Kbc Group N.v. · EURONEXT:KBC

Kbc — Debt Investor Presentation (August 2019)

72 slides from Kbc's debt investor presentation, August 2019

  1. Slide 1: KBC Group / Bank Debt presentation August 2019

    KBC Group / Bank Debt presentation August 2019 More infomation: www.kbc.com KBC Group - Investor Relations Office – Email: IR4U@kbc.be 1

  2. Slide 2: Important information for investors

    Important information for investors  This presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by the KBC Group.  KBC believes that this presentation is reliable, although some information is condensed and th

  3. Slide 3: KBC Passport

    KBC Passport Well-defined core markets: access to ‘new growth’ in Europe Market share (end 2018) BE CZ SK HU BG IRL 20% 19% Loans and deposits 10% 11% 10% 9%* 3.5m clients 3.7m clients 575 branches 233 branches 32% 23% 101bn EUR loans 29bn EUR loans 13% 14% Investment funds 7% 129bn EUR dep. 39bn EU

  4. Slide 4: KBC Passport: legal structure and issuer of debt instruments

    KBC Passport Group’s legal structure and issuer of debt instruments KBC Group NV  AT 1  Tier 2 MREL  Senior 100% 100% KBC Bank* KBC Insurance  Covered bond  No public issuance KBC IFIMA**  Retail and Wholesale EMTN * End of April 2019 the opportunity was taken to simplify the shareholders’ str

  5. Slide 5: Contents

    Contents 1 Strategy and business profile SHAREHOLDER STRUCTURE AT END 1H19 2 Financial performance MRBB Other core 7.3% Cera 11.5% 3 Solvency, liquidity and funding 2.7% 4 Covered bond programme KBC Ancora 18.6% 5 Green Bond framework 59.9% Free float 6 Looking forward  Roughly 40% of KBC shares ar

  6. Slide 6: KBC Group in a nutshell (1)

    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

  7. Slide 7: KBC Group in a nutshell (2)

    KBC Group in a nutshell (2)  High profitability CET1 generation C/I ratio Combined ratio Net result ROE before any deployment 277 bps 279 bps 271 bps EUR 57% 88% 2570m EUR 16% 59% 92% 1175m 15% 2016 2017 2018 FY18 1H19  Solid capital position…  … and robust liquidity positions Fully loaded Basel

  8. Slide 8: KBC Group in a nutshell (3)

    KBC Group in a nutshell (3)  We aim to be one of the better capitalised financial institutions in Europe • Every year, we assess the CET1 ratios of a peer Flexible buffer for M&A 1.7% group of European banks active in the retail, SME and corporate client segments. We position ourselves on the fully

  9. Slide 9: More of the same, but differently

    More of the same, but differently Aiming to be among the best performing financial institutions in Europe  KBC wants to be among Europe’s best performing financial institutions. This will be achieved by: • Strengthening our bank-insurance business model for retail, SME and mid-cap clients in our co

  10. Slide 10: Our bank-insurance model

    Our bank-insurance model In different countries, different stages of implementation Level 4: Integrated distribution and operation Acting as a single operational company: bank and insurance operations working under unified governance and achieving commercial and non- Belgium commercial synergies Lev

  11. Slide 11: More of the same… but differently…

    More of the same… but differently… Enhanced channels for empowered clients Creating superior client satisfaction via a seamless, multi-channel client-centric distribution approach Investing €1.5bn cash-flow (2017-20): • Further optimise our integrated distribution model according to a real-time omni

  12. Slide 12: KBC the reference… Group financial guidance

    KBC the reference… Group financial guidance (Investor visit 2017) Guidance End 2018 CAGR total income (‘16-’20)* ≥ 2.25% by 2020 2.5% (CAGR FY18 – FY16) C/I ratio banking excluding bank tax ≤ 47% by 2020 51% (FY2018) C/I ratio banking including bank tax ≤ 54% by 2020 57.5% (FY2018) Combined ratio ≤

  13. Slide 13: KBC the reference… Group non-financial guidance

    KBC the reference… Group non-financial guidance (Investor visit 2017) Non-financial guidance: End 2018 Non-financial guidance: End 2018 CAGR Bank-Insurance clients (growth CAGR Bank-Insurance stable clients (growth FY18-FY16) FY18-FY16) (1 Bank product + 1 Insurance product) (3 Bk + 3 Ins products i

