▪ The free float is held mainly by a large variety of international institutional investors

                                                           52
KBC Group going forward:
Aiming to be among the best performing financial institutions in Europe

                                            ▪   KBC wants to be among Europe’s best
                                                performing financial institutions. This will
                                                be achieved by:
                                                -   Strengthening our bank-insurance
                                                    business model for retail, SME and mid-
                                                    cap clients in our core markets, in a
                                                    highly cost-efficient way
                                                -   Focusing on sustainable and profitable
                                                    growth within the framework of solid risk,
                                                    capital and liquidity management

                                                -   Creating superior client satisfaction via a
                                                    seamless, multi-channel, client-centric
                                                    distribution approach
                                            ▪   By achieving this, KBC wants to become
                                                the reference in bank-insurance in its
                                                core markets

                                  53
KBC Group going forward:
 The bank-insurance business model, different countries, different
 stages of implementation

    Level 4: Integrated distribution and operation
Acting as a single operational company: bank and insurance operations           Belgium
working under unified governance and achieving commercial and non-
                          commercial synergies

              Level 3: Integrated distribution
       Acting as a single commercial company: bank and insurance
                                                                          Target for Central
       operations working under unified governance and achieving               Europe
                           commercial synergies

               Level 2: Exclusive distribution                          KBC targets to reach at
          Bank branches selling insurance products from intra-
                                                                        least level 3 in every
                     group insurance company as                         country, adapted to the
                   additional source of fee income
                                                                        local market structure and
                                                                        KBC’s market position in
                    Level 1: Non-exclusive
                         distribution
                                                                        banking and insurance
                    Bank branches selling insurance
                   products of third party insurers as
                    additional source of fee income

                                                                 54
More of the same…                     but differently…

•   Integrated distribution model     •   Client-centricity will be further      •   Investment in our digital
    according to a real-time              fine-tuned into ‘think client, but         presence (e.g., social media) to
    omni-channel approach                 design for a digital world’                enhance client relationships and
    remains key but client                                                           anticipate their needs
    interaction will change over      •   Digitalisation end-to-end, front-
    time. Technological                   and back-end, is the main lever:       •   Easy-to-access and convenient-
    development will be the                 • All processes digital                  to-use set-up for our clients
    driving force                           • Execution is the
                                                 differentiator                  •   Clients will drive the pace of
•   Human interface will still play                                                  action and change
    a crucial role                    •   Further increase efficiency and
                                          effectiveness of data management       •   Further development of a fast,
                                                                                     simple and agile organisation
•   Simplification is a               •   Set up an open architecture IT             structure
    prerequisite:                         package as core banking system for
      • In the way we operate             our International Markets Unit         •   Different speed and maturity in
      • Is a continuous effort                                                       different entities/core markets
      • Is part of our DNA            •   Improve the applications we offer
                                          our clients (one-stop-shop offering)   •   Adaptation to a more open
                                          via co-creation/partnerships with          architecture (with easy plug in
                                          Fintechs and other value chain             and out) to be future-proof and
                                          players                                    to create synergy for all

                                                            55
KBC the reference…
Group financial guidance (Investor visit 2017)

Guidance                                                                                                            End 2018
CAGR total income (‘16-’20)*                                              ≥ 2.25%           by 2020                 2.5% (CAGR FY18 – FY16)
C/I ratio banking excluding bank tax                                      ≤ 47%             by 2020                 51% (FY2018)
C/I ratio banking including bank tax                                      ≤ 54%             by 2020                 57.5% (FY2018)
Combined ratio                                                            ≤ 94%             by 2020                 88% (FY2018)
Dividend payout ratio                                                     ≥ 50%             as of now               59% (end 2018, incl. total dividend and
                                                                                                                             AT1 coupon)

 * Excluding marked-to-market valuations of ALM derivatives

 Regulatory requirements                                                                                              End 1H19
 Common equity ratio*excluding P2G                                       ≥ 10.7%              by 2019                 15.6%**
 Common equity ratio*including P2G                                       ≥ 11.7%              by 2019                 15.6%**
 MREL ratio                                                              ≥ 9.76%              by May ‘19              10.1%***
 NSFR                                                                    ≥ 100%               as of now               133%
 LCR                                                                     ≥ 100%               as of now               140%
 • Fully loaded, Danish Compromise. P2G = Pillar 2 guidance
 ** See slide 40… Is 15.9% when including 1H19 net result taking into account the payout ratio in FY2018 of 59% (dividend + AT1 coupon)
 *** MREL target as % of TLOF (Total Liabilities and Own Funds)

