kbc group / bank debt presentation november 2018 · this presentation containsnon-ifrs information...

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KBC Group / BankDebt presentationNovember 2018

KBC Group - Investor Relations Office – Email:More infomation: www.kbc.com

[email protected]

https://www.kbc.com/

mailto:[email protected]

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

KBC believes that this presentation is reliable, although some information is condensed and therefore incomplete. KBC cannot beheld 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 capitaltrends of KBC, involving numerous assumptions and uncertainties. There is a risk that these statements may not be fulfilled andthat future developments differ materially. Moreover, KBC does not undertake any obligation to update the presentation in linewith new developments.

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

Important information for investors

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Market share (end ’17) BE CZ SK HU BG IRL

Loans and deposits

Investment funds

Life insurance

Non-life insurance

GDP growth: KBC data, November ‘18 * Retail segment

11%20%

11%20%

10% 8%

22%33%7% 13% 13%

14% 8% 4% 3%21%

11%9%3%

7% 7%

Real GDP growth BE CZ SK HU BG IRL

% of Assets

2018e

2019e

2020e

3%3%

64%

20%2% 4%

1.5% 3.0% 3.5%3.6% 4.2%7.0%

1.4% 2.7% 3.7% 3.4% 3.4% 3.5%

IRELAND

BELGIUMCZECH REP

SLOVAKIA

HUNGARY

BULGARIA

*3.5m clients627 branches99bn EUR loans132bn EUR dep.

0.3m clients18 branches11bn EUR loans5bn EUR dep.




1.2m clients224 branches3bn EUR loans4bn EUR dep.Belgium

Business Unit

CzechRepublicBusiness Unit

InternationalMarkets Business Unit

2.3%1.2%3.0%3.5% 2.6% 3.3%

KBC PassportWell-defined core markets: access to ‘new growth’ in Europe

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KBC Group NV

KBC Bank KBC Insurance

100%100%

KBC IFIMA*

* All debt obligations of KBC IFIMA are unconditionally and irrevocably guaranteed by KBC Bank.

Retail and Wholesale EMTN

AT 1 Tier 2 Senior

Covered bond No public issuance

KBC Asset Management

48%

52%

No public issuance

MREL

KBC PassportGroup’s legal structure and issuer of debt instruments

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Contents

1 Strategy and business profile

Financial performance

3 Balance sheet

4 Solvency and liquidity

5 MREL strategy

Appendices

6 Looking forward Roughly 40% of KBC shares are owned by a syndicate of core

shareholders, providing continuity to pursue long-term strategicgoals. Committed shareholders include the Cera/KBC AncoraGroup (co-operative investment company), the Belgian farmers’association (MRBB) and a group of industrialist families

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

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KBC Ancora 18.6%

11.5%2.7%

Cera

MRBB7.4%

Other core

59.8%Free float

SHAREHOLDER STRUCTURE AT END 9M18

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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 andIreland.

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• An integrated bank-insurer• Strongly developed & tailored AM business• Strong value creator with good operational

results through the cycle• Unique selling proposition: in-depth

knowledge of local markets and profound relationships with clients

• Integrated model creates cost synergies and resultsin a complementary & optimised product offering

• Broadening ‘one-stop shop’ offering to our clients

Diversification Synergy

Customer Centricity

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High profitability

Solid capital position…

FY17

Net result

EUR 2575m 17%

ROE

55% 88%

C/I ratio Combined ratio

9M18

EUR 1948m 17%57% 88%

CET1 generationbefore any deployment

20162015 2017

296 bps 277 bps 279 bps

Fully loaded Basel 3 CET1 ratio of KBC Group (Danish Compromise)

14.0% ‘Own Capital Target’

10.6% regulatory minimum

15.7%

9M17 9M181Q17 1Q181H17 FY17 1H18

15.7% 15.9% 16.3% 15.9% 15.8% 16.0%

134%

NSFR

139%

LCR

134% 138%

… and robust liquidity positions

FY179M18


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• Every year, we assess the CET1 ratios of a peergroup of European banks active in the retail, SMEand corporate client segments. We positionourselves on the fully loaded median CET1 ratio ofthe peer group (14% at end of 2017)

• We want to keep a flexible buffer of up to 2% CET1for potential add-on M&A in our core markets

• This buffer comes on top of our ‘Own CapitalTarget’ and together they form the ‘ReferenceCapital Position’

• Any M&A opportunity will be assessed subject tovery strict financial and strategic criteria

Own capital target=

Median CET1 Peers (FL)

2017

2.0%

14.0%

‘Reference Capital Position’

= 16.0%

Flexible buffer for M&A

We aim to be one of the better capitalised financial institutions in Europe

• 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‘

Capital distribution to shareholders


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More of the same, but differentlyWants 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

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Our bank-insurance modelIn different countries and different stages of implementation

Bank branches selling insurance products from intra-group insurance company as

additional source of fee income

Bank branches selling insurance products of third party insurers as

additional source of fee income

Acting as a single operational company: bank and insurance operations working under unified governance and achieving commercial and non-

commercial synergies

Acting as a single commercial company: bank and insurance operations working under unified governance and achieving

commercial synergies

Level 4: Integrated distribution and operation

Level 3: Integrated distribution

Level 2: Exclusive distribution

Level 1: Non-exclusive distribution

KBC targets to reach at least level 3 in every country, adapted to the local market structure and KBC’s market position in banking and insurance.

Belgium

Target for Central Europe

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SustainablityThe core of our sustainability strategy

Increasing ourpositive impact

on society

Encouraging responsiblebehaviour on the part of

all employees

Limiting ouradverse impact

on society

The mindset of all KBC staff should go beyond regulation and compliance. Responsible behaviour is a requirement to implement an effective and credible sustainability strategy. Specific focus on responsible selling and responsible advice

Four focus domains that are close to our core activities

Financial literacy

Environmentalresponsibility

Stimulating entrepreneurship

Longevity or health

Strict policies for our day-to-day activities

Focus on sustainable investments

Reducing our own environmental footprint

2018 achievements:• Launch of the first Belgian Sustainable Pension Savings Fund for private individuals• Successful launch of the Green Bond Framework and issue of the Inaugural Green Bond of 500m EUR• SRI funds increased to 8.7 bn EUR by the end of 9M18• Updated KBC Sustainability Policies• KBC/CSOB announced to stop financing of Coal Fired Power Generation and Coal mining (current exposure phases out in 2023)

Please find more info in our 2017 Sustainability Report

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SustainablityOur non-financial environmental targets

Indicator Goal 2017 2016Share of renewables in total energy credit portfolio

Minimum 50% by 2030 41.2% 42.1%

Financing of coal-related activities Immediate stop of coal-related activities and gradual exit in the Czech Republic by 20231

Progress in line with target See 2018 achievements

Progress in line with target

Total GHG emissions (excluding commuter travel)

25% reduction by 2020 relative to 2015, both absolute and per FTE Long term target for a 50%-decrease by 2030

-28.9% (absolute)-28.2% (per FTE)

-14.03% (absolute)-14.1% (per FTE)

ISO 14001-certified environmental management system

ISO 14001 certification in all core countries at the end of 2017

All 6 core countries certified

Belgium, Slovakia, Hungary and Bulgaria

Business solutions in each of the focus domains

Develop sustainable banking and insurance products and services to meet a range of social and environmental challenges

See 2017 Sustainability & Annual Report for examples

For examples: seeSustainability & Annual Report 2016

Volume of SRI funds 10 billion EUR by end 20202 7.1 billion EUR 2.8 billion EUR

Awareness of SRI among both our staff and clients

Increase awareness and knowledge of SRI 100% awareness among Belgian sales teams through e-learning courses

Progress in line with target

(1) Except for financing of existing coal-fired district heating plants until 2035 under strict conditions, i.e. only to assist further ecological upgrades(2) Our initial target of 5 billion EUR by the end of 2018 had already been met by mid-2017

85/100 (Sector Leader) C (Prime, best in class) A- (Leadership)74

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SustainabilityFirst green bond issuance

On 23 May 2018, the Climate Bonds Standard Board approved the certification of the proposed KBC Green Bond

Application was made on the basis of the proposed inaugural allocation, focused on renewable energy and green residential real-estate loans

Certification

Verification

One year after issuance and until maturity, a limited assurance report on the allocation of the Green Bond proceeds to Eligible Assets to be provided by an external auditor

To be published on KBC website

KBC GREEN PORTFOLIO APPROACH

Green Bond

portfolio Green Bond

funding

Inclusion of existing and new Green Assets

KBC will ensure the availability of sufficient Green Assets to match Green funding

Deletion of ineligible or amortising Green Assets

At a first stage, in the context of the inaugural Green Bond, KBC allocated theproceeds to two green asset categories: renewable energy and residential real-estate loans.

Within those categories, KBC has identified more than EUR 1.3 billion of GreenAssets within its private and corporate client business lines in Belgium.

For future transactions, in cooperation with the relevant business teams, KBCaims to capture more green assets from other categories and expand the greeneligibility to more business lines and clients.