  14. Slide 14: Sustainability: core of our strategy

    Sustainablity The core of our sustainability strategy Strict policies for our day-to-day activities Four focus domains that are close to our core activities Focus on sustainable investments Limiting our Increasing our Financial Stimulating Reducing our own environmental adverse impact positive impac

  15. Slide 15: Our non-financial environmental targets

    Sustainablity Our non-financial environmental targets Indicator Goal 2018 2017 Share of renewables in total energy Minimum 50% by 2030 43.8% 41.1% credit portfolio Financing of coal-related activities Immediate stop of coal-related activities and 34m EUR exposure 86m EUR exposure gradual exit in the

  16. Slide 16: Contents

    Contents 1 Strategy and business profile BREAKDOWN OF ALLOCATED CAPITAL BY BUSINESS UNIT AS AT 2 Financial performance 30 JUNE 2019 3 Solvency and liquidity Czech Republic 15% 4 Covered bond programme Belgium 61% 5 Green bond framework 21% International Markets 6 Looking forward 3% Group Centre Appe

  17. Slide 17: 2Q 2019 key takeaways

    2Q 2019 key takeaways 2Q19 financial performance* 1H19  Commercial bank-insurance franchises in core  ROE 15.4% * markets performed well  Cost-income ratio 59% (adjusted for specific items)  Customer loans and customer deposits**  Combined ratio 92% increased in most of our core countries  Cre

  18. Slide 18: Net result at KBC Group

    Net result at KBC Group CONTRIBUTION OF BANKING ACTIVITIES TO KBC GROUP NET RESULT* 603 618 574 539 461 334 NET RESULT AT KBC GROUP* 745 692 701 621 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 556 430 CONTRIBUTION OF INSURANCE ACTIVITIES TO KBC GROUP NET RESULT* 155 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 74 124 107 93 102

  19. Slide 19: Higher net interest income and lower net interest margin

    Higher net interest income and lower net interest margin NII Amounts in m EUR 1,125 1,117 1,136 1,166 1,129 1,132  Net interest income (1,132m EUR) 0 27 1 19 128 2 17 125 2 24 118 4 16 1 12 • Slightly increased q-o-q and up by 1% y-o-y. Note that NII 128 124 114 banking increased by 1% q-o-q and by

  20. Slide 20: Higher net fee and commission income

    Higher net fee and commission income F&C Amounts in m EUR  Net fee and commission income (435m EUR) 450 438 424 435 • Up by 6% q-o-q and slightly down y-o-y 407 410 • Q-o-q increase was the result chiefly of the following: 215 223 219 225 219 230 o Net F&C income from Asset Management Services incr

  21. Slide 21: Insurance premium income up y-o-y and good combined ratio

    Insurance premium income up y-o-y and good combined ratio PREMIUM INCOME (GROSS EARNED PREMIUMS)  Insurance premium income (gross earned 825 premiums) at 742m EUR 766 714 707 696 742 • Non-life premium income (425m) increased by 9% 416 351 317 y-o-y 336 315 293 • Life premium income (317m) down by

  22. Slide 22: Non-life and life sales up y-o-y

    Non-life and life sales up y-o-y NON-LIFE SALES (GROSS WRITTEN PREMIUM)  Sales of non-life insurance products 534 • Up by 8% y-o-y thanks to a good commercial 492 performance in all major product lines in our core 412 382 378 373 markets and tariff increases 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19  Sales of

  23. Slide 23: Lower FV gains and higher net other income

    Lower FV gains and higher net other income FV GAINS  The lower q-o-q figures for net gains from financial 96 54 99 instruments at fair value were attributable mainly 79 2 62 to: 78 55 45 36 • weak dealing room income 11 4 19 33 22 32 29 8 19 • a negative change in ALM derivatives -5 2 11 -3 -8 -21

  24. Slide 24: Strict cost management

    Strict cost management OPERATING EXPENSES  Excluding the 1-month full consolidation of ČMSS, bank tax, FX effect and one-off costs, operating 1,291 1,296 expenses in 1H19 rose by roughly 1% y-o-y 382 371 966 24 981 26 996 41 988 30  Cost/income ratio (banking) adjusted for specific items* at 60% i

