Slide 1: KBC Group Debt presentation 2Q 2024
1 of 46 KBC Group Debt presentation 2Q 2024 More information: www.kbc.com KBC Group - Investor Relations Office: IR4U@kbc.be
Slide 2: KBC Group passport | Well-defined core markets
KBC Group passport | Well-defined core markets 2 of 46 BELGIUM BU debt to INTERNATIONAL MARKETS BU GDP ratio GDP growth 105% SK HU BG in %, KBC Economics 64% of assets 4% of assets 4% of assets 5% of assets 4.0m clients 0.8m clients 1.6m clients 2.2m clients 432 branches 1.4% 99 branches 195 branche
Slide 3: What differentiates us from peers
What differentiates us from peers 3 of 46 Unique integrated Successful digital-first Firmly embedded Core shareholder bank-insurance+ model approach through KATE sustainability strategy structure • We offer an integrated response • Our Digital interaction with clients • As a company that aims to sup
Slide 4: KBC Group's legal structure and issuer of debt instruments
KBC Group’s legal structure and issuer of debt instruments 4 of 46 KBC Group NV AT 1 Tier 2 MREL Senior 100% 100% 100% 100% KBC Bank KBC Insurance KBC Global Services N.V. DISCAI* Covered bond No public issuance KBC IFIMA** Retail and Wholesale EMTN * DISCAI (Discovering AI) is a separate full
Slide 5: Last credit ratings
Last credit ratings 5 of 46 Moody’s S&P Fitch Senior Unsecured A3 A- A Latest update: Tier II Baa1 BBB BBB+ Moody’s decided on 26 July 2024 to: Group Additional Tier I Baa3 BB+ BBB- • Upgrade KBC Group’s long-term senior unsecured debt and issuer rating to A3 (from Baa1), the subordinate debt rating
Slide 6: KBC's ESG ratings and indices are ahead of the curve
KBC’s ESG ratings and indices are ahead of the curve 6 of 46 Agency ESG rating 3rd of July 2024 Position versus industry average D- A • Leader in addressing climate change • CDP’s A list A • Financial average service B- Severe Risk High Risk Medium Risk Low Risk Negligible Risk • 1st percentile of 2
Slide 7: Business profile | Our financial footprint
Business profile | Our financial footprint 7 of 46 High profitability (IFRS 17 figures) Solid capital position combined CET 1 ratio (fully loaded, Danish compromise) C/I ratio* ratio net result in % 43% FY23 87% FY23 3,402m FY23 16.3% 17.1% 17.6% 1,431m 1H24 15.8% 16.0% 15.5% 15.3% 42% 1H24 15.2% 15
Slide 8: New KBC's non-financial targets (2023-2026)
New KBC’s non-financial targets (2023-2026) 8 of 46 Customer ranking Bank-insurance (BI) clients Digital sales BI clients Digital sales banking products* TARGET in % TARGET in % TARGET Top-3 Top-2 76% 76% 83% 55% 65% 2023 2026 52% • KBC is 3rd in customer NPS (Net Promoter Score) ranking 2023* 1H24
Slide 9: Sustainability highlights
Sustainability highlights 9 of 46 Commitment to environmental action Sustainable business Social responsibility and governance 46bn EUR Responsible Investing Social bond Second progress report published on Issued a second social bond for the 2030 and 2050 climate targets funds in 1H24 or 42% of tota
Slide 10: Excellent net result of 925m EUR over 2Q24
Excellent net result of 925m EUR over 2Q24 10 of 46 Highlights Net result in m EUR • Commercial bank-insurance franchises performed excellently 966 882 925 • As policy rates have peaked, KBC Group is well-positioned 877 being an integrated bank-insurer with tailored AM business One-off 677 • Custome
Slide 11: Higher net interest income
Higher net interest income 11 of 46 Net interest income Net interest margin* in m EUR in %, calculated excluding dealing room, ALM FX swaps & repos 1,407 1,382 1,360 1,369 1,379 1,324 106 96 98 95 110 Insurance 92 Banking 2.04% 2.11% 2.04% 1.99% 2.08% 2.10% 1,232 1,301 1,286 1,261 1,274 1,269 (incl.
