1

KBC GroupCompany presentation2Q 2016

KBC Group - Investor Relations Office – E-mail:

More information: www.kbc.com

investor.relations@kbc.com

2

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

KBC believes that this presentation is reliable, although some information is condensed and therefore incomplete. KBC cannot beheld liable for any loss or damage resulting from the use of the information.

This presentation contains non-IFRS information and forward-looking statements with respect to the strategy, earnings and capitaltrends of KBC, involving numerous assumptions and uncertainties. There is a risk that these statements may not be fulfilled andthat future developments differ materially. Moreover, KBC does not undertake any obligation to update the presentation in linewith new developments.

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

Important information for investors

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2Q 2016 key takeaways for KBC Group

STRONG BUSINESS PERFORMANCE IN 2Q16Exceptionally good net result of 721m EUR in 2Q16 (and 1.11bn EUR in 1H16), as a result of:o Strong commercial bank-insurance franchises in our core markets and core activitieso Q-o-q increase in customer loan and deposit volumes in most of our core countrieso Slightly higher net interest income despite somewhat lower net interest margin q-o-qo Higher net fee and commission income q-o-q (in line with guidance), despite net asset management outflowso Higher net gains from financial instruments at fair value, higher realised AFS gains (mainly on Visa) and lower net other income o Combined ratio of 95% YTD. Excellent sales of both non-life and life insurance productso Good cost management resulted in a cost/income ratio of 56% YTD adjusted for specific items o Low impairment charges. Net loan provision release of 1m EUR in 2Q16 in Ireland. We are lowering our impairment guidance for Ireland

towards a 0m-40m EUR range for FY16

SOLID CAPITAL AND ROBUST LIQUIDITY POSITIONSo Common equity ratio (B3 phased-in) of 14.9% based on the Danish Compromise at end 1H16, which clearly exceeds the new minimum

capital requirements set by the ECB (9.75%) and the NBB (0.5%), i.e. an aggregate 10.25% for 2016. The B3 fully loaded common equityratio stood at 14.9% based on the Danish Compromise at end 1H16

o KBC remains adequately capitalised under 2016 EU-wide EBA stress testo Fully loaded B3 leverage ratio, based on current CRR legislation, amounted to 6.0% at KBC Groupo Continued strong liquidity position (NSFR at 123% and LCR at 132%) at end 1H16o Interim dividend:o KBC will pay an interim dividend of 1 EUR per share in November 2016, as an advance payment on the total dividend.o This is the start of an interim dividend policy whereby KBC aims to pay each year an interim dividend of 1 EUR per share*

o The current pay-out ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit is confirmed

* More details on slide 55

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Contents

1

4

Strong solvency and solid liquidity

2Q 2016 wrap up

Annex 1: Company profile

2

2Q 2016 performance of KBC Group

3

2Q 2016 performance of business units

Annex 2: Other items

5

KBC Group

Section 1

2Q 2016 performance of KBC Group

6

Net result at KBC Group

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

CONTRIBUTION OF BANKING ACTIVITIES TO KBC GROUP NET RESULT*

721

392

600666

510

441

1Q15 2Q161Q164Q15

862

765

-344

3Q152Q15

NET RESULT AT KBC GROUP*

644

358

524564

412

448

4Q15

903

765

-310

3Q152Q151Q15 2Q161Q16

-41

8959 48 44

73

6250 44

31

-21-19 -30

27

83

2233

-34

3Q15

79

2Q15

121

1

1Q15

121

2Q16

75

1Q16

48

-9

4Q15

CONTRIBUTION OF INSURANCE ACTIVITIES TO KBC GROUP NET RESULT*

Amounts in m EUR

Impact KBC FH Net resultGW impairments

GW impairments Impact KBC FH Net result

GW impairmentsLife result

Non-Life result Non-technical & taxes

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Slightly higher net interest income and slightly lower net interest margin

Net interest income• Slightly up q-o-q and down by 2% y-o-y• The slight q-o-q increase was driven primarily by:

o lower funding costso additional rate cuts on savings accountso higher upfront prepayment feeso continued good volume growth in current accounts and loanso further positive effect of enhanced ALM managementalmost fully offset by:o lower reinvestment yieldso hedging losses on previously refinanced mortgageso pressure on commercial loan margins in most core countrieso a decrease of 9m EUR in NII from the dealing room

Net interest margin (1.94%)• Down by 2 bps q-o-q and by 12 bps y-o-y• Q-o-q decrease is due to lower reinvestment yields, pressure on

commercial loan margins in most core countries and hedging losses onpreviously refinanced mortgages partly offset by rate cuts on savingsaccounts and lower funding costs