  25. Slide 25: Lower asset impairments, benign credit cost ratio and improved impaired loans ratio

    Lower asset impairments, benign credit cost ratio and improved impaired loans ratio ASSET IMPAIRMENT 69  Lower asset impairments q-o-q 1 43 40 • This was attributable mainly to: 13 67 4 o lower loan loss impairments in Belgium, as 1Q19 was 30 36 6 20 6 impacted by a few corporate files -8 -63 -21 -

  26. Slide 26: Loan loss experience at KBC

    Loan loss experience at KBC 1H19 FY18 FY17 FY16 FY15 AVERAGE CREDIT COST CREDIT COST CREDIT COST CREDIT COST CREDIT COST ‘99 –’18 RATIO RATIO RATIO RATIO RATIO Belgium 0.20% 0.09% 0.09% 0.12% 0.19% n/a Czech 0.04% 0.03% 0.02% 0.11% 0.18% n/a Republic International -0.01% -0.46% -0.74% -0.16% 0.32% n

  27. Slide 27: Impaired loans ratios, of which over 90 days past due

    Impaired loans ratios, of which over 90 days past due KBC GROUP BELGIUM BU 5.9% 2.6% 2.6% 2.6% 5.5% 5.5% 2.4% 2.4% 2.3% 4.3% 4.3% 3.7% 3.5% 3.2% 3.2% 1.3% 1.3% 2.5% 2.4% 1.2% 1.2% 1.2% 1.1% 2.1% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Impaired loans ratio Of which over 90 days pa

  28. Slide 28: Cover ratios

    Cover ratios KBC GROUP BELGIUM BU 68.1% 67.7% 66.8% 65.7% 65.6% 67.6% 66.4% 66.0% 63.4% 64.4% 62.5% 59.9% 47.8% 48.0% 47.2% 45.9% 44.8% 45.3% 44.2% 44.4% 43.0% 42.2% 41.6% 42.1% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Impaired loans cover ratio Cover ratio for loans with over 90

  29. Slide 29: Overview of contribution of business units to 1H19 result

    Overview of contribution of business units to 1H19 result Amounts in m EUR NET PROFIT – KBC GROUP 1H19 ROAC: 21%* 2,639 2,575 2,570 2,427 1,090 1,322 1,463 1,314 1,175 1,485 1,248 1,176 1,113 2015 2016 2017 2018 1H19 2H 1H NET PROFIT – BELGIUM NET PROFIT – CZECH REPUBLIC NET PROFIT – INTERNATIONAL M

  30. Slide 30: Balance sheet

    Balance sheet KBC Group consolidated at 30 June 2019 Total assets Total liabilities and equity (EUR 289bn) (EUR 289bn) Credit quality 154 170 Capital adequacy & liquidity position 62 19 30 14 19 5 13 6 54 33 Loan book (loans and advances to customers) Deposits from customers Investment portfolio (eq

  31. Slide 31: Loans and deposits continue to grow in most core countries

    Balance sheet: Loans and deposits continue to grow in most core countries 9% BE 7% Customer deposit volumes 4% excluding debt certificates 3% & repos +3% y-o-y 0% Y-O-Y ORGANIC* VOLUME GROWTH -1% Loans** Retail Deposits*** Loans** Retail Deposits*** mortgages mortgages 8% 6% 4% 4% 4% 4% 3% 3% Custom

  32. Slide 32: Sectorial breakdown of outstanding loan portfolio

    Sectorial breakdown of outstanding loan portfolio (1) (173bn EUR*) of KBC Bank Consolidated Services 11% Distribution Oil, gas & other fuels Electricity 7% Hotels, bars & restaurants Shipping 0.7% 1.6% Private Persons 0.8% 0.6% 41% Food producers Machinery & heavy equipment 1.0% 1.7% 14% Rest Chemic

  33. Slide 33: Geographical breakdown of the outstanding loan portfolio

    Geographical breakdown of the outstanding loan portfolio (2) (173bn EUR*) of KBC Bank Consolidated North America Asia Other CEE Rest Other W-Eur 1.7% 0.4% 8.4% 1.5% Bulgaria 1.6% Hungary 1.9% 3.1% Slovakia 4.9% Ireland 5.9% 53.3% Belgium 17.4% Czech Rep. * It includes all payment credit, guarantee c