Slide 12: Inflow of core customer money
Inflow of core customer money 12 of 46 Customer money dynamic over 2Q24 Customer money dynamic over 1H24 in bn EUR in bn EUR +3.8bn EUR +5.8bn EUR +1.4bn EUR -1.9bn EUR +2.6bn EUR +0.7bn EUR +1.7bn EUR +3.6bn EUR +1.1bn EUR -0.9bn EUR +0.3bn EUR +0.6bn EUR +3.1bn EUR +1.9bn EUR 31MAR24 foreign FX cu
Slide 13: Higher net fee and commission income
Higher net fee and commission income 13 of 46 Net fee & commission income Assets under management in m EUR in bn EUR 600 614 623 258 262 576 584 588 244 12 15 12 Other 10 11 12 217 225 227 Investment 59 61 55 advice 265 261 267 Banking services 42 46 49 262 262 268 68 71 73 Fund-of-Funds 63 65 64 Gr
Slide 14: Non-life sales up y-o-y, life sales down q-o-q and y-o-y
Non-life sales up y-o-y, life sales down q-o-q and y-o-y 14 of 46 Non-life sales Life sales in m EUR in m EUR 765 727 33 32 685 36 620 667 730 577 558 549 623 218 261 47 Hybrid products 477 297 Guaranteed- 31 438 222 Interest 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 32 products • Up by 8% y-o-y, with growth in
Slide 15: FIFV & IFIE result up q-o-q and net other income in line with normal run rate
FIFV & IFIE result up q-o-q and net other income in line with normal run rate 15 of 46 FIFV & IFIE Net other income in m EUR in m EUR 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Dealing room 94 69 47 78 102 61 MVA/CVA/FVA 4 5 17 -41 5 1 498 IFIE – mainly -50 -53 -56 -59 -60 -60 interest accretion M2M ALM derivati
Slide 16: Costs excluding bank & insurance taxes slightly increased q-o-q
Costs excluding bank & insurance taxes slightly increased q-o-q 16 of 46 Operating expenses (including costs directly attributable to Bank and insurance tax spread 2024 (preliminary) insurance) in m EUR in m EUR Total Upfront Spread out over the year 1,648 2Q24 1Q24 2Q24 1Q24 2Q24 3Q24 4Q24 1,582 BE
Slide 17: Excellent credit cost ratio, despite higher net loan loss impairment charges
Excellent credit cost ratio, despite higher net loan loss impairment charges 17 of 46 Other impairments Asset impairment ECL for geopolitical and macroeconomic uncertainties Credit cost ratio in m EUR; negative sign is a release in bps 60 *In FY20, an ECL buffer of 44 bps was added re Impairments on
Slide 18: Loan loss experience at KBC
Loan loss experience at KBC 18 of 46 Credit cost ratio* in %; Credit cost ratio: amount of losses incurred on troubled loans as a % of total average outstanding loan portfolio AVERAGE 1H24 FY23 FY22 FY21 FY20 FY19 FY18 ‘99 –’23 Belgium BU 0.24% 0.06% 0.03% -0.26% 0.57% 0.22% 0.09% n/a Czech Republic
Slide 19: Diversified loan portfolio
Diversified loan portfolio 19 of 46 Total loan portfolio outstanding Total loan portfolio outstanding | by segment as % of total Group loan portfolio outstanding* Total loan portfolio outstanding Corporate 207bn EUR* 37.3% Retail 40.6% Group level Total loan portfolio outstanding | by sector 22.1% a
Slide 20: Loan portfolio breakdown by IFRS 9 ECL stage
Loan portfolio breakdown by IFRS 9 ECL stage 20 of 46 Total loan portfolio outstanding | by IFRS9 ECL Stage* Stage 3 ratio | Belgium BU as % of total Group loan portfolio outstanding in % 19.9% 2.3% 2.2% 2.1% 1.9% 2.0% 17.9% 13.6% 13.0% 11.5% Stage 2 FY20 FY21 FY22 FY23 1H24 3.3% 2.9% 2.1% 2.1% 2.1%
Slide 21: Cover ratios
Cover ratios 21 of 46 Cover ratio | by IFRS9 ECL Stage* Stage 3 cover ratio | Belgium BU in % in % 45.6% 42.6% 47.1% 47.1% 39.6% 38.3% 38.3% 44.7% 44.7% 44.3% Stage 3 FY20 FY21 FY22 FY23 1H24 Stage 3 cover ratio | Czech Republic BU 4.8% in % 2.2% 1.7% 1.4% 1.7% Stage 2 48.7% 49.4% 45.2% 44.7% 44.0%
Slide 22: Solvency, liquidity & funding | Strong capital position with substantial buffer to MDA
Solvency, liquidity & funding I Strong capital position with substantial buffer to MDA 22 of 46 Capital requirements and distance to Maximum Distributable Amount (MDA) restrictions as at 3O June 2024 (fully loaded, B3) in % Regulatory requirement 19.9 KBC Group 3.3 Tier 2 16.6 Fully loaded B3 common
Slide 23: Leverage ratio, Solvency II ratio and liquidity ratios