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More of the same… but differently…Enhanced channels for empowered clients

Creating superior client satisfaction via a seamless, multi-channel client-centric

distribution approach

Real time

Enhanced channels for empowered clients

Investing €1.5bn cash-flow (2017-20):• Further optimise our integrated distribution

model according to a real-time omni-channel approach

• Prepare our applications to engage with Fintechs and other value chain players

• Invest in our digital presence (e.g., social media) to enhance client relationships and anticipate their needs

• Further increase efficiency and effectiveness of data management

• Set up an open architecture IT package as core banking system for our International Markets Business Unit

Operating Expenses 2017-2020 = 1bn EUR

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Guidance

CAGR total income (‘16-’20)* ≥ 2.25% by 2020

C/I ratio banking excluding bank tax ≤ 47% by 2020

C/I ratio banking including bank tax ≤ 54% by 2020

Combined ratio ≤ 94% by 2020

Dividend payout ratio ≥ 50% as of now

* Excluding marked-to-market valuations of ALM derivatives

Regulatory requirements

Common equity ratio* excluding P2G ≥ 10.6% by 2019

Common equity ratio* including P2G ≥ 11.6% by 2019MREL ratio ≥ 25.9% by May ‘19NSFR ≥ 100% as of nowLCR ≥ 100% as of now

* Fully loaded, Danish Compromise. P2G = Pillar 2 guidance.

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

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Non-financial guidance: % Inbound contacts via omni-channel and digital channel*

KBC Group** > 80% by 2020

Non-financial guidance: CAGR Bank-Insurance clients (1 bank product + 1 insurance product)

BU BE > 2% by 2020

BU CR > 15% by 2020

BU IM > 10% by 2020

Non-financial guidance: CAGR Bank-Insurance stable clients (3 bk + 3 ins products in Belgium; 2 bk + 2 ins products in CEE)

BU BE > 2% by 2020

BU CR > 15% by 2020

BU IM > 15% by 2020

• Clients interacting with KBC through at least one of the non-physicalchannels (digital or through a remote advisory centre), possibly in additionto contact through physical branches. This means that clients solelyinteracting with KBC through physical branches (or ATMs) are excluded

** Bulgaria & PSB out of scope for Group target

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

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Contents

2

Strategy and business profile1

Financial performance

3 Balance sheet


5 MREL strategy

Appendices

6 Looking forward

BREAKDOWN OF ALLOCATED CAPITAL BY BUSINESS UNIT AS AT

30 SEPTEMBER 2018

61%

16%

21%

International Markets

Belgium

Czech Republic

2%Group Centre

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Commercial bank-insurance franchises in coremarkets performed well

Customer loans and customer depositsincreased in most of our core countries

Good net interest income and net interestmargin

Lower net fee and commission income

Higher net gains from financial instruments atfair value and net other income

Excellent sales of non-life insurance and lowersales of life insurance y-o-y

Costs up, partly due to one-offs

Net impairment releases on loans

Solid solvency and liquidity

An interim dividend of 1 EUR per share (asadvance payment on the total 2018 dividend)will be paid on 16 November 2018

Comparisons against the previous quarter unless otherwise stated

Excellent net result of 701mEUR in 3Q18

ROE 17%* Cost-income ratio 57% (excl. specfic items)

Combined ratio 88% Credit cost ratio -0.07% Common equity ratio 16.0% (B3, DC, fully loaded)

Leverage ratio 6.1% (fully loaded)

NSFR 134% & LCR 138%

9M18

1Q184Q17 2Q18 3Q183Q17

630

1Q17 2Q17

855

691

399

556

692 701

* when evenly spreading the bank tax throughout the year

3Q18 financial performance

Net result

KBC Group3Q 2018 key takeaways

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Main exceptional items

3Q18 2Q18

BE B

UIM

BU

GC

Opex - Facility expenses

Total Exceptional Items BE BU

-9m EUR -37m EUR -5m EUR

Total Exceptional Items IM BU

Total Exceptional Items GC

Total Exceptional Items (pre-tax)

Total Exceptional Items (post-tax) -7m EUR -37m EUR -15m EUR

3Q17

IRL – NOI - Provisions related to the tracker mortgage reviewIRL – Opex - Costs related to sale of part of legacy loan portf.

-54m EUR

NOI – Settlement of legacy legal file -38m EUR

+1m EUR

-54m EUR

-38m EUR

Technical charges non-life: release of provisionsTechnical charges life: release of provisions

+1m EUR+26m EUR+23m EUR

+49m EUR

+5m EUR

+3m EUR

CZ B

U Opex – Restructuring costs

Total Exceptional Items CZ BU -5m EUR

-5m EUR

-3m EUR

-3m EUR

Opex – Expenses for early retirement -4m EUR

Opex – Expenses for early retirement -2m EUR

-4m EUR

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Net result at KBC Group

* Difference between net result at KBC Group and the sum of the banking and insurancecontribution is accounted for by the holding-company/group items

CONTRIBUTION OF BANKING ACTIVITIES TO KBC GROUP NET RESULT*

701

1Q17 2Q17 3Q183Q17 4Q17 1Q18 2Q18

630

855

691

399

556

692

NET RESULT AT KBC GROUP*

3Q18

461

1Q17 2Q17 2Q18

330

1Q18

603574

750

4Q17

575

3Q17

526

61 82 93 84 75113

61

7864

96

27 42

74

73

-29 -33 -52 -34 -32 -27

2Q181Q17 2Q17 4Q173Q17

-15

1Q18 3Q18

111

155

113

137

78 102107

CONTRIBUTION OF INSURANCE ACTIVITIES TO KBC GROUP NET RESULT*

Amounts in m EUR

Non-Life result

Life result

Non-technical & taxes

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Good net interest income and net interest margin

Net interest income (1,136m EUR)• Up by 2% both q-o-q and y-o-y. Note that NII banking

increased by 2% q-o-q and by 5% y-o-y• The q-o-q increase was driven primarily by:

o additional positive impact of both short- & long-terminterest rate increases in the Czech Republic

o continued good loan volume growtho lower funding costspartly offset by:o lower netted positive impact of ALM FX swapso lower reinvestment yields in our eurozone core countrieso pressure on commercial loan margins in most core

countries

Net interest margin (1.98%)• Down by 2 bps q-o-q• Up by 2 bps y-o-y thanks to lower funding costs (due mainly to

the call of the CoCo) and the positive impact of repo rate hikesin the Czech Republic

NIM (pro forma for 2017***)

NII (pro forma for 2017*)

907 928 946 952 970 972 989

143 142 144 135 128 124 1283 228 21 22 47 27 19

2Q17

1,117

3Q17

1,136

3

1Q184Q171Q17

1,1251,081

3 0 1

1,114

2Q18

172

3Q18

1,094 1,137

3Q181Q17 2Q17 3Q17

1.93%

4Q17 2Q181Q18

1.96% 1.96% 1.97% 2.01% 2.00% 1.98%

Amounts in m EUR

NII - Holding-company/groupNII - netted positive impact of ALM FX swaps**

NII - BankingNII - Insurance

* 2017 pro forma figures for NII as the impact of ALM FX derivatives was ‘netted’ in NII as of 2018** From all ALM FX swap desks*** NIM is calculated excluding the dealing room and the net positive impact of ALM FX swaps & repos

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds). Note that part of the Irish portfolio for which a sales agreement has been signed, is still included in 3Q18*** Customer deposits, including debt certificates but excluding repos. Customer deposit volumes excluding debt certificates & repos stable q-o-q and +6% y-o-y

VOLUME TREND Total loans** o/w retail mortgages Customer deposits*** AuM Life reserves

Volume 147bn 61bn 194bn 214bn 29bn

Growth q-o-q* +1% +1% 0% 0% 0%

Growth y-o-y +5% +3% +3% 0% -1%

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Lower net fee and commission income

Amounts in bn EUR

AuM*214 213 215 217 213 214 214

2Q181Q17 2Q17 3Q184Q173Q17 1Q18

* Note that 2017 AuM figures were restated due to a roughly -2bn EUR adjustment inInstitutional Mandates

323 314 295 301 299 281 275

208 213 213 229 215 223 219

-69 -73 -74 -75 -64 -66 -70

1Q17 1Q182Q17 3Q17 4Q17 2Q18

450

3Q18

463 454 433 456 438 424

Distribution Asset management servicesBanking services

Amounts in m EUR Net fee and commission income (424m EUR)• Down by 3% q-o-q and by 2% y-o-y• Q-o-q decrease was the result chiefly of:

o lower securities-related fees (holiday season)o lower entry fees from mutual funds (holiday season led to

less gross inflows)o lower management fees from mutual funds and unit-linked

life insurance productso higher commissions paid on insurance sales, mainly non-lifeo lower fees from credit files & bank guaranteespartly offset by:o higher fees from payment services (holiday season)o higher network income

• Y-o-y decrease was mainly the result of:o lower entry and management fees from mutual funds &

unit-linked life insurance products,o lower fees from credit files & bank guaranteespartly offset by:o higher fees from payment serviceso higher securities-related feeso higher network income

Assets under management (214bn EUR)• Stabilised q-o-q and y-o-y as small net outflows were offset by

a positive price effect• The mutual fund business has seen net outflows, mainly in

investment advice

F&C (pro forma for 2017*)

* 2017 pro forma figures as the network income shifted from FIFV to net F&C as of 2018

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Insurance premium income (gross earned premiums) at 696m EUR• Non-life premium income (403m) increased by 7%

y-o-y• Life premium income (293m) down by 7% q-o-q

and up by 4% y-o-y

The non-life combined ratio at 9M18amounted to 88%. 3Q18 was impacted by 2large fire claims in Belgium, while technicalcharges were low in 2Q18. Remember that3Q17 benefited from a one-off release ofprovisions in Belgium (positive effect of 26mEUR). Excluding this one-off release in 3Q17,the combined ratio amounted to 86% at 9M17