  34. Slide 34: Government bond portfolio – Notional value

    Government bond portfolio – Notional value  Notional investment of 44.6bn EUR in government bonds (excl. trading book) at end of 1H19, primarily as a result of a significant excess liquidity position and the reinvestment of insurance reserves in fixed-income instruments  Notional value of GIIPS ex

  35. Slide 35: Contents

    Contents 1 Strategy and business profile 2 Financial performance 3 Solvency, liquidity and funding 4 Covered bond programme 5 Green bond framework 6 Looking forward Appendices 35

  36. Slide 36: More stringent ECB approach re. dividend policy

    More stringent ECB approach re. dividend policy Our unchanged dividend policy / capital distribution to shareholders • Payout ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit • Interim dividend of 1 EUR per share in November of each accounting year as an advance on th

  37. Slide 37: Strong capital position

    Strong capital position Fully loaded Basel 3 CET1 ratio at KBC Group (Danish Compromise)  The common equity ratio slightly decreased 15.9% 15.8% 16.0% 16.0% 15.7% * 15.6% * from 15.7% at the end of 1Q19 to 15.6%* at the end of 2Q19 based on the Danish 14.0% ‘Own Capital Target’ Compromise due mainl

  38. Slide 38: Fully loaded Basel 3 leverage ratio and Solvency II ratio

    Fully loaded Basel 3 leverage ratio and Solvency II ratio Fully loaded Basel 3 leverage ratio at KBC Group Fully loaded Basel 3 leverage ratio at KBC Bank 6.0% 6.1% 6.1% 6.0% 6.1% 5.7% 5.1% 5.2% 5.2% 5.2% 5.1% 4.7% 1Q18 1H18 9M18 FY18 1Q19 1H19 1Q18 1H18 9M18 FY18 1Q19 1H19 Solvency II ratio 1Q19 1H

  39. Slide 39: Strong and growing customer funding base with liquidity ratios remaining very strong

    Strong and growing customer funding base with liquidity ratios remaining very strong  KBC Bank continues to have a strong retail/mid-cap deposit base in its core markets – resulting in a stable funding mix with a significant portion of the funding attracted from core customer segments and markets 

  40. Slide 40: Breakdown Funding Maturity Buckets

    Breakdown Funding Maturity Buckets  CoCo has been called (on 25 January 2018) (Including % of KBC Group’s balance sheet) 6000  KBC Bank placed covered bonds of 750m EUR with 8-year maturity and 1.9% 250m EUR with 20-year maturity in March 2018 1.8% 5000  KBC Group issued a perpetual non-call 7.5-

  41. Slide 41: KBC has strong buffers cushioning Sr. debt at all levels

    KBC has strong buffers cushioning Sr. debt at all levels (30 June 2019) KBC Group Senior 5 524 Tier 2 2 182 KBC Bank Additional Tier 1 KBC Insurance 1 500 Subordinated on loan by KBC Group Tier 2 5 524 CET1 (fully loaded) 500 15 031 Tier 2 Parent shareholders equity 362 1 683 Buffer for Sr. level 18

  42. Slide 42: KBC complies with resolution requirements

    KBC complies with resolution requirements  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,

  43. Slide 43: Available MREL as a % of TLOF (fully loaded)

    Available MREL as a % of TLOF (fully loaded) 10.1% 10.1% 0.4% 9.7% 9.4% 9.3% 0.4% 0.4% 8.8% 0.5% 0.4% 0.5% 9.7% 9.3% 9.7% 8.9% 8.9% 8.3% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 OpCo MREL HoldCo MREL 43

  44. Slide 44: Latest credit ratings

    Latest credit ratings Moody’s S&P Fitch Senior Unsecured Baa1 A- A Tier II - BBB A- Group Additional Tier I Ba1 BB+ - Short-term P-2 A-2 F1 Outlook Positive Stable Stable Covered Bonds AAA - AAA Senior Unsecured A1 A+ A+ - BBB - Bank Tier II Short-term P-1 A-1 F1 Outlook Positive Stable Stable - Ins

