YOU BE YOUWE’LL BE YOUR BANK

KBC Bank Ireland plc is regulated by the Central Bank of Ireland.

Annual report 2015

2015 at KBC was the Year of the Customer - but then again every year at the Bank of You is about You, our customers. It was a year of strong growth driven by a customer focused approach which is helping deliver on our strategy of becoming Ireland’s retail bank of the future.

The Year in Review 04Chairman’s Statement 08Chief Executive’s Review 10Board of Directors 12Statement of Profit or Loss 16Statement of Financial Position 17Auditors’ Statement 18Corporate Governance 19Corporate Social Responsibility 20About KBC 22Company Information 24Management Team 25

Contents

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2015 was all about listening to our customers, getting the product design right, opening Hubs around the country and developing the technology our customers want to make banking a breeze.

A Product EvolutionWe began the year with a full suite of retail banking products but what next? This year we continued to listen to our customers and refine our products based on genuine customer feedback.

We focused on value, offering customers even further discounts with their KBC Current Account. Customers could benefit from discounts in personal loans, mortgages, credit cards and better rates on their savings – it was a KBC Bonanza!

But we did not build these products by ourselves. We constantly look to the market to make sure we are delivering on our product promises and we also got some help from our customers. For example, we asked students what they wanted from a bank and designed a student offer to appeal to their love of travel and adventure. We offered students a ‘fly or cash’ alternative when they opened a current account with a choice of €100 or two free return flights.

2015a year in review

We launched the “KBC Extra Account”. This featured a host of benefits for customers to choose from, including free banking.

In 2015, we were proud to be awarded the “Best Deposit Bank” by an expert panel for the IrishDeposits.ie and the Sunday Times annual survey on deposits in Ireland. Even more importantly for us, was that this award was voted for by consumers and the general public.

Meeting you out and about!We brought a new way of banking to even more towns and cities across the country. We ended 2015 with 15 Hubs in total. By the end of the year, we had Hubs across Dublin in Swords, Stillorgan, Dundrum, Greystones and College Green in addition to our existing Hubs in Grand Canal and Baggot Street. We opened new Hubs in Kilkenny, Waterford, Maynooth and Naas – joining our existing Hubs in Galway and Limerick. And not to forget Cork where our new Wilton Hub joined our existing Hub on Lapps Quay. It was a busy year!

While on the road to meet our new customers at our official openings, we brought some friendly faces like Brenda Donohue, Shane Horgan, Paddy Wallace, Austin Gleeson and Brian Cody to help us celebrate becoming part of our local communities.

We set out on a programme to help our customers understand how to get value in banking – we held insurance weeks, mortgage evenings and investment evenings in all of our Hubs.

Building on our popular Thursday late opening, we rolled out Saturday openings from 10am to 2pm

in all of our Hubs, making KBC the only bank in Ireland to offer Saturday opening across all its retail outlets.

Our teams are now helping more customers in more Hubs, and we were delighted to be awarded the Champion Sales Support Team Award at the Irish Sales Champion Awards in 2015.

Our unique mobile banks and pop ups continued their tour of the country in 2015, setting up in shopping centres, festivals and events like the National Ploughing Championships.

Innovate - A Year of FirstsIt was a year of firsts again as we became Ireland’s first card issuer to offer the MasterPass digital payment solution. The solution made it easier for our customers to securely pay for shopping online with any registered card, using any device, anywhere they saw the “pay with MasterPass logo”.

It saved customers time as previous payment and shipping information was securely saved for every purchase – nice and easy.

We were awarded best in class for product innovation by our partners in Temenos Technologies which recognised our excellence in collaboration and use of financial services software. This focus on technology meant that we could provide an improved banking service to you, our customer.

Innovation is alive in our Hubs too. Lapps Quay and Wilton in Cork were supporters of the ‘Cork Cashes Out’ pilot. This promoted the use of cards instead of cash to consumers and businesses in Cork City and was developed by the Banking & Payments Federation Ireland in collaboration with the Cork City business community.

We opened our Flagship Digital Hub on College Green which features the latest interactive technology for modern banking in the heart of Dublin City. The Hub is unique in that it features state-of-the-art design and interactive touchscreen technology including a ‘Discovery Zone’. Customers can enjoy instant access to KBC’s full suite of digital brochures, apps and online material.

KBC College Green

We are always looking for new ways to help our customers. At the beginning of the year our customers were using Live Web Chat on KBC.ie. This meant our customers could chat to us online from their PC, smartphone, or tablet whenever and wherever they needed help. We held a question and answer session on boards.ie to answer all customer questions about our new and improved KBC Mobile App.

In 2015 we continued to grow our customer care online. We grew our followers on Twitter, Facebook and Linkedin.

Kilkenny Hurling legend Brian Cody at our Kilkenny Hub opening.

Enjoying the tea and chat at one of our many Hub openings during 2015.

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Using Research and Customer Listening to drive changeWe completed a number of research programmes to ensure we were providing the information, service and products that customers wanted over 2015.

For example, through using research we could help our customers understand better what they needed from home insurance. As a result, we held insurance weeks across the country as our research showed that two in five 25-40 year olds don’t know the cost of home insurance, and almost a third don’t know what it covers. Our research also showed that Irish consumers are a sentimental bunch at heart who count old photographs among their most valuable possessions at home!