Insurance premium income up y-o-y and excellent combined ratio

COMBINED RATIO (NON-LIFE)

PREMIUM INCOME (GROSS EARNED PREMIUMS)

1Q 1H 9M

84%79%

FY

90% 88% 83% 88% 88%

2017 2018

360 369 378 384 378 392 403

312 267 282410 336 315 293

1Q17 3Q17

714

2Q17

636

4Q17 2Q181Q18 3Q18

672 660

794707 696

Life premium income Non-Life premium income

Amounts in m EUR

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Non-life sales up y-o-y, life sales down y-o-y

Sales of non-life insurance products• Up by 8% y-o-y thanks to a good commercial

performance in all major product lines in our coremarkets and tariff increases

Sales of life insurance products• Decreased by 10% q-o-q and by 5% y-o-y• The q-o-q decrease was primarily due to lower sales of

guaranteed interest products in Belgium• The y-o-y decrease was driven entirely by lower sales of

unit-linked products in Belgium• Sales of unit-linked products accounted for 40% of total

life insurance sales

LIFE SALES

NON-LIFE SALES (GROSS WRITTEN PREMIUM)

207 193 187270 219 165 153

267 222 218

318279

261 230

1Q17 2Q17 2Q184Q173Q17 1Q18 3Q18

474 498415 405

588

426383

Guaranteed interest products Unit-linked products

468

358 349 342

492

382 378

4Q173Q171Q17 2Q17 3Q182Q181Q18

Amounts in m EUR

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Higher FV gains and other net income

The higher q-o-q figures for net gains fromfinancial instruments at fair value wereattributable mainly to:• a positive change in ALM derivatives• a positive change in market, credit and funding value

adjustments (mainly as a result of changes in theunderlying market value of the derivatives portfolioand decreased credit spreads)

partly offset by:• lower net result on equity instruments (insurance)• lower dealing room income, mainly in Belgium and

the Czech Republic

Other net income amounted to 56m EUR, moreor less in line with the normal run rate of around50m EUR. Note that 2Q18 was negativelyimpacted by the settlement of a legacy legal filein the Group Centre (-38m EUR), while 3Q17was negatively impacted by an additionalprovision of 54m EUR related to an industrywide review of the tracker rate mortgageproducts originated in Ireland before 2009

FV GAINS (pro forma for 2017*)

Amounts in m EUR

19 21 19 33

73

11 735

11

110

86

71 94 73 66

96

1-14

1Q17 3Q172Q17

1712

4Q17

4

1Q18 2Q18

2

3Q18

130

180

94118

54 79

77

47

4

-14

71

23

56

1Q17 2Q17 4Q173Q17 1Q18 3Q182Q18

OTHER NET INCOME

Net result on equity instruments (overlay insurance)M2M ALM derivativesOther FV gains

* 2017 pro forma figures as:1) the impact of the FX derivatives was ‘netted’ in NII as of 2018 2) the shift from realised gains on AFS shares and impairments on AFS shares to FIFV

due to IFRS 9 (overlay approach for insurance)

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Operating expenses up, partly due to one-offs Cost/income ratio (banking) adjusted for specific

items* at 58% in 3Q18 and 57% YTD• Operating expenses excluding bank tax went up by 1%

q-o-q primarily as a result of:o higher staff expenses (mainly due to wage

inflation), except for Belgiumo higher ICT and marketing expenseso 14m EUR one-off costs:o 6m EUR expenses for early retirement in Belgiumo 5m EUR restructuring charges in CZo 3m EUR costs related to the sale of part of the

legacy loan portfolio in Irelandpartly offset by:o lower facilities expenses

• Operating expenses without bank tax increased by 7%y-o-y in 3Q18

• Excluding the consolidation impact of UBB/Interlease,bank tax, FX effect and one-off costs, operatingexpenses in 9M18 rose by roughly 3% y-o-y

• Pursuant to IFRIC 21, certain levies (such ascontributions to the European Single Resolution Fund)have to be recognised in advance, and this adverselyimpacted the results for 1Q18. The YTD increase canmainly be explained by the consolidation of UBB

• Total bank taxes (including ESRF contribution) areexpected to increase from 439m EUR in FY17 to 462mEUR in FY18

OPERATING EXPENSES

868 891 896 980 920 942 956

361 371

1Q183Q171Q17

19

1,02141

2Q17

18914

4Q17

24

2Q18

26

3Q18

1,229

910

1,291

966 981

Bank tax Operating expenses

• See glossary (slide 79) for the exact definition** The C/I ratio adjusted for specific items of 57% in 9M18 amounts to roughly 50% excluding these bank taxesAmounts in m EUR

TOTAL Upfront Spread out over the year

3Q18 1Q18 2Q18 3Q18 1Q18 2Q18 3Q18 4Q18e

BE BU 0 273 -4 0 0 0 0 0

CZ BU 0 29 1 0 0 0 0 0

Hungary 21 26 0 0 19 22 21 22

Slovakia 4 3 0 0 4 4 4 4

Bulgaria 0 14 1 0 0 0 0 0

Ireland 1 3 0 0 1 0 1 14

GC 0 0 0 0 0 0 0 0

TOTAL 26 347 -2 0 24 26 26 40

EXPECTED BANK TAX SPREAD IN 2018

Bank taxes of 421m EUR YTD. On a pro rata basis, bank taxes represented 10.9% of 9M18 opex at KBC Group**

27

Net impairment releases, excellent credit cost ratio and improved impaired loans ratio

Very low asset impairments• This was attributable mainly to:

o net loan loss impairment releases in Ireland of 15m EUR(compared with 39m in 2Q18)

o also small net loan loss impairment reversals in Slovakia,Hungary, Bulgaria and Group Centre

partly offset by:o loan loss impairments of only 3m EUR in Belgiumo loan loss impairments of 12m EUR in the Czech Republic due

to 1 large corporate file

• Impairment of 6m on ‘other’, of which 4m EUR in the CzechRepublic mostly resulting from a review of residual values offinancial car leases under short-term contracts

The credit cost ratio amounted to -0.07% in 9M18 due tolow gross impairments and several releases

The impaired loans ratio stabilised at 5.5%*, 3.2% ofwhich over 90 days past due

ASSET IMPAIRMENT

21 29 20 6

10

-27 -21-87 1

-2

4Q171Q17

5

31

-76

2Q17 3Q17

6

-63

1Q18 2Q18 3Q18

8

-71

2

-56

-1

IMPAIRED LOANS RATIO

2Q18

3.4%

1Q17

3.7%3.9%3.6%

6.0%

2Q17 3Q17

3.2%

4Q17

3.5%

1Q18

3.2%

3Q18

5.5%

6.8% 6.9% 6.6%5.9% 5.5%

CREDIT COST RATIO

0.23%

FY14

0.09%

FY15 FY16 FY17-0.07%

0.42%

9M18

-0.06%

Impaired loans ratio 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

* Excluding the part of the Irish portfolio for which a sales agreement hasbeen signed, the impaired loans ratio would amount to 4.5% in 3Q18

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NET PROFIT – BELGIUM NET PROFIT – CZECH REPUBLIC

993

414 348439

3351,432

2014

1,516

20162015 2017

1,564

9M18

1,575

1,102 1,216 1,240

1,089

9M18 ROAC: 22%

Amounts in m EUR

408 423 465 534

484121 119

131168

528

2015

542

9M182014 2016

596

2017

702

9M18 ROAC: 38%

NET PROFIT – INTERNATIONAL MARKETS

184289

370

440

-175

61

13974

2016

-7

20172014-182

2015 9M18

245

428 444

9M18 ROAC: 27%

Overview of contribution of business units to 9M18 result

4Q 9M 4Q 9M

4Q 9M

NET PROFIT – KBC GROUP

473

863 685462

1,948

20152014 2016

2,113

2017 9M18

2,5752,4272,639

1,762

1,2891,776 1,742

9M18 ROAC: 24%

9M4Q

29

Contents

3


Financial performance2

Balance sheet


5 MREL strategy

Appendices

6 Looking forward

30

Y-O-Y ORGANIC* VOLUME GROWTH

4%

BE

* Volume growth excluding FX effects and divestments/acquisitions** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos**** Retail mortgages in Bulgaria: new business (written from 1 Jan 2014) +8% y-o-y, while legacy -24% y-o-y***** Retail mortgages in Ireland: new business (written from 1 Jan 2014) +35% y-o-y, while legacy -7% y-o-y

Loans** Retail mortgages

2%

Deposits***

6%

2%

Deposits***Loans** Retail mortgages

8%8%

4%

Deposits***Loans**

4%

Retail mortgages****

3%

0%

11%12%


Deposits***

8%

Deposits***

10%


4%5%

CR

1%

Loans**

-1%

Retail mortgages*****

Deposits***-5%

5%

Retail mortgages

Loans** Deposits***

3% 3%

Balance sheet:Loans and deposits continue to grow in most core countries

31

Balance sheet KBC Group consolidated at 30 September 2018

78

61

146

145

Total assets (EUR 305bn)

Trading assets

Loan book (loans and advances to customers)

Other (incl. interbank loans, reverse repos, property & equipment etc...)

