2 0 0 3
KBC Bank & Insurance GroupInterim results at 31 March 2003
KBC Bank & Insurance Group – 1Q 2003
2
2 0 0 31Q at a glance
(in millions of EUR) 1Q 2002
4Q 2002
1Q 2003
ChangeQ/Q
Change Y/Y
Gross operating income 1 621 1 614 1 659 + 3% + 2%
Administrative expenses - 1 039 - 1 079 - 1 063 - 1% + 2%
Operating result 582 535 596 + 11% + 2%
Loan loss provisions
Value adjustments securities
Other, non-recurring and extraordinary results
- 88
8
- 2
- 160
- 36
- 50
- 79
- 220
+ 155
Profit before tax 504 389 452 + 16% - 10%
Taxes - 135 - 66 - 106
Minority interests - 52 - 36 - 42
Net profit 316 287 304 + 6% - 4%
KBC Bank & Insurance Group – 1Q 2003
3
2 0 0 3Key points
1. Success of capital guaranteed funds, generating strong commission and premium income
2. Cost-saving programmes on track
On balance, operating income up 5% y/yin organic terms, notwithstanding adverse financial climate
3. Favourable levels of loan provisions and claims incurred (probably a somewhat ‘exceptional’ situation)
4. Renewed ability to protect results from poor market climate, thanks to use of ‘buffers’
5. Solvency solid as a rock
2 0 0 3
Highlights in thebanking business
KBC Bank & Insurance Group – 1Q 2003
5
2 0 0 3Banking: income
Net interest income suffering from lower market rates
Robust commission income
Trading figure down (trade-off with interest income)
Considerable gains on bonds
1Q 2003
14%
13%61%
Other121 m
Capitalgains123 m
Trading146 m
3%
Interest718 m
Commissions344 m
KBC Bank & Insurance Group – 1Q 2003
6
2 0 0 3Cost/income ratio
Merger effects in Belgium
1999 2000 2001 2002 2003 2004 2005
Expenses up 1% y/y, down 4% q/q, thanks in part to merger-related savings
in Belgium
1Q 03C/I 64%
target achieved
Branchclosures
ICT integration
Headcountreduction
- 650
All
- 1 650
85%
98%
72%
time frame
KBC Bank & Insurance Group – 1Q 2003
7
2 0 0 3Provisioning for credit risks
0
20
40
60
80
100
120
140
160
4Q 01 1Q 02 2Q 02 3Q 02 4Q 02 1Q 03
Quarter 4Q moving avg
in m EUR
1Q 03Loan loss ratio:
0.30%
Low loan loss provisions but uncertainty about quarters ahead
KBC Bank & Insurance Group – 1Q 2003
8
2 0 0 3Value impairments on equity portfolio
bonds
sharesfinancial
fixed assets
Investment portfolio - banking
1 122 530
39 433
P&L : value impairments (74 m EUR) mitigated by capital gains on bonds
(carrying value in millions of EUR, at 31 March 2003)
KBC Bank & Insurance Group – 1Q 2003
9
2 0 0 3Solvency: banking
Stable at a high level : 9.1%
3 675 m
3 675 m
1 008 m
4.0%
8.0%
9.1% Surplus zone
Comfort zone
Legal minimum
2 0 0 3
Highlights in theinsurance business
KBC Bank & Insurance Group – 1Q 2003
11
2 0 0 3Insurance: premium income
Very strong performance fromlife business : Near 1Q02 peak level (-3%)
56% in unit-linked products
Non-life: 9% up organically
1Q 2003
Non-Life
14%6%
11%
Unit-linked
Interest-guaranteed life
KBC Bank & Insurance Group – 1Q 2003
12
2 0 0 3Combined ratio: non-life
59%
33%
72%
30%
57%
35%
58%
35%
82%
39%
61%
30%
0%10%20%30%40%50%60%70%80%90%
100%110%120%130%
4Q01 1Q02 2Q02 3Q02 4Q02 1Q03
ExpensesClaims
Combined ratio
excl. reinsurance
Strong technical result, especially in Belgium
KBC Bank & Insurance Group – 1Q 2003
13
2 0 0 3Value impairments on equity portfolio
other
shares
bonds
Investment portfolio - insurance
2 941
748
6 191
P&L : impairments (146 m EUR) mitigated by non-recurring items (capital gains on bonds, write-back from equalization provision, deferred tax assets)
(carrying value in millions of EUR, at 31 March 2003) excl. unit-linked products
KBC Bank & Insurance Group – 1Q 2003
14
2 0 0 3Solvency: insurance
516 m
516 m
370 m Surplus zone
Comfort zone
Legal minimum
200%
272%
100%
Still very solid : 272%
2 0 0 3
Overview - areas of activity
KBC Bank & Insurance Group – 1Q 2003
16
2 0 0 3Areas of activity
Profitcontribution (*) % y/y % q/q ROE
Retail (Belgium) 117m 43% 25% 17%
Central Europe 19m 62% 140% 5%
Asset management 32m 2% 18% -
Corporate 46m 14% 36% 9%
Market activities 42m 21% 466% 14%
(*) excl. minority interests
2 0 0 3
Additional information
KBC Bank & Insurance Group – 1Q 2003
18
2 0 0 3Key ratios
(in millions of EUR) 31 Mar 02 31 Dec 02 31 Mar 03
EPS 1.05 0.95 1.01
NAV/share 35.0 31.6 31.9
Cost/income banking
Combined insurance*
Tier 1 banking
Solvency insurance
65.4%
101.9%
9.0%
488%
65.2%
101.4%
8.8%
320%
64.0%
90.7%
9.1%
272%
ROE 15.9% 12.7% 14.3%
CAGR EPS - 12% +1% - 4%
* excluding reinsurance
KBC Bank & Insurance Group – 1Q 2003
19
2 0 0 3Consolidation effectsTop-line impact
ČSOBPojišt'ovna
NLB Bank
Full consolidation
Equitymethod
2 %
< 0.5 %
< 0.5%
1%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2002 2003
ERGOPoisťovňa
Krefima
Full consolidation
Deconsolidation(from full consolidation)
KBC Bank & Insurance Group – 1Q 2003
20
2 0 0 3Unrealized capitall gains
In m EUR 31 Dec 02 31 Mar 03 30 Apr 03
Group Total 1 824 1 558 1 795
Bonds 2 127 2 042 2 022
Shares - 430 - 601 - 344
Other 128 118 117
Banking Total 1 742 1 711 1 680
Bonds 1 630 1 628 1 589
Shares 86 63 71
FFA 27 20 20
Insurance Total 82 - 153 115
Bonds 497 414 433
Shares - 516 - 664 - 415
RE and other
101 98 97
2 0 0 3
KBC Bank & Insurance GroupMore information:
IR OfficeE-mail: [email protected]
Tel.: +32 2 429 49 16
Press OfficeE-mail: [email protected]
Tel.: +32 2 429 85 45