NIM

NII

906 898 903900 888

156154162

914

15415716381022 1

4Q15

1,0664

3Q15

1,062

-2

19

2Q15

1,092

2

1Q15

1,091

-3

31

2Q16

1,0702

-1

1Q16

1,067

2Q16

1.94%

1Q16

1.96%

4Q15

1.95%

3Q15

1.99%

2Q15

2.06%

1Q15

2.10%

Amounts in m EUR

NII - Banking

NII - Insurance

NII - Holding-company/group

NII - dealing room

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

VOLUME TRENDExcluding FX effect Total loans ** Of which mortgages Customer deposits*** AuM Life reserves

Volume 131bn 56bn 171bn 207bn 28bn

Growth q-o-q* +1% +1% +4% 0% 0%

Growth y-o-y +4% +4% +6% +2% 0%

Customer deposit volumes excluding debtcertificates & repos +3% q-o-q and +4% y-o-y

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Higher net fee and commission income (in line with guidance)

Net fee and commission income• Up by 4% q-o-q and down by 23% y-o-y

• Q-o-q increase was the result chiefly of:o higher management fees from mutual funds & unit-

linked life insurance products (thanks to reset date CPPI)o higher fees from credit files and bank guarantees (due to

more mortgage refinancings in BE, CZ and Slovakia)o higher fees from payment services in the Czech Republic

and Hungaryo lower commissions paid on insurance salespartly offset by:o lower entry fees from mutual funds & unit-linked life

insurance productso lower securities related fees in Belgium

• Y-o-y decline resulted chiefly in the Belgium Business Unitfrom lower management and entry fees from mutual fundsand unit-linked life insurance products, lower fees fromsecurities transactions, lower fees from credit files and bankguarantees and higher commissions paid on insurance sales

• Net F&C income will remain an important top-linecontributor going forward

Assets under management (207bn EUR)• Flat q-o-q as a result of net outflows (-1%) and a positive

price effect (+1%)

• Rose by 2% y-o-y owing to net inflows (+2%) anda negative price effect (-1%)

F&C

Amounts in m EUR

518 530453 445 422

-76-70-69-64-59 -71

432

360

-1

1Q16

346

4Q15

371

-4

3Q15

383

-1

2Q15

465

-1

1Q15

459

2Q16

F&C - contribution of holding-company/group

F&C - banking contribution

F&C - insurance contribution

Amounts in bn EUR

AuM

207207209200204208

3Q152Q151Q15 2Q161Q164Q15

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Insurance premium income (gross earned premium) at 751m EUR• Non-life premium income (349m) increased by 7%

y-o-y

• Life premium income (402m) down by 6% q-o-q(due mainly to lower unit-linked single premiums inthe Czech Republic) and up by 51% y-o-y (drivenby significantly higher sales of guaranteed interestproducts in Belgium and higher sales of unit-linkedproducts in the Czech Republic)

The non-life combined ratio at 1H16 amountedto 95% due to higher technical charges in 2Q16,mainly caused by the impact of storms & floods(24m claims in Belgium and 2m claims in theCzech Republic)

Amounts in m EUR

Insurance premium income slightly down, claims significantly impacted by natural perils

COMBINED RATIO (NON-LIFE)

PREMIUM INCOME (GROSS EARNED PREMIUM)

89%95%

86%91%

1Q

91%

FY1H

82%

9M

2015 2016

320 326 335 338 341

302 265 289445 426

349

402

1Q16

751

2Q16

767

622

3Q151Q15

591

2Q15

783

4Q15

624

Non-Life premium incomeLife premium income

10

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

Sales of non-life insurance products• Up by 7% y-o-y thanks to a good commercial

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

Sales of life insurance products• Decreased by 7% q-o-q and increased by 33% y-o-y

• The q-o-q decrease was driven almost entirely bylower sales of unit-linked products (due to commercialefforts in Belgium in 1Q16). The sales of guaranteedinterest products more or less stabilised q-o-q thanksto sales efforts

• The y-o-y increase can be explained mainly bysignificantly higher sales of guaranteed interestproducts in Belgium and higher sales of unit-linkedproducts in the Czech Republic

• Sales of unit-linked products accounted for 36% oftotal life insurance sales

LIFE SALES

NON-LIFE SALES (GROSS WRITTEN PREMIUM)