Customer research also told us that just one in three students were turning to their bank to discuss their finances, with a similar number saying they are nervous discussing it with someone at their bank. So in 2015 we once again sent our teams out on the road to colleges around Ireland to meet with students and help them with their financial planning.

More than just BankingIn 2015, for the fourth year running, we were recognised as having the best reputation of any retail bank in Ireland according to the annual RepTrak study. RepTrak ranks the largest organisations in Ireland including indigenous, multinational and semi-state bodies and rates how highly these organisations are held in esteem, how much they are admired and trusted and how the general public feels about them.

We understand we have an important role in giving back to the communities where we work. KBC’s Bright Ideas fund returned for a second year in 2015 to reward creative community ideas nationwide. The return of Bright Ideas followed an overwhelming response from community groups and volunteers to the first year of the initiative. Bright Ideas was welcomed for helping to shine a light on the importance of community projects and for providing much-needed financial support to encourage local initiatives to thrive. A total fund of €100,000 was awarded to local projects.

Bright Ideas Regional Winners, Marion Courtney, Cork Association of Autism & Grainne Dwyer, Ludgate with Sean Michael Collins, Lapp’s Quay Hub Manager.

Our approach locally is important to us so we were delighted our Naas Hub were acknowledged for their CSR contribution at the local Naas Chamber Awards.

At a national level, we launched our partnership with The Jack and Jill Children’s Foundation and teams from across KBC ended the year on a happy note as we made a significant donation of €70,000 to this very well deserving charity.

We were certified with the Business Working Responsibly Mark by Business in the Community Ireland. The Mark assesses best in class corporate social responsibility (CSR) and looks at leadership, policies, practices and performance. We continue to ensure that we are meeting the high standards set to deliver for our customers and our employees.

Wim Verbraeken, CEO KBC Bank Ireland receiving the Business Working Responsibly Mark.

And finally, we celebrated innovative Student talent as National Sponsors of the Student Media Awards. The ‘KBC Outstanding Achievement Award’ was launched to recognise Ireland’s most exceptional student media talent and reward the winner with a €1,000 prize.

It’s been a busy year at KBC. We will continue to listen to our customers, bring them more value and develop the right technology and service that makes us the Bank of You.

Aidan Power, Director of Customer, Brand & Marketing with the winner of the KBC Outstanding Achievement Awards at the Smedias

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Chairman’s statementAgainst a mixed backdrop of international economic and financial trends, the Irish economy recorded strong and broadly based growth in 2015. On-going recoveries in the UK and US coupled with favourable developments in competiveness underpinned positive momentum in Irish exports. However, the most significant aspect of Ireland’s economic performance was a marked improvement in domestic economic activity encouraged by increased employment and some recovery in household spending power. Reflecting these positive developments and sustained reductions in Irish government borrowing and debt metrics, sentiment in financial markets towards Ireland improved further.

KBC’s challenger brand grew in 2015 and received external recognition for its growing contribution to financial services in Ireland. KBC’s reputation ranked No.1 in retail banking and we achieved the prestigious Business Working Responsibly Mark which recognises our contribution to Society and the Sustainability agenda. Our staff continue to be recognised by customers for their service, dedication and commitment and I would like to thank each and every one for their role in creating a truly customer centric Bank.

During a strong year for the Bank, we rolled out our franchise to more customers and communities around Ireland. We welcomed over 74,000 new customer accounts to the Bank and brought KBC’s footprint to new areas of Ireland such as Kilkenny and Waterford whilst extending our reach in greater Dublin and Cork. Our digital offering was a focus for development and we improved the overall customer experience of KBC through these ever important distribution channels. Our product offering further enhanced its appeal with the launch of new rewards for customers through our KBC Extra Current Account, which has proven to be a great success so far

for both customers and the Bank. The features of our mortgage proposition continued to evolve and became even more competitive. Finally, our deposit growth was sustained.

Engagement with customers in difficulty has been a priority for the Bank for a number of years. We introduced new ways for customers to engage with us, thus ensuring that we are accessible for those that are finding times difficult and are challenged in meeting their mortgage repayments. We have made progress during the year in reducing our overall level of arrears with the majority of customers now on sustainable resolutions.

The financial performance of the Bank in 2015 was ahead of expectations. The Bank reported an operating profit of €119 million before tax and impairment costs and a profit of €75 million after tax and impairment costs for 2015 (FY 2014 loss of €91 million). Overall, total loan impairment costs of €47.8 million were reported for the Bank. KBC Group had a strong year as well and reported a net profit of €2,639 million for 2015 (2014: €1,762 million). The Group remain committed to Ireland in realising its strategy to becoming a full service retail bank.

I would like to extend my thanks to Mr. Wim Verbraeken and his management team who have led the organisation over the past year as it transforms itself into a relevant retail bank on the Irish landscape. I would like to acknowledge the services of Mr. Bart Guns and welcome Mr. Martin Jarolím to the Board of the Bank. I would also like to acknowledge the key role that all of our Non–Executive directors play in guiding the overall performance and strategic direction of the organisation. I look forward to 2016 and the further growth and strengthening of the KBC franchise here in Ireland.