Leverage ratio, Solvency II ratio and liquidity ratios 23 of 46 Leverage ratio | KBC Group Liquidity ratios | KBC Group Solvency II ratio | KBC Group fully loaded, Basel 3 in % in % Leverage LCR NSFR Solvency II ratio ratio 5.5% 1H24 160% 1H24 139% 1H24 200% 1H24 5.7% FY23 159% FY23 136% FY23 206% F
Slide 24: KBC Group consolidated balance sheet
KBC Group consolidated balance sheet 24 of 46 362bn EUR Total balance sheet Deposits from customers 1H 2024 1H 2024 Total assets Total liabilities and equity by core countries as % of total deposits from customers 31 5 6% Bulgaria 85 31 4% 4% Hungary Slovakia 22% 6 50 16 Czech Republic 23 222 68 63%
Slide 25: Strong customer funding base
Strong customer funding base 25 of 46 • 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 • Stable % in customer funding compared to balan
Slide 26: Upcoming mid-term funding maturities
Upcoming mid-term funding maturities 26 of 46 Total outstanding | 1H24 Recent deals in % • In Nov 2023, KBC Group issued a Senior Holdco benchmark for an amount of KBC Bank has 6 solid sources of long-term funding: (i) Retail term deposits, (ii) 500m EUR with a 6-year maturity callable after 5 years
Slide 27: Above resolution requirements in terms of MREL
Above resolution requirements in terms of MREL 27 of 46 MREL targets MREL actuals • The resolution plan for KBC is based on a Single Point of Entry • The MREL ratio in % of RWA decreased from 33.2% in 1Q24 to 32.1% (SPE) approach at KBC Group level, with bail-in as the in 2Q24, driven mainly by decr
Slide 28: MREL instruments issued at the level of KBC Group and down-streamed
MREL instruments issued at the level of KBC Group and down-streamed to KBC Bank and KBC Insurance 28 of 46 KBC Group Holdco Senior 14 486 Tier 2(2) 4 261 KBC Bank Additional Tier 1 KBC Insurance 1 750 Tier 2 Subordinated loans(1) 14 486 Equity(3) 500 17 177 Participation KBC Group Tier 2(2) 3 263 2
Slide 29: ESG | Direct environmental impact
ESG I Direct environmental impact Our progress in brief 29 of 46 DIRECT environmental footprint (FY 2023) • Since 2015, we have been calculating the GHG emissions arising from our own operations at group More details in our 2023 Sustainability Report level, in accordance with the GHG Protocol Corpor
Slide 30: Indirect environmental impact: our progress in brief
Indirect environmental impact: our progress in brief 30 of 46 INDIRECT environmental footprint (FY 2023) Loan portfolio (selection of sectors) reduction compared to 2021 baseline, otherwise indicated Mortgages and commercial Operational lease Agriculture • We refer to our Collective Commitment to Cl
Slide 31: KBC Green Bond framework and issuances
KBC Green Bond framework and issuances 31 of 46 Aligned with best practices and market Verification developments • One year after issuance and until maturity, a limited assurance report • The KBC Green Bond Framework is in line with the on the allocation of the Green Bond proceeds to Eligible Assets
Slide 32: KBC Social Bond framework and issuances
KBC Social Bond framework and issuances 32 of 46 Aligned with best practices and market Clear Social Bond governance developments Social Bond Eligible Assets include financing in Belgium in the Use following categories: • By adding the social aspect to its funding mix, KBC Bank of • Access to Essent
Slide 33: Covered bond programme | Overview
Covered bond programme | Overview 33 of 46 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 Minimum 105% of covered bond outstanding is cove
Slide 34: Covered bond programme | Belgian legal framework
Covered bond programme | Belgian legal framework 34 of 46 Belgian legal framework • Direct covered bond issuance from a bank’s balance sheet National Bank of • Dual recourse, including recourse to a special estate with cover assets included in a register Belgium • The special estate is not affected
Slide 35: Covered bond programme | Strong legal protection mechanisms