Insurance investment contracts

Investment portfolio (equity and debt securties)

54

193419

160

6 13

Total liabilities and equity (EUR 305bn)

Deposits from customers

Trading liabilities

Other (incl. interbank deposits)

Other MREL instruments and debt certificates

Equity (including AT1)

Technical provisions, before reinsurance NL and L

Liabilities under insurance investment contracts

Credit qualityCapital adequacy &liquidity position

32

Sectorial breakdown of outstanding loan portfolio(167bn EUR*) of KBC Bank Consolidated

11%

7%

15%

7%

7%4%4%

3%

40%

AutomotiveFinance & insurance

Real estate

Services

Distribution

Authorities Building & construction

Rest

Agriculture, farming, fishing

2%

Private Persons

Electricity

1.6%

1.5%

1.6%

ShippingFood producers

5.2%

1.2%

Other sectorsMetals

Chemicals

0.7%

1.1%

0.8%

Machinery & heavy equipment

1.0%

Hotels, bars & restaurantsOil, gas & other fuels

* It includes all payment credit, guarantee credit (except for confirmations of letters of credit and similar export/import related commercial credit), standby credit and credit derivatives, granted by KBC to private persons, companies, governments and banks. Bonds held in the investment portfolio are included if they are corporate or bank issued, hence government bonds and trading book exposure are not included* Outstanding amount includes all on-balance sheet commitments and off-balance sheet guarantees

33

Investment portfolio (as per 30/09/2018)

72%

6%

4%

7%

4%2% 4%

Covered bonds

Financial bonds

Sovereign bonds

Other public bonds

Other

1%Asset Backed securties

EquitiesNon-Financial bonds

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

INVESTMENT PORTFOLIO (Total EUR 61bn) SOVEREIGN BOND PORTFOLIO

(Carrying value1 EUR 47.2bn) (Notional value EUR 44.6bn)

1. Carrying value is the amount at which an asset [or liability] is recognised: for those not valued at fair value this is after deducting any accumulated depreciation (amortisation) and accumulated impairment losses thereon, while carrying amount is equal to fair value when recognised at fair value

32%

13%

3%4%6%

4%

13%

9%

6%

Italy

Belgium

Hungary

Czech Rep.Bulgaria**

PolandSlovakia

2%

France

Other

SpainGermany **

Portugal *Austria *Netherlands * Ireland

34

Impaired loans ratios*, of which over 90 days past due

INTERNATIONAL MARKETS BU (including UBB)CZECH REPUBLIC BU

6.6%

3.5%

1Q18

3.2%

6.0%

2Q18 3Q184Q17

3.4%

2Q17

3.2%3.6%

1Q17

3.9% 3.7%

3Q17

6.8% 6.9%

5.9%5.5% 5.5%

Of which over 90 days past dueImpaired loans ratio *

1.6%

2.3%

1.5%

2Q18

1.4%

3Q181Q17

2.7%

1Q18

1.8% 1.7%

3Q172Q17

1.6% 1.6%

4Q17

2.6% 2.5% 2.4% 2.4%2.1%

1Q17 4Q17

13.4%

2Q17

11.3%

3Q18

11.2%

2Q18

11.5%

1Q18

22.4%

12.1%

3Q17

12.6%

24.2% 23.6%

19.7% 20.4% 19.5% 18.9%

12.8%

BELGIUM BU

1Q18 2Q18

1.2% 1.3%

3Q181Q17

2.8%

1.5%

2.4%

1.5% 1.4%

4Q172Q17

1.5%

3Q17

1.3%

3.0% 3.0%

2.4%

2.8%2.6%

KBC GROUP

* Impaired loans ratio: As of 1Q18, a switch has been made in the risk reporting figures from outstanding (PD10-12) to the new definition of gross carrying amount, i.e. including reserved and accrued interests. In addition, the transaction scope of the credit portfolio was extended and now additionally includes the following 4 elements: (1) bank exposure (money market placements, documentary credit, accounts), (2) KBC Commercial Finance debtor risk, (3) unauthorised overdrafts, and (4) reverse repo (excl. central bank exposure)

** Excluding the part of the Irish portfolio for which a sales agreement has been signed, the impaired loans ratio would amount to 4.5% in 3Q18

**

35

Cover ratios

INTERNATIONAL MARKETS BU (including UBB)CZECH REPUBLIC BU

BELGIUM BUKBC GROUP

• Impaired loans cover ratio: As of 1Q18 a switch has been made in the risk reporting figures from outstanding to the new definition of gross carrying amount, i.e. including reserved and accrued interests

2Q171Q17

44.0%

3Q17

48.0%47.8%

4Q17 1Q18

46.6%

2Q18 3Q18

63.7%

47.3%

64.2% 64.5%

47.5%

64.1%68.1% 67.7%

47.2%

66.8%

Impaired loans cover ratio *

Cover ratio for loans with over 90 days past due

55.1%

1Q17

48.1%54.7%

2Q17

66.9%

4Q173Q17 1Q18

53.0%

2Q18 3Q18

69.4%

56.7%

71.8% 69.0%

57.7%

68.9%

52.5%

66.8% 66.9%

2Q17 3Q182Q184Q17

67.5%

3Q171Q17 1Q18

47.9% 46.4%

67.6%

48.4%

69.7%

44.4%

68.6%

44.2%

67.6%

45.9%

66.4%

44.4%

63.4%

3Q181Q17 2Q17

43.5%

3Q17 4Q17 1Q18 2Q18

58.8%

45.9%

58.9%

45.4%

60.8%

40.9%

60.2%

46.9%

64.8%

46.0%

66.0% 65.5%

45.7%

36

Loan loss experience at KBC

9M18CREDIT COST

RATIO

FY17CREDIT COST

RATIO

FY16CREDIT COST

RATIO

FY15CREDIT COST

RATIO

FY14CREDIT COST

RATIO

AVERAGE ‘99 –’17

Belgium 0.06% 0.09% 0.12% 0.19% 0.23% n/a

Czech Republic 0.04% 0.02% 0.11% 0.18% 0.18% n/a

International Markets -0.56% -0.74% -0.16% 0.32% 1.06% n/a

Group Centre -0.77% 0.40% 0.67% 0.54% 1.17% n/a

Total -0.07% -0.06% 0.09% 0.23% 0.42% 0.47%

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

37

Contents

4



Balance sheet3

Solvency and liquidity

5 MREL strategy

Appendices

6 Looking forward

38

Strong capital positionFully loaded Basel 3 CET1 ratio at KBC Group (Danish Compromise)

10.6% fully loaded regulatory minimum

1H17 FY171Q17 9M17 9M181Q18 1H18

15.7% 16.0%15.7% 15.9% 16.3% 15.9% 15.8%

The common equity ratio* increased from15.8% at the end of 1H18 to 16.0% at the endof 9M18 based on the Danish Compromise.This clearly exceeds the minimum capitalrequirements** set by the competentsupervisors of 9.875% phased-in for 2018 and10.6% fully loaded and our ‘Own CapitalTarget’ of 14.0%

* Note that 1 January 2018, there is no longer a difference betweenfully loaded and phased-in

** Excludes a pillar 2 guidance (P2G) of 1.0% CET1

14.0% ‘Own Capital Target’

Fully loaded Basel 3 total capital ratio (Danish Compromise)

15.8% CET1

1.5% AT12.3% T2

2.4% T2

15.9% CET1

2.3% T2

2.6% AT1

1Q18 total capital ratio

1H18 total capital ratio

19.7%20.8%

9M18 total capital ratio

20.9%

16.0%CET1

2.6% AT1

The fully loaded total capital ratio amountedto 20.9% at the end of 9M18

Total distributable items (under Belgian GAAP) KBC Group 5.8bn EUR at 9M 2018, of which:• available reserves: 949m• accumulated profits: 4 681m

39

Fully loaded Basel 3 leverage ratio and Solvency II ratio

5.0%4.8%

9M171Q17 1H17 FY17 1Q18 1H18 9M18

4.7% 4.7% 4.7%5.1% 5.2%

Fully loaded Basel 3 leverage ratio at KBC BankFully loaded Basel 3 leverage ratio at KBC Group

9M17 1Q181Q17 FY17 9M181H17 1H18

5.7% 5.7% 5.8% 6.1% 5.7% 6.0% 6.1%

Solvency II ratio

2Q18 9M18

Solvency II ratio* 219% 216%

The decrease (-3%-point) in the Solvency II ratiowas mainly the result of an increase in spreads andnet purchases in the equity portfolio

* On 19 April 2017, the NBB retroactively relaxed the strict cap on the loss-absorbing capacity of deferred taxes in the calculation of the required capital. Belgian insurancecompanies are now allowed to apply a higher adjustment for deferred taxes, in line with general European standards, if they pass the recoverability test. This is the case for KBC

40

Strong and growing customer funding base

KBC Bank continues to have a strong retail/mid-cap deposit base in its core markets – resulting in a stable funding mixwith a significant portion of the funding attracted from core customer segments & markets

Customer funding further increased in 9M18 (versus FY17). The elevated amount in short-term wholesale funding ismainly on the back of short-term arbitrage opportunities