                                                                                 56
KBC the reference…
Group non-financial guidance (Investor visit 2017)

 Non-financial guidance:                End 2018                                   Non-financial guidance:                           End 2018
 CAGR Bank-Insurance clients            (growth                                    CAGR Bank-Insurance stable clients                (growth
                                         FY18-FY16)                                                                                   FY18-FY16)
 (1 Bank product + 1 Insurance product)                                            (3 Bk + 3 Ins products in Belgium;
                                                                                    2 Bk + 2 Ins products in CE)
 BU BE         > 2%      by 2020                  +1%                              BU BE                > 2%               by 2020   +1%

 BU CR         > 15%     by 2020                  +12%                             BU CR                > 15%              by 2020   +19%

 BU IM         > 10%     by 2020                  +31%                             BU IM                > 15%              by 2020   +33%

                              Non-financial guidance:                                                        End 2Q19
                              % Inbound contacts via omni-channel and
                              digital channel*
                              KBC Group**                  > 80%          by 2020                            80%

                              •  Clients interacting with KBC through at least one of the non-physical channels (digital or
                                 through a remote advisory centre), possibly in addition to contact through physical branches.
                                 This means that clients solely interacting with KBC through physical branches (or ATMs) are
                                 excluded
                              ** Bulgaria & PSB out of scope for Group target

                                                                              57
Inbound contacts via omni-channel and digital channel* at KBC Group** amounted
    to 80% in 2Q19… already reaching the Investor Visit target (≥ 80% by 2020)

•  Clients interacting with KBC through at least one of the non-physical channels (digital or through a remote advisory centre), possibly in addition to contact
   through physical branches. This means that clients solely interacting with KBC through physical branches (or ATMs) are excluded
** Bulgaria & PSB out of scope for Group target                                                            58
Realisation of omnichannel strategy* – client mix in 2Q19

                                       CZECH
      BELGIUM                                                         SLOVAKIA                          HUNGARY                          IRELAND                          BULGARIA***
                                      REPUBLIC

                                 14%                                10%                                                                  10%
23%        21%                                                                                    27%                                                                                   25%
                                              32%                                                                  32%              12%
                                                                                                                                                       40%
                                                                                   47%
                                                                                                                                                                                         1% 5%
                                                              43%                                                                                                       69%
                                54%                                                                                                    38%
      56%                                                                                               41%

                                                             Omnichannel clients                 Contact Centre only clients
                                                             Digital only clients                Branch or ATM only clients**

*   Clients interacting with KBC through at least one of the non-physical channels (digital or through a remote advisory centre), possibly in addition to contact through physical branches.
    This means that clients solely interacting with KBC through physical branches (or ATMs) are excluded
** Might be slightly underestimated
*** Bulgaria out of scope for Group target
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Digital Investments 2017-2020
                                  Cashflow 2017-2020 = 1.5bn EUR                                                                    Operating Expenses 2017-2020 = 1bn EUR

 Regulatory driven                                                               Organic growth
developments (IFRS                                                               or operational
                                                                                                                                                                        48              55
 9, CRS(*), MIFID,                 Regulatory                                      efficiencies                               43                   44
       etc.)                          20%                      Strategic
                                                                                                                                                   78                   83              90
                                                                Growth                                                        94
                                                                 36%

                            Strategic Transformation                                                                          112                 125                  127              128
                                      44%

                                                                                                                            2017                  2018                2019              2020
                              Omni-channel                                                                            Strategic Grow                  Strategic Transform                Regulatory
                            and core-banking
                                 system

    (*) The Common Reporting Standard (CRS) refers to a systematic and periodic exchange of information at international level aimed at preventing tax evasion. Information on the
    taxpayer in the country where the revenue was taken is exchanged with the country where the taxpayer has to pay tax. It concerns an exchange of information between as many as 53
    OECD countries in the first year (2017). By 2018, another 34 countries have joined.
                                                                                                        60
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