  45. Slide 45: Contents

    Contents 1 Strategy and business profile 2 Financial performance 3 Solvency, liquidity and funding 4 Covered bond programme 5 Green bond framework 6 Looking forward Appendices 45

  46. Slide 46: KBC’s covered bond programme

    KBC’s covered bond programme Residential mortgage covered bond programme 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. Issuer: • KBC Bank NV • min 105% of c

  47. Slide 47: KBC’s covered bond programme: Belgian legal framework

    KBC’s covered bond programme Belgian legal framework  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  The special estate is not affected by a bank’s insolvency National Bank of  Requires lic

  48. Slide 48: KBC’s covered bond programme: strong legal protection mechanisms

    KBC’s covered bond programme Strong legal protection mechanisms 1  The value of one asset category must be at least 85% of the nominal amount of covered bonds Collateral type • KBC Bank selects residential mortgage loans and commits that their value (including collections) will be at least 105% 2 

  49. Slide 49: KBC’s covered bond programme: Cover pool

    KBC’s covered bond programme Cover pool  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

  50. Slide 50: Contents

    Contents 1 Strategy and business profile 2 Financial performance 3 Solvency, liquidity and funding 4 Covered bond programme 5 Green bond framework 6 Looking forward Appendices 50

  51. Slide 51: Introduction to KBC’s Green Bond

    Sustainability Introduction to KBC’s Green Bond Rationale: enhancing the KBC sustainability strategy Aligned with best practices and market developments  KBC is convinced that the financial industry has a key role to play in the  The KBC Green Bond Framework is in line with the Green transition to

  52. Slide 52: First green bond (June 2018)

    Sustainability First green bond (June 2018) KBC GREEN PORTFOLIO APPROACH Certification Inclusion of KBC will ensure the existing and availability of sufficient new Green Green Assets to match  On 23 May 2018, the Climate Assets Green funding Bonds Standard Board approved the certification of the pr

  53. Slide 53: Contents

    Contents 1 Strategy and business profile 2 Financial performance 3 Solvency, liquidity and funding 4 Covered bond programme 5 Green bond framework 6 Looking forward Appendices 53

  54. Slide 54: Looking forward

    Looking forward  In line with global economic developments, the European economy is currently going through a slowdown. Decreasing unemployment rates and growing labour shortages in some European economies, combined with gradually rising wage inflation, may continue to support private Economic cons

  55. Slide 55: Appendices

    Appendices 1 Overview of outstanding benchmarks 2 Summary of KBC’s covered bond programme 3 Solvency: details on capital 4 Details on business unit international markets 5 Details on credit exposure of Ireland 55

  56. Slide 56: Annex - Outstanding benchmarks

    Annex 1 - Outstanding benchmarks Overview till end of July 2019 Amount Next Own Type Issuer Maturity coupon ISIN reset spread Trigger Level MREL (in mio) call date funds Additional Tier1 temporary   AT1 24/04/2018 KBC Group 1 000 € 24/10/2025 Perpetual 4,250% BE0002592708MS 5Y+ 359,4bps write-down

  57. Slide 57: Annex: Credit spreads evolution

    Annex 1 Credit spreads evolution Credit Spreads Evolution 140 210 120 100 160 80 110 60 40 60 20 10 0 -20 -40 0.5Y Senior Debt Opco (LHS) 5Y Covered Bond Interpolated (LHS) 5Y Senior Debt Holdco Interpolated (LHS) 7NC2 Subordinated Tier 2 (RHS) 57

  58. Slide 58: Annex – KBC’s covered bond programme: Key cover pool characteristics

    Annex 2 – KBC’s covered bond programme Key cover pool characteristics Investor reports, final terms and prospectus are available on www.kbc.com/covered_bonds Portfolio data as of : 30 June 2019 Total Outstanding Principal Balance 10 094 651 066 Total value of the assets for the over-collateralisatio

  59. Slide 59: Annex – KBC’s covered bond programme: Key cover pool characteristics

    Annex 2 – KBC’s covered bond programme Key cover pool characteristics REPAYMENT TYPE (LINEAR VS. ANNUITY) GEOGRAPHICAL ALLOCATION Brussels Hoofdstedelijk gewest 5% Waals Brabant Linear 1% 3% Oost- Vlaanderen Vlaams 18% Brabant 18% West- Vlaanderen 14% Luxemburg Antwerpen Annuity 0% Henegouwen 29% 97