189 181 170 182 235

275231 212

353353

197

349

1Q16 2Q164Q15

535

3Q15

382

2Q15

412

1Q15

464

587546

Unit-linked productsGuaranteed interest products

Amounts in m EUR

336

445

302308314

418

2Q161Q164Q153Q152Q151Q15

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Higher FV gains and gains realised on AFS assets, slightly lower other net income

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

adjustments (mainly as a result of model changes)

• slightly better dealing room income

partly offset by:

• a negative change in ALM derivatives (13m EUR in2Q16 compared with 20m EUR in 1Q16) due to afurther decrease q-o-q in IRS rates

Higher gains realised on AFS assets (q-o-qincrease entirely on shares), mainly on:• Visa Europe Limited as a result of the public offer of

Visa Inc. (99m EUR pre-tax and 84m EUR post-tax)

• 25m AFS gains as a result of the reduction of theequity portfolio at KBC Insurance

Other net income amounted to 47m EUR,roughly in line with the normal run rate ofaround 50m EUR

FV GAINS

Amounts in m EUR

89

76 73

-156

904560

141

4Q15

2012

1Q16

93

2Q15

47

3Q15 2Q16

2

154179

1Q15

57

-3 13

128

273044

36

80

1Q15 2Q161Q164Q153Q152Q15

GAINS REALISED ON AFS ASSETS

475147

96105

49

2Q162Q15 4Q15 1Q161Q15 3Q15

OTHER NET INCOME

Other FV gains Liquidation KBC FHM2M ALM derivatives

-68

12

Operating expenses down, due entirely to lower bank taxes

Cost/income ratio (banking) adjusted for specificitems* at 56% in 2Q16 and YTD• Operating expenses excluding bank tax stabilised q-o-q

as higher marketing expenses were offset by lower staffexpenses

• Operating expenses without bank tax decreased by 1%y-o-y due mainly to lower staff expenses, lowerheadquarter costs and lower costs at companies in run-down, despite higher ICT expenses

• Pursuant to IFRIC 21, certain levies (such ascontributions to the European Single Resolution Fund)have to be recognised in advance, and this adverselyimpacted the results for 1Q16. In 2Q16, the Belgiangovernment replaced the 4 existing taxes by 1, whichled to 38m EUR additional bank taxes in Belgium, partlyoffset by the ability to book 6m EUR of the ESRFcontribution as a non-P&L item

• Total bank taxes (including ESRF contribution) areexpected to increase from 417m EUR in FY15 to 440mEUR in FY16

OPERATING EXPENSES

264

8349

335

51

1,125

861 853

1Q16

1,186

851

4Q15

962

914

3Q15

862

841

21

2Q15

941

858

1Q15 2Q16

904

Operating expensesBank tax

* See glossary (slide 84) for the exact definition

Amounts in m EUR

TOTAL Upfront Spread out over the year

2Q16 1Q16 2Q16 1Q16 2Q16 3Q16e 4Q16e

BU BE 32 241 32 0 0 0 0

BU CZ -1 28 -1 0 0 0 0

Hungary 19 31 0 17 19 20 25

Slovakia 1 6 -2 3 3 3 3

Bulgaria 2 1 1 0 1 0 0

Ireland 1 2 0 1 1 1 2

GC -3 5 -3 0 0 0 0

TOTAL 51 314 27 22 24 23 30

EXPECTED BANK TAX SPREAD

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Overview of bank taxes*

INTERNATIONAL MARKETS BUCZECH REPUBLIC BU

BELGIUM BUKBC GROUP

71

26

502325

23

11

8

1Q15

79

2Q161Q16

61

4Q15

282

3Q152Q15

22

-1

Common bank taxesESRF contribution

118

18449

130

57

42

38

2Q161Q16

241

4Q153Q152Q151Q15

160

-6

32

Common bank taxesESRF contribution

9

-12

11

9

22

6

710

-1

3Q15

28

4Q15 2Q161Q16

-3

2Q151Q15

20

ESRF contribution Common bank taxes

202243

62

92

34

-12

83

3259

2Q151Q15

264

15

3Q15

21

4Q15

49

-8

1Q16

51

2Q16

335

European Single Resolution Fund contribution

Common bank taxes

* This refers solely to the bank taxes recognised in opex, and as such it does not take account of income tax expenses, non-recoverable VAT, etc.** The C/I ratio adjusted for specific items of 56% in 1H16 amounts to roughly 50% excluding these bank taxes

Bank taxes of 386m EUR YTD. On a pro rata basis, bank taxes represented10.5% of 1H16 opex at KBC Group**

Bank taxes of 273m EUR YTD. On a pro rata basis, bank taxes represented 10.1% of 1H16 opex at the Belgium BU