Luc GijsensChairman March 2016

KBC’s challenger brand grew in 2015 and received external recognition for its growing contribution to financial services in Ireland. KBC’s reputation ranked No.1 in retail banking.

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As we look forward into 2016 we can see the evidence of recovery in the economy with consumer confidence and sentiment consistently on a positive trajectory.

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CHIEF EXECUTIVE’S REVIEWAs the recovery deepened and broadened, 2015 was a stronger year economically as Ireland recorded GDP growth of more than 7% in 2015, the fastest pace in fifteen years. The performance of export sectors has remained robust but the most notable aspect of this progress has been the upswing in domestic demand. With numbers at work increasing significantly and fiscal policy no longer dampening demand, consumer spending has picked up notably and construction activity has begun to increase. Unemployment has fallen below 9% for the first time in nearly seven years. These conditions also prompted a further drop in Government borrowing to less than 2%, which is the best performance since 2007. This has led to a further improvement in financial market sentiment towards Ireland which resulted in a further decline in Irish bond yields. Bank lending amplified, albeit more modestly than the broader economy while private sector deposits also increased. Overall the operating environment for KBC Bank Ireland plc (the ‘Bank’ or ‘KBC’) was much improved in 2015.

The Bank’s financial performance for the year was ahead of forecasts and it has been a strong year of growth. The Bank reported an operating profit of €119 million before tax and impairment costs and a profit of €75 million after tax and impairment costs for 2015 (FY 2014 loss of €91 million). Overall, total loan impairment costs of €47.8 million were reported for the Bank for 2015 (FY 2014: total loan impairment costs of €198.1 million). The Bank’s capital base has remained solid with a Tier 1 Capital Ratio of 13.3% as at 31 December 2015 (2014 - 12.7%).

Over 2015 the Bank opened 74,000 new customer accounts. Growth was particularly evident in the Bank’s mortgage business with enhanced offerings for new and existing customers introduced during the year, further strengthening the competitiveness of KBC’s mortgage proposition. New mortgage business grew to €672 million for the year with a resultant increase in market share to 14%. The Bank’s deposit volume also continued to grow, with deposits (Retail & Corporate) now at €5.1 billion.

The Bank launched a new Extra Current Account package, providing greater value for customers with discounts on home insurance, mortgages, credit cards and savings, as well as free day-to-day banking. KBC’s Current Account is now the primary driver of new customer acquisition for the Bank. Building on the launch of the SIVEK funds in 2015, the Bank added to its range of saving and investment products with the development of a Privileged Portfolio suite of investment funds.

We continued to invest in our channels, especially in our digital channels such as mobile and online to enhance the banking experience for customers. The launch of a new responsive website and a new mobile app resulted in a significant increase in digital customer applications. KBC expanded its physical network too, which now totals 15 Hubs, with the opening of new retail banking presence in key locations, including Wilton (Cork), Waterford, Naas, Kilkenny and Greystones and a flagship digital Hub on College Green Dublin.

Customer satisfaction and the quality of KBC’s financial offering and brand reputation were acknowledged externally during the year. The Bank was recognised for having the ‘best corporate reputation’ in Irish retail banking for the fourth consecutive year (RepTrak), Excellence in Mortgage Lending (PIBA Service Excellence Awards), Best Deposit Bank 2015 (Sunday Times/IrishDeposits.ie) and Best Sales Training Programme 2015 (Irish Sales Champion Awards). This evidence of external recognition is important as it acknowledges the excellent products, service and overall experience we are trying to create for customers.

For customers in financial difficulty we continued our efforts in 2015 towards resolving arrears in retail mortgages and the corporate/SME loan book. The Bank will continue to work with customers in mortgage arrears in the year ahead so as to achieve sustainable resolutions. Built on the progress of 2014, we gained significant momentum during 2015, with reductions in mortgage arrears more than doubling year on year. We announced our participation in the newly launched Stepchange Debt Charity Ireland initiative and continued to engage with customers through other established independent third parties such as the Money Advice and Budgeting Service (MABS) and the Irish Mortgage Holders Organisation. Through a wide range of engagement channels we proactively engage daily with customers who are experiencing financial difficulty.

2015 saw an increased focus by the Bank on the Sustainability and CSR agenda. The KBC Brighter Futures Programme was launched and partnering with the Jack and Jill Foundation, our staff raised over €70,000 for the charity and its families. The year saw a welcome return of the Bright Ideas Initiative and in 2015 €100,000 in financial support was given to 40 Community Projects and Ideas that support innovation and transformation in communities and neighbourhoods allowing them to thrive. The Bank also supported the primary schools creative writing programme ‘Fighting Words’

that encourages and develops creativity amongst over 5,000 primary school children each year. In October KBC was certified with the Business Working Responsibly Mark by Business in the Community Ireland (BITCI). The Mark was developed by BITCI to measure and benchmark responsible and sustainable business practices. KBC is now one of 17 companies in Ireland to have achieved the Mark which looks at policy, practice and performance in the areas of ethics, corporate responsibility, sustainable practices, employee well-being, supply chain management and environmental practices. We are very committed to the principles and proud to be associated with the BITCI.