69% 73% 75% 73% 73% 69% 70% 72%

8% 10% 7%9%9% 8% 9% 8% 8%

9% 9%7%8% 10% 8% 8% 8%

7% 7%9% 0% 2% 2% 2%8%

10% 12%6% 5%

-6% -6%

3%

3%

FY12

3%

FY11 FY13

4%

FY14 FY15

-1%

FY16 FY17 9M18

3%

2%3%

3%

Net unsecured interbank funding

Net secured funding

Total equity

Debt issues placed with institutional investors

Certificates of deposit

Funding from customers

73%

21%

7%0%

Debt issues in retail network

Retail and SME

Government and PSE

Mid-cap

72% customer

driven

129 555 131 914 132 862 133 766 139 560 143 690 155 774 163 513

FY11 FY12 FY13 FY14 FY15 FY16 FY17 9M18

Funding from customers (m EUR)

41

Short term unsecured funding KBC Bank vs liquid assets as of end June 2018 (bn EUR)

KBC maintains a solid liquidity position, given that:• Available liquid assets remained very high at more than

3 times the amount of the net short-term wholesalefunding

• Funding from non-wholesale markets is stable fundingfrom core-customer segments in core markets

* Graph is based on Note 18 of KBC’s quarterly report, except for the ‘available liquid assets’ and‘liquid assets coverage’, which are based on the KBC Group Treasury Management Report

* Net Stable Funding Ratio (NSFR) is based on KBC’s interpretation of the proposed CRRamendment

** Liquidity Coverage Ratio (LCR) is based on the Delegated Act requirements. From EOY2017onwards, KBC discloses 12 months average LCR in accordance to EBA guidelines on LCRdisclosure

(*)

NSFR at 134% and LCR at 138% by the end of 9M18• Both ratios were well above the regulatory requirement of

at least 100%

Liquidity ratios remain very solid

Ratios FY17 9M18 Regulatory requirement

NSFR* 134% 134% ≥100%

LCR** 139% 138% ≥100%

11,56

22,7018,71

15,1918,01

56,23

65,39

57,79 58,83 56,85

486%

288%309%

387%

316%

3Q17 4Q17 1Q18 2Q18 3Q18Net Short Term Funding Available Liquid Assets Liquid Assets Coverage

end of September 2018*

42

Upcoming mid-term funding maturities

17%

3%

10%

10%

32%

28%

0.0%

1.0%

1.8%

1.4%

1.7%

0.7%

0.2%0.4%

0.2%0.3%

0

1000

2000

3000

4000

5000

6000

2018 2019 2020 2021 2022 2023 2024 2025 2026 ≥ 2027

Mill

ions

EUR

Breakdown Funding Maturity Buckets

Senior Unsecured - Holdco Senior Unsecured - Opco Subordinated T1 Subordinated T2 Covered Bond TLTRO

Total outstanding = 23.6 bn EUR

(Including % of KBC Group’s balance sheet) CoCo has been called (on 25 January 2018)

KBC Bank placed covered bonds of 750m EUR with 8-yearmaturity and 250m EUR with 20-year maturity in March 2018

KBC Group issued a perpetual non-call 7.5-year additional Tier-1instrument of 1bn EUR in April 2018

KBC Group successfully issued its inaugural green seniorbenchmark issue of 500m EUR with a 5-year maturity in June2018

There were no new issuances during 3Q18

KBC Bank has 6 solid sources of long-term funding:• Retail term deposits• Retail EMTN• Public benchmark transactions• Covered bonds• Structured notes and covered bonds using the private

placement format• Senior unsecured, T1 and T2 capital instruments issued at KBC

Group level and down-streamed to KBC Bank

43

Latest credit ratings

S&PMoody’s Fitch

Gro

upBa

nkIn

sura

nce

Senior UnsecuredTier IIAdditional Tier IShort-term P-2 A-2 F1Outlook Positive Stable Stable

Baa1 A- A- BBB A-- BB+ BB+

Senior Unsecured

Short-term P-1 A-1 F1Outlook Positive Stable Stable

A1 A+ A+Tier II

Covered Bonds AAA - AAA

-

Financial Strength RatingIssuer Credit Rating

- A -- A -

BBB

Outlook - Stable -

-

Latest updates:• 23 Nov 2018: Fitch rating upgrade of KBC Bank • 19 Nov 2018: Moody’s revised KBC Group, KBC Bank and KBC Bank Ireland outlook to positive and affirmed ratings• 30 July 2018: S&P rating upgrade of KBC Group, KBC Bank, Insurance and CSOB CR.

44

-40

10

60

110

160

210

-20

0

20

40

60

80

100

120

140

Credit spreads trends

0.5Y Senior Debt Opco 5Y Covered Bond Interpolated 5Y Senior Debt Holdco Interpolated 7NC2 Subordinated Tier 2

Credit spreads trends

1 7NC2 Subordinated Tier 2 spread is depicted based on the right hand axis.

1

45

KBC IS A FREQUENT ISSUER WITH AN OUTSTANDING AMOUNT OF 7.56 BN EUR• KBC’s 10bn EUR covered bond programme is rated Aaa/AAA (Moody’s/Fitch)• CRD and UCITS compliant / 10% risk-weighted• All issues performed well in the secondary market

KBC’S COVERED BONDS ARE BACKED BY STRONG LEGISLATION AND SUPERIOR COLLATERAL• Cover pool: Belgian residential mortgage loans• Strong Belgian legislation – inspired by German Pfandbriefen law• Direct covered bond issuance from a bank’s balance sheet• Dual recourse, including recourse to a special estate with cover assets included in a register• Requires license from the National Bank of Belgium (NBB)• The special estate is not affected by a bank insolvency. In that case, the NBB can appoint a cover pool administrator to manage

the special estate in issuer ; both monitor the pool on a ongoing basis• The value of one asset category must be at least 85% of the nominal amount of covered bonds• The value of the cover assets must at least be 105% of the covered bonds (value of mortgage loans is limited to 80% LTV)• Maximum 8% of a bank’s assets can be used for the issuance of covered bonds

THE COVERED BOND PROGRAMME IS CONSIDERED AS AN IMPORTANT FUNDING TOOL FOR THE TREASURY DEPARTMENT• KBC’s intentions are to be a frequent benchmark issuer if markets and funding plan permit

Summary covered bond programme (1/2) (details, see Annex 3)

46

Summary covered bond programme (2/2) (details, see Annex 3)

COVER POOL: BELGIAN RESIDENTIAL MORTGAGE LOANS• Exclusively, this is selected as main asset category• Value (including collections) at least 105% of the

outstanding covered bonds• Branch originated prime residential mortgages

predominantly out of Flanders• Selected cover asset have low average LTV (60.57%) and

high seasoning (54 months)

KBC HAS A DISCIPLINED ORIGINATION POLICY• 2009 to 2017 residential mortgage loan losses below 4 bp• Arrears in Belgium approx. stable over the past 10 years:

(i) Cultural aspects, stigma associated with arrears,importance attached to owning one’s property

(ii) High home ownership also implies that the change inhouse prices itself has limited impact on loanperformance

(iii) Well established credit bureau, surrounding legislationand positive property market

1,12

%1,

12%

1,11

%1,

08%

1,08

%1,

09%

1,09

%1,

09%

1,10

%1,

11%

1,09

%1,

08%

1,08

%1,

08%

1,06

%1,

06%

1,06

%1,

06%

1,12

%1,

12%

1,13

%1,

14%

1,12

%1,

11%

1,12

%1,

13%

1,14

%1,

15%

1,16

%1,

16%

1,16

%1,

17%

1,17

%1,

18%

1,17

%1,

17%

1,17

%1,

19%

1,20

%1,

20%

1,19

%1,

20%

1,20

%1,

20%

1,22

%1,

22%

1,19

%1,

18%

1,17

%1,

18%

1,16

%1,

17%

1,16

%1,

16%

1,17

%1,

18%

1,17

%1,

16%

1,13

%1,

12%

1,11

%1,

11%

1,12

%1,

14%

1,11

%1,

11%

1,10

%1,

10%

1,10

%1,

09%

1,06

%1,

05%

1,04

%1,

03%

1,03

%1,

03%

1,02

%

0,38

%0,

39%

0,41

%0,

430%

0,44

0%

0,44

0%

0,44

%

0,50

%

0,53

%

0,52

%

0,56

%

0,54

%

0,48

%

0,41

%

0,43

%

0,39

%

0,39

%

0.01

2%

0.00

8%

0.00

6%

0,02

0%

0,01

3%

0,03

7%

0,02

0%

0,02

7%

0,01

7%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

dec/

09

dec/

10

dec/

11

feb/

12

apr/

12

jun/

12

aug/

12

okt/

12

dec/

12

feb/

13

apr/

13

jun/

13

aug/

13

okt/

13

dec/

13

feb/

14

apr/

14

jun/

14

aug/

14

okt/

14

dec/

14

feb/

15

apr/

15

jun/

15

aug/

15

okt/

15

dec/

15

feb/

16

apr/

16

jun/

16

aug/

16

okt/

16

dec/

16

feb/

17

apr/

17

jun/

17

aug/

17

okt/

17

dec/

17

Market loans in 3 months arrears KBC loans in 90days arrears KBC loan losses

47

Contents

5



Balance sheet3

Solvency and liquidity4

MREL strategy

Appendices

6 Looking forward

48

The resolution plan for KBC is based on a Single Point of Entry (SPE) approach at KBC Group level Bail-in is identified as the preferred resolution tool SRB’s current approach to MREL is defined in the ‘2017 MREL Policy’ published on 20 December 2017, which is based on the current legal

framework and hence might be revised in the context of the ongoing legislative process to review BRRD The MREL target for KBC is 25.9%, which is based on fully loaded capital requirements as at 31 December 2016 SRB requires KBC to achieve this target by 1 May 2019, using both HoldCo and eligible OpCo instruments