Covered bond programme | Strong legal protection mechanisms 35 of 46 Several legal protection mechanisms are in place: 1 Collateral type The value of one asset category must be at least 85% of the nominal amount of covered bonds KBC Bank exclusively selects residential mortgage loans and commits t
Slide 36: Looking forward | FY24 financial guidance
Looking forward I FY24 financial guidance 36 of 46 Our bank-insurance+ model is firing on all cylinders Note: all growth figures are based on reported 2023 figures 2024 guidance Net interest income 5.5bn EUR ballpark figure FY24 NII guidance increased from 5.3bn-5.5bn EUR to 5.5bn EUR ballpark Organ
Slide 37: Looking forward | FY26 financial guidance
Looking forward I FY26 financial guidance (as provided with FY23 results) 37 of 46 Our bank-insurance+ model is firing on all cylinders Note: all growth figures are based on reported 2023 figures 2026 Net interest income* CAGR23-26 at least +1.8% Insurance revenues (before reinsurance) CAGR23-26 at
Slide 38: Dividend policy, capital deployment plan and Basel IV guidance
Looking forward | Dividend policy, capital deployment plan and Basel IV guidance 38 of 46 Dividend policy and capital deployment plan Basel IV guidance (as provided with FY23 results) • In line with our announced capital deployment plan for FY23, the Board of • Indicative view on transitional risk-w
Slide 39: Annex 1 | Summary of the different business units' performance
Annex 1 | Summary of the different business units’ performance 39 of 46 Czech Slovakia Hungary Bulgaria Group KBC Belgium 1H 2024 Republic Centre Group BU BU BU International Markets BU Net result (YTD, in euros) 1 431m 761m 441m 60m 171m 140m -141m ROAC (YTD) 21% 18% 42% 14% 43% 27% Allocated capit
Slide 40: Annex 2 | Outstanding benchmarks as at end of July 2024
Annex 2 | Outstanding benchmarks as at end of July 2024 40 of 46 Additional tier I securities Issuer Currency Isin Code Issued (in mio) Coupon Re-off spread Settlement date Call date Maturity Trigger Level KBC Group EUR BE0002592708 1,000 4.250% M/S+359.4bps 24/04/2018 24/10/2025 Perpetual Temporary
Slide 41: Annex 3 | KBC's covered bond programme characteristics
Annex 3 | KBC’s covered bond programme characteristics 41 of 46 Portfolio data as of 30 June 2024 Interest rate type Geographical allocation in EUR in % in % Total Outstanding Principal Balance 20 596 151 773 Fixed 87.7% Brussels Total value of the assets for the over-collateralisation 1 y / 1y 4% H
Slide 42: Annex 3 | Key cover pool characteristics
Annex 3 | Key cover pool characteristics 42 of 46 Final maturity date Seasoning (in months) in bn EUR in bn EUR 18.0bn 3.5bn Weighted average Weighted average 3.2bn seasoning remaining maturity 3.0bn 3.0bn 193 months 61 months 2.2bn 1.9bn 1.1bn 1.0bn 1.0bn 0.7bn 2.2bn 0.4bn 2023 - 2027 2028 - 2032 >
Slide 43: Annex 4 | Belgian real estate market – House price dynamics
Annex 4 | Belgian real estate market – House price dynamics 43 of 46 Belgian house price rose by 2.3% for FY23, The overvaluation of Belgian real estate is as against a price drop of 1.1% in the EU estimated at some 6% in Q1 2024 KBC Group passport Business profile Financial performance Solvency, li
Slide 44: Glossary
Glossary B3 / B4 Basel III / Basel IV 44 of 46 Combined ratio (non-life Short-term non-life insurance contracts: [claims and claim related costs net of reinsurance + costs other than claims and commissions] / [earned expected insurance) premiums received, net of reinsurance] Common equity ratio [com
Slide 45: Contacts / questions
Contacts / questions 45 of 46 Kurt De Baenst direct +32 2 429 35 73 More information Investor Relations General Manager mobile +32 472 500 427 kurt.debaenst@kbc.be • Company website KBC • Quarterly Report Ilya Vercammen direct +32 2 429 21 26 Quarterly Reports • Table of results (Excel) Investor Rel
Slide 46: Disclaimer
Disclaimer 46 of 46 • This presentation is provided for information purposes only. It does not constitute an offer to sell or the solicitation to buy any security issued by the KBC Group. • KBC believes that this presentation is reliable, although some information is condensed and therefore incomple