As we look forward into 2016 we see further evidence of recovery in the economy with consumer confidence and sentiment trending on a positive trajectory. The Bank is making good progress to delivering on its strategy to become Ireland’s retail bank of the future. Our focus of investment in digital channels and the expansion of our physical network is delivering a new, relevant and compelling banking proposition for Irish consumers. We will continue to listen to our customers to understand their banking needs so that we develop propositions and products that are relevant to them. Furthermore we will be striving to create the best customer experience for the customers that join the Bank of You.

I would like to thank all of my colleagues for their commitment and hard work and the energy they have displayed while building the new retail bank. Our customers consistently provide us with feedback that the quality of staff and service they experience are what make us a great bank to deal with.

I would like to thank Mr. Luc Gijsens as Chairman of the Bank for his support and the KBC Group who has made significant investment in KBC Bank Ireland over the past number of years to help deliver on our strategy.  That support has been invaluable in realising our vision. Over the past number of years we have received significant contribution from Mr. Bart Guns and I would like to thank him for his service to the Bank and welcome new colleagues Mr. Martin Jarolím and  Mr. Luc Cool. Finally, I would like to thank and acknowledge the management team for their contribution over 2015 and I look forward to working with them in the year ahead. 

Wim Verbraeken Chief Executive

March 2016

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Luc GijsensChairmanLuc Gijsens is Chairman of KBC Bank Ireland. He has 38 years experience in investment and corporate banking. Between 1981 and 1988, he was assigned to the International Network (Hong Kong, Bahrain, Los Angeles), returning to Belgium in 1988 to take up a position in the Corporate Division, where he ultimately took charge of the Antwerp Corporate Office as General Manager in 1994. He was appointed Senior General Manager of the Investment Banking Directorate in 2000 and then Senior General Manager of the Corporate and Institutional Banking Directorate in 2001. Mr. Gijsens was appointed to the KBC Group Executive Committee in 2011. He is CEO of International Markets for the KBC Group. Mr Gijsens was appointed Chairman of KBC Bank Ireland in 2014.

Des McCarthyExecutive Director

Des McCarthy is Chief Financial Officer for KBC Bank Ireland and is a member of the Bank’s Executive Committee and Board of Directors. Des joined KBC in 1991 and has undertaken a number of roles in domestic and international lending for the KBC Group. Most recently Des was an Executive Director and Head of Credit of KBC Finance Ireland, the international project finance arm of KBC Group. Desholds a BA in Pure Economics and a Masters in Business Studies specialising in Banking and Finance both from UCD and is a member of the UK Association of Corporate Treasurers.

Dara DeeringExecutive Director

Dara Deering is Executive Director and Head of Retail Banking at KBC Bank Ireland. Dara was appointed Executive Director with responsibility for Retail Banking in KBC Bank Ireland in February 2012. Since joining Dara has led the launch and implementation of a new Retail Bank, broadening the range of products and services available, and offering a new banking alternative for Irish consumers. In February 2015 Dara also assumed executive responsibility for the Arrears Support Unit in KBC Bank Ireland. Prior to joining KBC Bank Ireland, Dara worked in leadership positions in the retail financial services industry for a number of years. She holds an MBA from Smurfit Business School and a Bachelor of Science Management from Trinity College Dublin.

Christine Van RijsseghemNon-Executive Director

Christine Van Rijsseghem graduated in 1985 from the Faculty of Law at the University of Ghent (Belgium). Subsequently she completed an MBA in Financial Sciences at Vlerick Management School in Ghent (Belgium). She started her career at KBC (formerly Kredietbank) in 1987 at the Central Foreign Entities Department. Initially she was responsible for risk management and controlling and international acquisition strategy, and later on became head of that department. In 1994 she was appointed Head of the Credit Department of KBC Bank Ireland (formerly Irish Intercontinental Bank). In 1996 she became CEO of KBC France and in 1999 of KBC’s London branch. From 2000 to 2003 she was Senior General Manager of the Securities & Derivatives Processing Directorate of KBC Group. She was appointed Senior General Manager of KBC Group Finance in 2003 and was appointed Chief Risk Officer of KBC Group and a member of the KBC Group Executive Committee in May 2014. She was appointed to the Board of KBC Bank Ireland in 2014 and is Chair of the Risk and Compliance Committee.

Wim VerbraekenChief ExecutiveWim Verbraeken is Chief Executive of KBC Bank Ireland. He graduated with a degree in civil engineering and started his career in 1984 as a Career Officer in the Belgian Army as a troop commander of Combat Engineers and subsequently was team leader Chief Engineer on military infrastructure projects. He joined KBC in 1992 as Fund Manager for real estate investments. His first international assignment with KBC was in the Dublin-based KBC Project Finance unit between 1996 and 2000. During his 23 years working with KBC, Wim has held a number of senior management roles including Head of Project Finance, the Americas, based in New York, and General Manager, KBC Bank Hong Kong Branch, and more recently Senior

Managing Director, with management board responsibility for Credit and ALM in Absolut Bank, Moscow. He joined KBC Bank Ireland in July 2013 when he was appointed Chief Financial Officer and Chief Operating Officer. At this time he also joined the Executive Committee and Board of Directors of KBC Bank Ireland. Wim is a graduate of the Royal Military Academy of Belgium (Polytechnic Division) (1983) and holds an MBA specialising in Finance and International Management from Katholieke Universiteit Leuven (1992).