  60. Slide 60: Annex – KBC’s covered bond programme: Key cover pool characteristics

    Annex 2 – KBC’s covered bond programme Key cover pool characteristics FINAL MATURITY DATE SEASONING 35,00 70,00 30,00 Weighted Average 60,00 Weighted Average Seasoning: 25,00 64 months 50,00 Remaining Maturity: 174 months 20,00 40,00 15,00 30,00 10,00 20,00 5,00 10,00 0,00 0,00 0 - 12 13 - 2425 - 36

  61. Slide 61: Annex – Benchmark issuance KBC covered bonds

    Annex 2 – KBC’s covered bond programme Benchmark 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) Source Bloomberg Mid ASW levels 61

  62. Slide 62: Annex 2: Belgian real estate market

    Annex 2: Belgian real estate market In 2018, price growth fell back to 2.9% yoy, from 3.6% yoy in 2017 62

  63. Slide 63: Annex - Interest rates still historically low

    Annex 2 - Interest rates still historically low 63

  64. Slide 64: Annex - Solvency details

    Annex 3 - Solvency details Fully loaded B3 CET1 based on the Danish Compromise (DC) from 1Q19 to 2Q19 DELTA AT NUMERATOR LEVEL (BN EUR) 15.1 - 0.2 +0.1 0.0 15.0  Fully loaded B3 common equity ratio amounted to 15.6% at end 1H19 based on B3 CET1 at end 1Q19 (DC) Intangibles & goodwill Jan 2012 Divid

  65. Slide 65: Annex - Solvency details: overview of B3 CET1 ratios

    Annex 3 - Solvency details Overview of B3 CET1 ratios at KBC Group Method Numerator Denominator B3 CET1 ratio FICOD*, fully loaded 15,818 109,184 14.5% DC**, fully loaded 15,031 96,389 15.6% DM***, fully loaded 14,070 91,024 15.5% * FICOD: Financial Conglomerate Directive ** DC: Danish Compromise **

  66. Slide 66: Annex - Implementation of the BRRD in Belgium

    Annex 3 - Solvency details Implementation of the BRRD in Belgium 1. The BRRD has been transposed to a large extent by the Act of 25 April 2014 on the legal Hierarchy of Claims in Belgium status and supervision of credit institutions ("The Banking Act") which applies since May-2015, with the exceptio

  67. Slide 67: Annex - What are the risks for HoldCo senior investors?

    Annex 3 - Solvency details What are the risks for HoldCo senior investors? Public Issuance size of loss Senior Unsecured In all scenarios surpassing the Point of Non Tier 2 Viability, the investors are protected by the BRRD capital No Creditor Worse Off principle (“NCWO”), AT1 instruments which stip

  68. Slide 68: Annex – Business unit international markets

    Annex 4 – Business unit international markets Business profile 2Q 2019 Slovakia Hungary Bulgaria Ireland BU Int. Markets Net result (in million euros) 11m 55m 29m 9m 104m Allocated Capital (in billion euros) 0.6bn 0.7bn 0.4bn 0.7bn 2.4bn Loans (in billion euros) 7bn 5bn 3bn 10bn 24bn Deposits (in bi

  69. Slide 69: Annex - Details on credit exposure of Ireland

    Annex 5 - Details on credit exposure of Ireland Impaired loans ratio further improved  The Irish economy started 2019 on a strong footing and while growth is expected to moderate, we now expect GDP to increase by about 5%  Strong gains in employment have led to further falls in unemployment. This,

  70. Slide 70: Glossary (1/2)

    Glossary (1/2) AQR Asset Quality Review B3 Basel III CBI Central Bank of Ireland [technical insurance charges, including the internal cost of settling claims / earned premiums] + [operating expenses / written premiums] (after reinsurance Combined ratio (non-life insurance) in each case) Common equit

  71. Slide 71: Glossary (2/2)

    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 [result after tax, including minority interests, of a business unit, adjusted for income on allocated capital in

  72. Slide 72: Contacts / Questions

    Contacts / Questions Download the KBC IR APP Company website: www.kbc.com 72

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