LAA Loss Absorbing AmountRCA ReCapitalisation AmountMCC Market Confidence ChargeCBR = Combined Buffer Requirement = 2.5% Conservation Buffer +1.5% O-SII buffer + 0.15% countercyclical buffer

LAA

RCA

MCC

8% P1

1.75% P2R

4.15% CBR

8% P1

1.75% P2R

2.9% (CBR – 1,25%)

@ 100% RWA

@ 95% RWA

= 25.9%

T2 2.3%

1.3% OpCo (T2 & senior >1y)

4.3%

3Q18

16.0%

2.6%

HoldCo senior

AT1

CET1

26.4%

= 25.1%

Gradually mature.To be replaced by

HoldCo senior

HoldCo approach

Consolidated approach

KBC well on track to comply with resolution requirements

ActualRegulatory requirement

49

Available MREL as a % of RWA (fully loaded)

23.7%

1.4%

23.5%22.8%

2.5%3.8%

2Q17

26.4%

1Q18

22.3%

1Q17

3.4%

25.1%

3Q17

2.3%

24.0%

4Q17

1.3%

25.1%

2Q18

24.8% 1.3%

3Q18

26.0% 26.3% 26.2% 26.3% 26.4%

OpCo MREL HoldCo MREL

50

KBC has strong buffers cushioning Sr. debt at all levels (30 September 2018)

KBC GroupSenior4 020

Tier 22 182

Additional Tier 12 400

CET1 (fully loaded)15 018

KBC BankSenior531

Other liabilities47 593

Tier 21 682

Additional Tier 12 400

CET1 (fully loaded)12 199

383

KBC InsuranceTier 2500

Parent shareholders equity3 036

KBC Asset ManagementFully consolidated for solvency purposes

To large extent customer-related, protected as

much as possible

Senior issued by KBC Bank, which will be limited going

forward (for funding reasons)

Buffer for Sr. level 20.3bn EUR

Buffer for Sr. level 19.6 bn EUR

Legacy T2 issued by KBC Bank will disappear over time

nominal amounts in million EUR

Subordinated on loan by KBC Group4 020

51

Contents

6



Balance sheet3

Solvency and liquidity4

MREL strategy

Appendices

5

Looking forward

52

Looking forward

European economic conditions remain attractive, although we believe that the growth peakis behind us. Persistently decreasing unemployment rates, with even growing labourshortages in some European economies, combined with gradually rising wage inflation willcontinue to support private consumption. Moreover, also investments will remain animportant growth driver. The main elements that could impede European economicsentiment and growth remain the risk of further economic de-globalisation, including anescalation of trade conflicts, the Brexit and political turmoil in Italy

Economicoutlook

Group guidance

Business units

Solid returns for all Business Units Loan impairments for Ireland towards a release in 100m-150m EUR range for FY18 Impact of the reform of the Belgian corporate income tax regime: recurring positive P&L

impact as of 2018 onwards and one-off negative impact in 4Q17 will be fully recuperated inroughly 3 years’ time

B4 impact for KBC Group estimated at roughly 8bn EUR higher RWA on fully loaded basis atyear-end 2017, corresponding with 9% RWA inflation and -1.3% points impact on CET1 ratio

Next to the Belgium and Czech Republic Business Units, the International Markets BusinessUnit has become a strong net result contributor, thanks to: Ireland: re-positioning as a core country with a sustainable profit contribution Bulgaria: merger of CIBank into UBB. The new group UBB has become the largest

bank-insurance group in Bulgaria with a substantial increase in profit contribution Sustainable profit contribution of Hungary and Slovakia

53

Appendices

Overview of outstanding benchmarks

2 KBC Bank CDS levels

3

4

Solvency: details on capital5

Details on credit exposure of Ireland

6

Summary of KBC’s covered bond programme

Belgium: digital sales

1

54

Annex 1 - Outstanding benchmarksOverview till end of September 2018

Total: EUR 11,0 bn

Issuer Curr Amount issued Coupon Settlement Date Maturity Date ISIN YEAR

KBC Group EUR 750 000 000 1,000 26/04/2016 26/04/2021 BE6286238561 2021KBC Group EUR 1 250 000 000 0,750 1/03/2017 01/03/2022 BE0002272418 2022KBC Group EUR 750 000 000 FRN 24/05/2017 24/11/2022 BE0002281500 2022KBC Group EUR 500 000 000 0,875 27/06/2018 27/06/2023 BE0002602804 2023KBC Group EUR 750 000 000 0,750 18/10/2016 18/10/2023 BE0002266352 2023

KBC Bank N.V. EUR 750 000 000 1 25/02/2014 25/02/2019 BE0002462373 2019KBC Bank N.V. EUR 1 000 000 000 1,25 28/05/2013 28/05/2020 BE0002434091 2020KBC Bank N.V. EUR 1 000 000 000 0,125 28/04/2015 28/04/2021 BE0002489640 2021KBC Bank N.V. EUR 1 000 000 000 0,45 22/01/2015 22/01/2022 BE0002482579 2022KBC Bank N.V. EUR 1 250 000 000 0,375 1/03/2016 01/09/2022 BE0002498732 2022KBC Bank N.V. EUR 750 000 000 2 31/01/2013 31/01/2023 BE0002425974 2023KBC Bank N.V. EUR 750 000 000 0,75 8/03/2018 08/03/2026 BE0002583616 2026KBC Bank N.V. EUR 500 000 000 0,75 24/10/2017 24/10/2027 BE0002500750 2027

Tranche Report

UNSECURED

COVERED

55

Issued 18 Sep 2017Issued

17 Apr 2018

Annex 1 - Outstanding benchmarksMain characteristics of subordinated debt issues

KBC Bank NVKBC Groep NV

AT1KBC Groep NV

AT1KBC Groep NV

Tier IIKBC Groep NV

Tier IIKBC Groep NV

Tier II

Amount issued GBP 525 000 000 EUR 1 400 000 000 EUR 1 000 000 000 EUR 750 000 000 EUR 750 000 000 EUR 500 000 000Tendered GBP 480 500 000

Net Amount GBP 44 500 000 EUR 1 400 000 000 EUR 1 000 000 000 EUR 750 000 000 EUR 750 000 000 EUR 500 000 000ISIN-code BE0119284710 BE0002463389 BE0002592708 BE0002479542 BE0002485606 BE0002290592Call date 19/12/2019 19/03/2019 24/10/2025 25/11/2019 11/03/2022 18/09/2024Initial coupon 6.202% 5.625% 4.250% 2.375% 1.875% 1.625%Coupon step-up / reset 3m gbp libor + 193bps $ MS 5Y + 4.759% € MS 5Y + 359.4bps € MS 5Y + 1.980% € MS 5Y + 1.50% € MS 5Y + 1.25%First (next) call date 19/12/2019 19/03/2019 24/10/2025 25/11/2019 11/03/2022 18/09/2024ACPM Yes - - - - -Dividend Stopper Yes - - - - -Conversion into PSC Yes - - - - -

TriggerSupervisory Event or

"concursus creditorum"

Trigger CET1 RATIO < 5.125%

Temporary write-down

Trigger CET1 RATIO < 5.125%

Temporary write-down

Regulatory + Tax Call Regulatory + Tax Call Regulatory + Tax Call

SUBORDINATED BOND ISSUES KBC

56

Annex 2 - KBC Bank CDS levels (in bp)

57

Direct covered bond issuance from a bank’s balancesheet

Dual recourse, including recourse to a special estatewith cover assets included in a register

The special estate is not affected by a bank’s insolvency

Requires licenses from the National Bank of Belgium(NBB)

Ongoing supervision by the NBB

The cover pool monitor verifies the register and theportfolio tests and reports to the NBB

The NBB can appoint a cover pool administrator tomanage the special estate

National Bank of Belgium

Cover Pool Administrator

Not

e Ho

lder

s

Covered bonds

ProceedsIssuer

Cover PoolMonitor

Special Estate with Cover Assets in a Register

Representativeof the Noteholders

Annex 3 – KBC’s covered bond programmeBelgian legal framework

58

The value of one asset category must be at least 85% of the nominal amount ofcovered bonds• KBC Bank selects residential mortgage loans and commits that their value (including

collections) will be at least 105%

Collateral type

Over-collateralisation

Test

Cover Asset Coverage Test

Liquidity Test

Cap on Issuance

1

2

3

4

5

The value of the cover assets must at least be 105% of the covered bonds• The value of residential mortgage loans:

1) is limited to 80% LTV

2) must be fully covered by a mortgage inscription (min 60%) plus a mortgage mandate (max 40%)

3) 30 day overdue loans get a 50% haircut and 90 days (or defaulted) get zero value

The sum of interest, principal and other revenues of the cover assets must atleast be the interest, principal and costs relating to the covered bonds• Interest rates are stressed by plus and minus 2% for this test

Cover assets must generate sufficient liquidity or include enough liquid assets topay all unconditional payments on the covered bonds falling due the next 6months Interest rates are stressed by plus and minus 2% for this test

Maximum 8% of a bank’s assets can be used for the issuance of covered bonds

Annex 3 – KBC’s covered bond programmeStrong legal protection mechanisms

59

Annex 3 – KBC’s covered bond programme KBC Bank NV Residential mortgage covered bond programme