BOARD OF DIRECTORS

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Martin Jarolím Non-Executive Director

Martin Jarolím graduated from Charles University in Prague, Mathematics and Physics Department, where he studied from 1990 to 1995 specialising in Optimisation and Mathematical Economics. From 1995 to 2000, he studied at Charles University in Prague, Centre for Economic Research and Graduate Education (CERGE), – Ph.D. with the thesis Direct Foreign Investment and Foreign Trade. In 2000, Mr. Jarolím joined CSOB where he has worked in various professional and management positions. Since 2011 he worked as the general manager of the retail branch network.In 2014 KBC asked him to take up the position of Senior General Manager Core Communities Banking & International Markets in Brussels. Throughout his career Martin Jarolim attended various specialist and managerial courses. Mr Jarolím was appointed to the Board of KBC Bank Ireland in 2015 and is Deputy Chairman of the Risk and Compliance Committee and a member of the Audit Committee.

Gary BrittonIndependent Non- Executive Director

Gary Britton was appointed as a Non-Executive Director of KBC Bank Ireland in January 2012. Mr. Britton is a Chartered Accountant. He was previously a partner in KPMG (1989 to 2011) where he served in a number of senior positions, including the firm’s Board, the Remuneration and Risk Committees and as Head of its Audit Practice. Mr. Britton is a member of the Board of The Irish Stock Exchange plc and Chairman of its Audit Committee; he is on the Board of Cairn Homes plc and Chairman of its Audit and Risk Committee; he is also on the Board of The Cheshire Foundation of Ireland and Chairman of its Finance and Audit Committee. He is a Fellow of the Institute of Chartered Accountants in Ireland, a graduate of Trinity College Dublin and a Certified Bank Director. Mr. Britton is Deputy Chairman of the Audit Committee and a member of the Risk and Compliance Committee.

Robert PowerIndependent Non- Executive Director

Robert Power was appointed as a Non-Executive Director of KBC Bank Ireland in May 2010. In 1981 Mr. Power joined Cornmarket Group Financial Services Ltd (now an Irish Life Company) which provides personal financial services tailored for members of public sector unions. Mr. Power held a number of senior roles in Sales, Project Management, Marketing and Investments, was appointed Director in 1988 and subsequently Deputy Managing Director. Mr. Power resigned in 2009 in order to focus on his other business interests and to develop Global Schoolroom, an Irish/Indian teacher training NGO of which he is now Chairman. He is a non-executive director of Image Publications Ltd., one of Ireland’s leading magazine publishers, and of Affinity First Ltd. He is also Managing Director of Emeritus Consulting Ltd. which provides financial consultancy services. Mr. Power is a Legal Science graduate of Trinity College (1980), holds a Masters Degree in Economics from the London School of Economics (1981) and is a Certified Bank Director. Mr. Power is a member of the Risk and Compliance Committee and the Audit Committee.

John MaloneIndependent Non- Executive Director

John Malone was appointed as a Non-Executive Director of KBC Bank Ireland in October 2009.Mr. Malone joined the Public Service as an Executive with the Department of Agriculture in 1969. He held many senior roles within the Department of Agriculture culminating in his appointment in 1997 as Secretary General of the Department of Agriculture and Food. Mr. Malone retired from the Public Service in 2005. Mr. Malone has carried out a number of assignments in the public and private sector. He is Chairman of the Audit Committee of the Comptroller and Auditor General’s Office and Chairman of the Audit Committee of the Department of the Taoiseach (Irish Prime Minister). He is also Chairman of the Irish Equine Foundation Ltd. Mr. Malone holds a BA in Politics and Economics from University College Dublin (1974) and is also a Certified Bank Director. Mr. Malone is Chairman of the Audit Committee and a member of the Risk and Compliance Committee.

Luc CoolChief Risk Officer

Luc was appointed member of the Bank’s Executive Committee and Board of Directors in May 2015. In his role, he is overseeing the various types of risk across the Bank’s activities and is driving the risk management strategy. Luc has been in the financial service industry for more than 25 years and held various managerial roles within KBC Group, KBC Bank Ireland’s parent company. Prior to joining KBC Bank Ireland in 2015, Luc was the Chief Risk Officer for the Hungarian operations of KBC Group since 2010. Luc holds a Masters Degree in Business Economics from Antwerp University (1987).

Damian O’Neill Company Secretary

Damian O’Neill was appointed the Company Secretary of KBC Bank Ireland in January 2010. He joined the Bank in 1990 as a qualified accountant and has held a number of senior positions in Finance, Risk Management and Compliance. He previously worked in PwC and in Australia. He is a Fellow of the Institute of Chartered Accountants in Ireland. He is also a member of the Institute of Directors, the Association of Compliance Officers in Ireland and the Corporate Governance Association of Ireland. He is a Law graduate of UCD and holds a diploma in Corporate Governance from UCD.

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STATEMENT of profit or loss

Directors’ StatementThese non-statutory financial statements, comprising the Summary Consolidated Statement of Profit or Loss and Summary Consolidated Statement of Financial Position, are not the statutory financial statements of the company. These non-statutory financial statements are prepared for the purposes of compliance with Section 20 of the Central Bank Act, 1971, using the information contained in the Bank’s statutory financial statements. The statutory financial statements for 2015 will be annexed to the annual return and delivered to the Registrar before the end of October 2016. The statutory auditors of the company have made a report under section 391 in the form required by section 336 in respect of the statutory financial statements of the company for 2015. The matters referred to in the statutory auditors’ report were unqualified, and the statutory auditors’ report did not include a reference to any matters to which the statutory auditors drew attention by way of emphasis without qualifying the report.

Approved by the Directors on 11 March 2016Approved by the Board on 11 March 2016

Luc Gijsens Chairman Des McCarthy Chief Financial OfficerWim Verbraeken Chief Executive Damian O’Neill Company Secretary

Summary Consolidated Statement of Profit or Loss for year ended 31 December 2015

2015€’000

2014€’000

Net operating income 268,364 242,680

Operating expenses (149,010) (136,006)

Impairment losses (47,560) (207,426)

Operating Profit/Loss before corporation tax 71,794 (100,752)

Corporation tax 3,215 10,211

Profit/Loss for the year 75,009 (90,541)

STATEMENT of financial position

Summary Consolidated Statement of Financial Positionfor year ended 31 December 2015

2015€’000

2014€’000

Equity

Ordinary share capital 2,283,048 2,123,048

Capital conversion reserve fund 647 647

Share premium 27,051 27,051

Other equity 280,000 280,000

Reserves (1,435,440) (1,538,010)

Total Equity 1,155,306 892,736

Liabilities

Parent and other bank funding 6,854,433 8,240,467

Deposits from customers 5,137,499 4,218,444

Other liabilities including taxation 340,362 361,912

Total Liabilities 12,332,294 12,820,823

Total Equity and Liabilities 13,487,600 13,713,559

Assets

Balances with banks and money at call or short notice 627,040 543,769

Investment securities 1,173,463 967,749

Loans and advances to customers 11,288,953 11,738,766

Other assets 343,013 414,537

Fixed assets 55,131 48,738

Total Assets 13,487,600 13,713,559

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Auditors statement Corporate governance

Independent Auditors’ Statement to the members of KBC Bank Ireland plc on the Summary Consolidated Financial Statements for the year ended 31 December 2015

We have examined the Summary Consolidated Financial Statements for the year ended 31 December 2015, which comprise the Summary Consolidated Statement of Profit or Loss and Summary Consolidated Statement of Financial Position. This statement is made solely to the company’s members, as a body. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this statement, or for the opinions we have formed. Respective Responsibilities of Directors and Auditors

The Directors are responsible for the preparation of the Summary Consolidated Financial Statements for the purposes of compliance with Section 20 of the Central Bank Act, 1971.

Our responsibility is to report to you our opinion on the consistency of the Summary Consolidated Financial Statements within the summary annual report with the full annual Consolidated Financial Statements, on which we reported on 11 March 2016.

We also read the other information contained in the Summary Consolidated Financial Statements and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Summary Consolidated Financial Statements. The other information comprises only the Chairman’s Statement and the Chief Executive’s Review. Opinion

In our opinion, the Summary Consolidated Financial Statements are consistent with the full annual Consolidated Financial Statements for the year ended 31 December 2015. Ernst & Young Chartered Accountants and Registered Auditors Dublin 11 March 2016

Corporate Governance

Commitment to integrity is a cornerstone of our mission statement. KBC Bank Ireland (‘The Bank’) is committed to maintaining the highest standards of corporate governance, ethics, business integrity and professionalism in all of our activities. These standards are embedded in the corporate culture, reflected in our code of conduct, and reinforced through continuing communication and training.

During 2015, the Bank was subject to the Central Bank of Ireland’s Corporate Governance Code for Credit Institutions and Insurance Undertakings (“Corporate Governance Code”) (which is available on www.centralbank.ie) and was required to comply with the additional requirements of the Corporate Governance Code applicable to “major institutions”. Since 11 January 2016, the Bank is subject to the Central Bank of Ireland’s Corporate Governance Requirements for Credit Institutions 2015 (“Corporate Governance Requirements”) (which is available on www.centralbank.ie) and as the Bank is designated as a “High Impact” institution, the Bank is required to comply with the additional obligations set out in Appendix I of the Corporate Governance Requirements.

Role of the Board

The Board is the principal decision making forum for the Bank and is responsible to the Shareholder and other stakeholders for the leadership, direction and control of the Bank. It establishes the strategic objectives, corporate values and ethical standards that drive the activities of the Bank.

Audit Committee

The Audit Committee assists the Board by supervising the integrity, efficiency and effectiveness of the internal control measures in place and monitoring the effectiveness and adequacy of the Bank’s internal audit function. The Audit Committee also assists the Board in relation to the financial reporting obligations of the Bank. The Audit Committee is comprised of non-executive directors, the majority of whom are independent.

Risk and Compliance Committee

The Risk and Compliance Committee assists the Board in discharging its responsibilities of ensuring that risks are properly identified, reported, assessed and controlled and that the Bank’s strategy is consistent with the Bank’s risk appetite. The Risk and Compliance Committee also assists the Board by supervising compliance with laws, regulations, ethics and fraud policies. The Risk and Compliance Committee is comprised of non-executive directors.