Issuer: • KBC Bank NV

Main asset category: • min 105% of covered bond outstanding is covered by residential mortgage loans and collections thereon

Programme size: • Up to 10bn EUR (only)

Interest rate: • Fixed rate, floating rate or zero coupon

Maturity: • Soft bullet: payment of the principal amount may be deferred past the final maturity

date until the extended final maturity date if the issuer fails to pay• Extension period is 12 months for all series

Events of default:• Failure to pay any amount of principal on the extended final maturity date• A default in the payment of an amount of interest on any interest payment date

Rating agencies: • Moody’s Aaa / Fitch AAA

Moody’s Fitch

Over-collateralisation 10% 14.5%

TPI Cap Probable D-cap 4 (moderate risk)

60

Annex 3 – KBC’s covered bond programmeBenchmark issuance KBC covered bonds

Since establishment of the covered bond programme KBC has issued eight benchmark issuances:

SPREAD EVOLUTION KBC COVERED BONDS (SPREAD IN BP VERSUS 6 MONTH MID SWAP)

Sour

ce B

loom

berg

Mid

ASW

leve

ls

61

Annex 3 – KBC’s covered bond programmeKey cover pool characteristics (1/3)

Investor reports, final terms and prospectus are available on www.kbc.com/covered_bonds

Portfolio data as of : 30 September 2018

Total Outstanding Principal Balance 10 266 025 846

Total value of the assets for the over-collateralisation test 9 596 048 409

No. of Loans 136 406

Average Current Loan Balance per Borrower 107 274

Maximum Loan Balance 1 000 000

Minimum Loan Balance 1 000

Number of Borrowers 95 699

Longest Maturity 359 month

Shortest Maturity 1 month

Weighted Average Seasoning 59.6 months

Weighted Average Remaining Maturity 176 months

Weighted Average Current Interest Rate 2.13%

Weighted Average Current LTV 60.57%

No. of Loans in Arrears (+30days) 255

Direct Debit Paying 97.96%

62


REPAYMENT TYPE (LINEAR VS. ANNUITY) GEOGRAPHICAL ALLOCATION

LOAN PURPOSE INTEREST RATE TYPE (FIXED PERIODS)

Linear3%

Annuity97%

Purchase47%Remortgage

42%

Construction11%

Brussels Hoofdstedelijk gewest5% Waals Brabant

1%

Vlaams Brabant

18%

Antwerpen29%

Limburg13%

Luik1%

Namen0%

Henegouwen1%

Luxemburg0%

West-Vlaanderen

14%

Oost-Vlaanderen

18%

No review62%

1 y / 1 y12%

3 y / 3 y16%

5 y / 5 y…

10 y / 5 y2%

15 y / 5 y0%

20 y / 5 y0%

63


FINAL MATURITY DATE SEASONING

INTEREST RATECURRENT LTV

0,00

10,00

20,00

30,00

40,00

50,00

60,00

2013 - 2017 2018 - 2022 2023 - 2027 2028 - 2032 > 2032

Weighted Average Remaining Maturity:

176 months

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

0 - 12 13 - 2425 - 3637 - 4849 - 6061 - 7273 - 8485 - 9697 -108 109 -

Weighted Average Seasoning:

55.7 months

0,0010,0020,0030,0040,0050,0060,0070,00

< 2,

5

2.5

< to

<=

3.0

3.0

< to

<=

3.5

3.5

< to

<=

4.0

4.0

< to

<=

4.5

4.5

< to

<=

5.0

5.0

< to

<=

5.5

5.5

< to

<=

6.0

6.0

< to

<=

6.5

6.5

< to

<=

7.0

> 7

.0Weighted

Average Current Interest Rate:

2.13%

0,002,004,006,008,00

10,0012,0014,0016,0018,00

<= 1

0%

10%

< to

<=

20%

20%

< to

<=

30%

30%

< to

<=

40%

40%

< to

<=

50%

50%

< to

<=

60%

60%

< to

<=

70%

70%

< to

<=

80%

80%

< to

<=

90%

90%

< to

<=

100%

100%

< to

<=

110%

110%

< to

<=

120%

120%

< to

<=

130%

130%

< to

<=

140%

140%

< to

<=1

50%

150%

<

Weighted Average Current LTV:

60.57%

64

Annex 3: Belgian real estate marketRoughly stabilization in prices since 2011, with again an acceleration from 2016 onwards

House prices Belgium (*)

Source: FOD Economie

(*) Corrected for price changes resulting from changes in the quality and location of the real estate sold

Source: NBB.Stat; ECB

-4

-2

0

2

4

6

8

10

12

14

16

95

100

105

110

115

120

Index (Q1 2008 = 100, lhs)Year-on-year change (in %, rhs)

Debt position Belgian households (outstanding amounts, in % of GDP)

0%

10%

20%

30%

40%

50%

60%

70%

80%Belgium - Other debt (consumer loans)Belgium - Mortgage debtEuro Area (total debt)

65

-0,5

0,5

1,5

2,5

3,5

4,5

5,5

Belgium

Germany

0

100

200

300

400

500

600

700

800BelgiumFranceNetherlandsItalySpainIreland

Annex 3 - Interest rates still historically low

10-year government bond yields(in %)

Spread Belgium-Germany

Interest rate spreads Euro Area(10-year rate versus Germany, in basis points)

66

Annex 4 - Details on credit exposure of IrelandImpaired loans ratio further improved

OUT-STANDING

IMPAIRED LOANS

IMPAIRED LOANS

IMPAIRED LOANS

€ € PD 10-12 PD 10-12 COVERAGE

Owner occupied mortgages 9.1bn 2.1bn 23% 0.6bn 28%

Buy to let mortgages 2.1bn 1.4bn 68% 0.7bn 50%

SME /corporate 0.5bn 0.3bn 63% 0.2bn 61%

Real estate

- Investment 0.5bn 0.4bn 74% 0.2bn 61%

- Development 0.1bn 0.1bn 100% 0.1bn 94%

Total 12.3bn 4.3bn 35% 1.8bn 41%

PROVISIONS PD 10-12 €

LOAN PORTFOLIO Recent indicators suggest positive momentum in the Irish

economy remains strong. We now expect GDP growth will bearound 7% in 2018

The sustained strength of jobs growth continues to applydownward pressure on unemployment and has also prompted apick-up in net inward migration

Robust improvements in Irish economic conditions continue toboost the demand for housing but with supply improving, therehas been a modest easing in the pace of residential propertyprice inflation of late

Impaired loans have reduced by 0.1bn EUR (-2% q-o-q) withimpaired loan ratio at 35.0% at 3Q18. On a pro-forma basisadjusting for the legacy portfolio sale announced as part of2Q18 results, the impaired loan ratio is 25.0%

Net loan loss provision release of 15m EUR in 3Q18 drivenmainly by strong CSO House Price Index growth. This compareswith a 39m EUR release in 2Q18

Looking forward, we are maintaining our impairment guidancefor Ireland, namely a net release in a range of 100m-150m EURfor FY18

67

Annex 4 - Details on credit exposure of IrelandPortfolio analysis

3Q18 Retail Portfolio

PD Legacy New RetailImpairment Provisions

Cover %

PD 1-8 4,219 2,839 15 0.2%

Of which non Forborne 4,203 2,839

Of which Forborne 16 0

PD 9 620 10 29 4.7%

Of which non Forborne 107 1

Of which Forborne 514 9

PD 10 1,826 4 263 14.4%

PD 11 881 3 327 37.0%

PD 12 842 0 708 84.1%

TOTAL PD1-12 8,388 2,857 1,343

PD 10-12 Impairment Provisions /(PD 10-12) 36.5%

Perf

orm

ing

Impa

ired

3Q18 Corporate Portfolio

PD Exposure Impairment Provisions

Cover %

PD 1-8 260 4 1.5%

PD 9 53 3 6.4%

PD 10 244 97 39.5%

PD 11 161 99 61.1%

PD 12 348 290 83.5%

TOTAL PD1-12 1,066 493

PD 10-12 Impairment Provisions /(PD 10-12) 64.4%

Impa

ired

Perf

.

- Forborne loans (in line with EBA Technical Standards) comprise loans on a live restructure or continuing to serve a probation period post-restructure/cure to Performing

Retail portfolio

The New Retail portfolio (all originations post 1 Jan 2014) comprises2.9bn EUR of the overall Retail portfolio and increased q-o-q by 0.2bnEUR. New Retail at 3Q18 represents 25% of total Retail portfolio (from19% at 3Q17)

Impaired portfolio decreased by roughly 56m EUR q-o-q mainly due toimproved portfolio performance (reduction of 0.7bn EUR y-o-y)

Coverage ratio for impaired loans has slightly improved to 36.5% for3Q18

Weighted average indexed LTV on the impaired portfolio has improvedsignificantly y-o-y and in 3Q18 decreased to 102% (from 107% at 3Q17)

On a pro-forma basis adjusting for the portfolio sale, legacy retailimpaired loans decreased by approximately 1.0bn EUR to 2.6bn EUR

Corporate loan portfolio

Impaired portfolio has reduced by roughly 29m EUR q-o-q. Reductiondriven mainly by continued deleverage of portfolio (reduction of0.4bn EUR y-o-y)

Coverage ratio for impaired loans has decreased to 64% for 3Q18(from 66.5% in 2Q18)

Overall exposure has dropped by approximately 0.5bn EUR y-o-y(-31% y-o-y)

On a pro-forma basis adjusting for the portfolio sale, corporateimpaired loans decreased by approximately 0.7bn EUR

68

Jan 2012 Dec 2012 2014-2020

92.9 1.0

2Q18 (B3 DC**) 3Q18 impact

94.0

3Q18 (B3 DC)

DELTA AT NUMERATOR LEVEL (BN EUR)

DELTA ON RWA (BN EUR)

* Includes the q-o-q delta in deferred tax assets on losses carried forward, remeasurement of defined benefit obligations, IRB provision shortfall, deduction re. financing providedto shareholders, deduction re. irrevocable payment commitments, intangible fixed assets, AT1 coupon, translation differences, etc.