Internal Control and Risk Management

The Board acknowledges its overall responsibility for the Bank’s system of internal control and for reviewing its effectiveness. The Board has established a process for the identification, evaluation and management of the significant risks faced by the Bank, and regularly reviews this process. Line management has primary responsibility for risk management. It ensures that risk management relating to the business is embedded in the business through policies and procedures. The Bank has also established a specialised risk oversight committee to monitor and assess significant risks, including business, operational, financial and compliance risks, and to review the effectiveness of internal control.

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As the Bank of You, the lasting impact of our Corporate Social Responsibility (CSR) and Sustainability programme lies in helping you, our customers, staff and communities, to share in our vision for improving communities across Ireland.

In 2015 we began to take a much broader view of CSR and focus on Sustainability through our environmental and social impact - this focus will continue and grow into 2016.

Our environmental impactWe continued to focus on both our direct and indirect impact on the environment, contributing to a greener future for all.

Our SOCIAL impactOur teams were engaged in local community projects nationwide, which made an impact across a diverse range of groups. This activity will continue into 2016 through our Brighter Futures and Bright Ideas programmes.

A Focus on sustainable growth CSR and Sustainability means that we focus on our long-term performance and providing a service that meets the expectations of the communities where we do business. In 2015, we continued to grow our business in local communities and we are now well on our way to becoming Ireland’s retail bank of the future.

Some key programmes of focus in 2015 included the Brighter Futures programme and Bright Ideas.

Brighter FuturesIn 2015 we developed the Brighter Futures programme encompassing all our activities which touched communities and organisations across Ireland. All the elements of this programme ensured we could go further in our corporate social responsibility: to create shared value with you and all our stakeholders. Teams across KBC gave their time and skills to help projects across the country through fundraising and volunteering.Corporate SOCIAL

RESPONSIBILITY & Sustainability at KBC

Jack and Jill children’s foundationWe launched our 2 year partnership with the Jack and Jill Children’s Foundation during the year. This support meant that the charity’s home nursing service could be extended to reach more families in our local communities. KBC fundraising initiatives through 2015 raised a total of €35,000 which was matched by the organisation providing total funding of €70,000.

Up the Hill for Jack and Jill

EnactusKBC also supported activity by Enactus – a community of student, academic and business leaders who use entrepreneurial action to contribute to a more sustainable world. KBC volunteers acted as business advisors for the Enactus programme. Teams from across KBC have been actively involved in mentoring student teams, providing training and in judging Enactus Ireland Competitions.

fighting words In 2015 we sponsored the Fighting Words primary schools programme for the 2015/2016 academic year. Irish writer Roddy Doyle, along with Sean Love, set up Fighting Words to provide free creative writing programmes and workshops for primary school children.

KBC’s sponsorship saw some 6,000 children in 1st to 6th class from schools all over Ireland benefit from the programme. During a session, children brainstorm an idea for a book, develop their story and take home a copy to treasure.

Roddy Doyle chats to 2nd Class Pupils from St Vincent de Paul Girls School, Marino while attending their Fighting Words workshop.

BRight IdeasTo show our support for communities in a meaningful way, we developed a unique proposition to grant funds to community groups and deliver a real impact in the community. In 2015, 40 ideas were selected by local judging panels to share in €100,000. The winning projects were presented with their funding at 5 regional events hosted in KBC Hubs. Two regional winners per area went forward for a chance to become Ireland’s Brightest Idea, where members of the public voted on Facebook and Twitter for their favourite cause.

The winning idea was announced at an event in October 2015 and Cork’s Rainbow Club for Autism received an extra €5,000 in funding.

The selected projects address a variety of social needs, spanning urban regeneration, learning and development, sports and play, and wellbeing. Bright Ideas was extremely well-received by the community in 2015 with over 300 entries in total received from worthy causes around Ireland.

Rainbow Club for Autism, Cork

Energy consumption on site has been reduced. This has led to a reduction of nearly

1 06 0hours of volunteering was completed by KBC teams.

4 05 instances of people engaging in volunteering and voluntary fundraising activity.

8 %4 of KBC staff were commuting to work by sustainable means.

kbc brighter futures

CSR IN NUMBERS

6 00 00 Kg in CO2 emissions.

2 4 people trained in dancing and performed as part of KBC Can Dance, raising

Up the Hill for Jack & Jill The Hillwalking group climbed Lugnaquilla as part of this fundraising initiative.

Business Advisors mentored students with Enactus.11

2 01 00€6 00 0 children attended the creative writing

workshops with Fighting Words.

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About kbc

KBC Bank has been providing banking services in Ireland for over 40 years and is part of the KBC Group, one of Europe’s most recognisable financial institutions since 1978.

With over 1,000 employees in Dublin, Cork, Limerick, Galway, Kilkenny, Waterford and Kildare, we are dedicated to creating a bank where the customer comes first. We take a Bank of You approach to all our products and services and in our dealings with customers, shareholders, staff and communities. A member of one of Europe’s largest banking groups, KBC is committed to delivering responsible but innovative banking that is grounded in customer and shareholder value.

KBC Group is an integrated bancassurance group, catering mainly for retail, private banking, SME and mid-cap customers. Geographically, the group operates through banking and insurance subsidiaries in Belgium, the Czech Republic, Slovakia, Hungary, Bulgaria and Ireland. The group has a limited presence elsewhere in the world, primarily to support corporate customers from its core markets.

Galway124 Eyre Square Centre, GalwayTel: (353 91) 560 900email: galwayhub@kbc.ie

Limerick103-104 O’Connell Street, LimerickTel: (353 61) 448 600email: limerick@kbc.ie

WiltonWilton Shopping Centre, Wilton, CorkTel: (353 21) 601 5200Email: wiltonhub@kbc.ie

Lapp’s Quay4 Lapp’s Quay, CorkTel: (353 21) 422 2600email: corkretailhub@kbc.ie

StillorganLower Kilmacud Road,Stillorgan, Co. DublinTel: (353 1) 513 1020email: stillorgan@kbc.ie

Swords47 Main StreetSwords, Co. DublinTel: (353 1) 513 1000email: swordshub@kbc.ie

Waterford 55 High Street, Waterford Tel: (353 51) 515 980email: waterfordhub@kbc.ie

Naas33 North Main Street, Naas, Co. KildareTel: (353 1) 513 1080email: naas@kbc.ie

MaynoothManor Mills Shopping CentreMaynooth, Co KildareTel: (353 1) 513 1040email: maynoothhub@kbc.ie

KilkennyRose Inn Street, KilkennyTel: (353 56) 774 6980 email: kilkenny@kbc.ie

Greystones1a Church Road, Greystones, Co WicklowTel: (353 1) 513 1100email: greystoneshub@kbc.ie

College Green16-17 College Green, Dublin 2Tel: (353 1) 513 1120email: collegegreenhub@kbc.ie

DundrumDundrum Village Shopping Centre, Dublin 16Tel: (353 1) 513 1060email: dundrum@kbc.ie

Baggot Street142–143 Lower Baggot Street, Dublin 2.Tel: (353 1) 639 2000email: baggotstreet@kbc.ie

Grand Canal 3 Forbes Street,Grand Canal Plaza, Dublin 2.Tel: (353 1) 700 1700email: grandcanalhub@kbc.ie

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Customer ServiceTel: 1800 51 52 53 email: customerservices@kbc.ie

Sales ServiceTel: 1800 93 92 44email: salesenquiries@kbc.ie

Company information Management team

KBC Bank Ireland plcShare Capital €’000Authorised 2,500,000Issued Ordinary 2,283,048Held by KBC Group 100%

Registered OfficeSandwith Street,Dublin 2.Registered in the Republic of IrelandNumber 40537Tel: (353 1) 664 6000Fax: (353 1) 664 6099Email: firstname.surname@kbc.ieSwift Code ICON IE2DWebsite: www.kbc.ie

AuditorsErnst and Young,Harcourt Centre,Harcourt Street,Dublin 2.

SolicitorsArthur Cox,Arthur Cox Building,Earlsfort Terrace,Dublin 2.

KBC Fund Management LimitedJoshua Dawson House,Dawson Street,Dublin 2.Tel: (353 1) 514 8800Fax: (353 1) 514 8701Email: firstname.surname@kbcfm.com

KBC Bank NV, Dublin BranchSandwith StreetDublin 2.Tel: (353 1) 664 6000Fax: (353 1) 664 6099Email: firstname.surname@kbc.ie

KBC Finance IrelandKBC House,4 George’s Dock,IFSC,Custom House Dock,Dublin 1.Tel: (353 1) 670 0888Fax: (353 1) 670 0855Email: firstname.surname@kbc.ie

KBC Asset Management NV, Dublin BranchSandwith StreetDublin 2.Tel: (353 1) 664 6000Fax: (353 1) 664 6099Email: firstname.surname@kbc.ie

Board of DirectorsLuc Gijsens Chairman (Belgian)

Wim Verbraeken Chief Executive (Belgian)

Dara Deering Executive Director

Martin Jarolím Executive Director (Czech)

Des McCarthy Executive Director

Christine Van Rijsseghem Non-Executive Director (Belgian)

Gary Britton Independent Non-Executive Director

John Malone Independent Non-Executive Director

Robert Power Independent Non-Executive Director

Luc Cool Chief Risk Officer (Belgian)

Damian O’Neill Company Secretary

ManagementAlma Corrigan Change Management

Conal Couchman Operational Risk

Edward Dillon Retail Products

Brian Dunne Legal Services

Barry D’Arcy Finance

Grant Hourigan Internal Audit

Austin Hughes Chief Economist

Rob Hurley Retail Enablement

Una Kilduff Human Resources

Darragh Lennon ASU & Professional Products

Cathy McNamara Credit Acceptance

Brendan Mahon Credit Risk/ALM Risk Management

Anne Marie Malone Risk Oversight

Michael O’Reilly IT Operations

Fergal O’Riagain Corporate Banking and Recovery

Aidan Power Customer, Brand and Marketing

Judy Ryan Compliance

Terry Sullivan Treasurer

Eamonn Tuffy Operations

Pat Watt Retail Distribution & eChannels

Patrick C. McEvoy Honorary Life President

Executive CommitteeWim Verbraeken Chief Executive (Belgian)

Dara Deering Executive Director

Luc Cool Executive Director, Chief Risk Officer (Belgian)

Des McCarthy Executive Director, Chief Financial Officer

Evert Vandenbussche Chief Operations Officer (Belgian)

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KBC Bank Ireland plc is regulated by the Central Bank of Ireland.

YOU BE YOUWE’LL BE YOUR BANK