** Includes the RWA equivalent for KBC Insurance based on DC, calculated as the historical book value of KBC Insurance multiplied by 370%

Fully loaded B3 commonequity ratio increased to 16.0%at end 3Q18 based on theDanish Compromise

This clearly exceeds theminimum capital requirementsset by the competentsupervisors of 10.6% fullyloaded

-0.3

B3 CET1 at end 2Q18 (DC) B3 CET1 at end 3Q18 (DC)

0.6

3Q18 net result (excl. KBC Ins. due to Danish Compr.)

Pro-rata accrual dividend

0.1

Other*

14.7

15.0

Annex 5 - Solvency details Fully loaded B3 CET1 based on the Danish Compromise (DC) from 2Q18 to 3Q18

69

Method Numerator Denominator B3 CET1 ratio

FICOD*, fully loaded 16,205 106,996 15.1%

DC**, fully loaded 15,018 93,980 16.0%

DM***, fully loaded 14,054 88,609 15.9%

* FICOD: Financial Conglomerate Directive** DC: Danish Compromise*** DM: Deduction Method

Annex 5 - Solvency detailsOverview of B3 CET1 ratios at KBC Group

70

Annex 5 - Solvency detailsImplementation of the BRRD in Belgium

1. The BRRD has been transposed to a large extent by the Act of 25 April 2014 on the legalstatus and supervision of credit institutions ("The Banking Act") which applies sinceMay-2015, with the exception of some major provisions, such as the bail-in tool. Someprovisions will be further implemented by a Royal Decree (“RD”):

• Bail-in mechanism and MREL requirement of the BRRD: RD was published in theBelgian Official Journal 29 December 2015 and entries into force as from 1 January2016. However, the resolution strategy and MREL target for KBC are assumptionsand have not been determined by the Resolution Authority

• Group dimension of the BRRD: transposition is currently under preparation

2. The competent authorities are

• Supervision authority (KBC Bank NV, KBC Group NV): ECB/NBB.

• Resolution authority (KBC Bank NV, KBC Group NV): Single Resolution Board asfrom 1 January 2016.

• Competent authority for conduct supervision of financial institutions andintermediaries (KBC Bank NV): FSMA.

3. The hierarchy of claims in Belgium is in line with the BRRD as provided for in art. 48BRRD and applies losses accordingly.

• Creditors are protected by the No Creditor Worse Off (“NCWO”) principle whichensures that creditors in resolution can’t be worse-off than in normal insolvencyproceedings (art 34(1) BRRD).

4. KBC plans on on-lending senior unsecured issued out of KBC Group NV as subordinatedinstruments at KBC Bank NV to ensure the on-loan would only take losses after Tier 2securities.

• Additionally KBC Bank NV’s funding needs in senior unsecured are expected to bemoderate going forward

CET1

AT1

Tier 2

Internal Sub Loan

Senior Unsecured

Hierarchy of Claims in Belgium

Structured Notes

Derivatives

Junior Deposits

Individual & SME Deposits

Covered Deposits

Loss

Abs

orpt

ion

in K

BC B

ank

71

Annex 5 - Solvency details What are the risks for HoldCo senior investors?

71

Shareholders equity

AT1

Tier 2

Senior Unsecured

Recapitalisation scenario, losses (originating in any or in all of the underlying entities*) are lower than the size of the capital instruments at theHoldCo level part or all of Senior debt issued by the HoldCo can be converted into shares to recapitalise the HoldCo up to a minimum level as decided by

the competent authorities. The investor then has a combination of shares and bonds of the HoldCo instead of only bonds and thus (co-)ownsthe underlying entities. The conversion factor would be determined by the competent authorities applying the NCWO principle.

Loss absorption scenario, losses (originating in any or in all of the underlying entities*) exceed the size of the capital instruments at the HoldColevel part or all of Senior issued by the HoldCo can be bailed-in to absorb losses. The NCWO principle implies that losses are only up-streamed to

the HoldCo upto the amount of the investment of the HoldCo in the entity(ies) generating the losses. Hence, the investor in the HoldCoSenior will lose (up to) its investment to the extent that the amount of outstanding HoldCo senior debt exceeds the value of the remainingunderlying entities of the HoldCo

Public Issuance

1 2

1

2

BRRD capitalinstruments

HoldCo

In all scenarios surpassing the Point of NonViability, the investors are protected by theNo Creditor Worse Off principle (“NCWO”),which stipulates that no instrument will beworse off in resolution than in normalinsolvency proceedings

* In KBC Group’s case this would be KBC Bank and/or KBC Insurance and/or KBC Asset Management

size of loss

72

0

500

1 000

1 500

2 000

2 500

3 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

Travel insurance

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

Consumer loans

0

2 000

4 000

6 000

8 000

10 000

12 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

Pension savings

0

10 000

20 000

30 000

40 000

50 000

60 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

Current accounts

# of files# of files

# of files# of files

Annex 6 – Digital sales BU BelgiumDigital sales are increasing

73

Digital sales @ KBC Live increases, strong performance in non-life

Digital signing after contact with the branches or KBC Live

30%

40%

50%

60%

70%

80%

90%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

Digital signing of commercial loans

Digital signing of debt protect cover life insurance

Digital signing mortgage loans

Digital signing housing insurance

Digital signing car insurance

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

Jan

Feb

Mar Ap

r

May Jun Jul

Aug

Sep

Oct

Nov De

c

Jan

Feb

Mar Ap

r

May Jun Jul

Aug

Sep

KBC Live cumulative sales 2017-2018

Non life insurance Life insurance Housing loans

Consumer loans Investment plans

Annex 6 – Digital sales BU BelgiumOmnichannel is embraced by our customers

74

Glossary (1/2)

AQR Asset Quality Review

B3 Basel III

CBI Central Bank of Ireland

Combined ratio (non-life insurance) [technical insurance charges, including the internal cost of settling claims / earned premiums] + [operating expenses / written premiums] (after reinsurance in each case)

Common equity ratio [common equity tier-1 capital] / [total weighted risks]

Cost/income ratio (banking) [operating expenses of the banking activities of the group] / [total income of the banking activities of the group]

Cost/income ratio adjusted for specific items

The numerator and denominator are adjusted for (exceptional) items which distort the P&L during a particular period in order to provide a better insight into the underlying business trends. Adjustments include: • MtM ALM derivatives (fully excluded)• bank taxes (including contributions to European Single Resolution Fund) are included pro rata and hence spread over all quarters of the year instead of

being recognised for the most part upfront (as required by IFRIC21)• one-off items

Credit cost ratio (CCR) [net changes in individual and portfolio-based impairment for credit risks] / [average outstanding loan portfolio]. Note that, inter alia, government bonds are not included in this formula

EBA European Banking Authority

ESMA European Securities and Markets Authority

ESFR European Single Resolution Fund

FICOD Financial Conglomerates Directive

Impaired loans cover ratio [total specific impairments on the impaired loan portfolio (stage 3) ] / [part of the loan portfolio that is impaired (stage 3) ]

Impaired loans ratio [part of the loan portfolio that is impaired (stage 3)] / [total outstanding loan portfolio]

Leverage ratio[regulatory available tier-1 capital] / [total exposure measures]. The exposure measure is the total of non-risk-weighted on and off-balance sheet items, based on accounting data. The risk reducing effect of collateral, guarantees or netting is not taken into account, except for repos and derivatives. This ratio supplements the risk-based requirements (CAD) with a simple, non-risk-based backstop measure

Liquidity coverage ratio (LCR) [stock of high quality liquid assets] / [total net cash outflow over the next 30 calendar days].

Net interest margin (NIM) of the group [banking group net interest income excluding dealing room] / [banking group average interest-bearing assets excluding dealing room]

Net stable funding ratio (NSFR) [available amount of stable funding] / [required amount of stable funding]

75

Glossary (2/2)

MARS Mortgage Arrears Resolution Strategy

MREL Minimum requirement for own funds and eligible liabilities

PD Probability of default

Return on allocated capital (ROAC) for a particular business unit

[result after tax, including minority interests, of a business unit, adjusted for income on allocated capital instead of real capital] / [average capital allocated to the business unit]. The capital allocated to a business unit is based on risk-weighted assets for banking and risk-weighted asset equivalents for insurance

Return on equity [result after tax, attributable to equity holders of the parent] / [average parent shareholders’ equity, excluding the revaluation reserve for fair value through Other Comprehensive Income (OCI) assets]

TLAC Total loss-absorbing capacity

76

Contacts / Questions

Company website: www.kbc.com

http://www.kbc.com/

kbc group / bank debt presentation november 2018 · this presentation containsnon-ifrs information...

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