Bank taxes of 27m EUR YTD. On a pro rata basis, bank taxes represented 4.3% of 1H16 opex at the CR BU

Bank taxes of 83m EUR YTD. On a pro rata basis, bank taxes represented 18.1% of 1H16 opex at the IM BU

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Low asset impairments, excellent credit cost ratio and decreased impaired loans ratio

Higher impairment charges q-o-q from theunsustainable low level in 1Q16• In 2Q16, a parameter adjustment was made to the IBNR-

models. This resulted in a increase of impairments by roughly25m EUR (of which 18m EUR in the Belgium BU, 6m in the CzechBU and 1m in Bulgaria)

• The q-o-q increase in loan loss provisions was attributablemainly to:o a 25m EUR increase due to IBNR parameter changeso lower reversalsdespite:o low gross impairments in all segments in Belgium and the

Czech Republic

• Impairment ofo 20m EUR on AFS shares (entirely in Belgium)

The credit cost ratio only amounted to 0.07% in 1H16due to low gross impairments and some releases

The impaired loans ratio dropped further to 7.8%

ASSET IMPAIRMENT

73

138

7834 50

21

25

50

2Q16

71

1Q16

28

4

4Q15

472

344

3Q15

4915

2Q15

14911

1Q15

774

IMPAIRED LOANS RATIO

2Q16

7.8%

4.4%

1Q16

8.2%

4.7%

4Q15

8.6%

4.8%

3Q15

9.0%

5.2%

2Q15

9.3%

5.3%

1Q15

9.6%

5.5%

CREDIT COST RATIO

1H16

0.07%

FY15

0.23%

FY14

0.42%

FY13

1.21%

FY12

0.71%

FY11

0.82%

FY10

0.91%

FY09

1.11%

of which over 90 days past dueImpaired loan ratio

Impairments on L&ROther impairmentsGW impairments

15

KBC Group

Section 2

2Q 2016 performance of business units

16

BELGIUM BUSINESS UNIT

CFO SERVICES

CRO SERVICES

CORPORATE STAFF

BELGIUMCZECH

REPUBLICINTERNATIONAL

MARKETS

17

Belgium BU (1): net result of 371m EUR

Net result at the Belgium Business Unitamounted to 371m EUR• The quarter under review was characterised by

slightly lower net interest income, an increase in netfee and commission income, higher dividend income,increased trading and fair value income, an increasein realised gains on AFS assets (of which 20m pre-taxon Visa), lower other net income, a combined ratioimpacted by floods, lower sales of life insuranceproducts, lower operating expenses due entirely tolower bank taxes and higher impairment chargesq-o-q

• Loan volumes rose by 1% q-o-q. Customer depositsincreased by 5% q-o-q

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

VOLUME TREND

Total loans ** Of which mortgages Customer deposits*** AuM Life reserves

Volume 90bn 34bn 120bn 193bn 27bn

Growth q-o-q* +1% +1% +5% 0% 0%

Growth y-o-y +4% +3% +6% +2% -1%

371

209

348358

528

330

4Q153Q15 1Q16 2Q161Q15 2Q15

NET RESULT

Amounts in m EUR

Customer deposit volumes excluding debtcertificates & repos +2% q-o-q and +1% y-o-y

18

Belgium BU (2): slightly lower NII and NIM

Net interest income (682m EUR)• Down by 1% q-o-q and by 5% y-o-y

• Group Re was shifted from the Belgium Business Unit to GroupCentre as of 2016 (NII amounted to 4m EUR in 2Q15)

• Q-o-q decrease was driven primarily by reduced net interestincome from the dealing room, lower reinvestment yields,hedging losses on previously refinanced mortgages and lowernew commercial loan margins (except for corporates), onlypartly offset by higher upfront prepayment fees (17m EUR in2Q16 compared with 10m EUR in 1Q16), lower funding costson term deposits, the effect of an additional rate cut on savingsaccounts and continued good volume growth in currentaccounts & loans

• Decreased y-o-y as sharply lower funding costs on termdeposits, increase in volumes on current and savings accountsand higher net interest income on lending activities were morethan offset by lower reinvestment yields, lower prepaymentfees (17m EUR in 2Q16 compared with 25m EUR in 2Q15),increased hedging losses on previously refinanced mortgagesand lower net interest income from the dealing room

• Customer deposits excluding debt certificates and reposincreased by 1% y-o-y, while customer loans rose by 4% y-o-y

Net interest margin (1.84%)• Decreased by 2 bps q-o-q

• Decreased by 12 bps y-o-y due to the negative impact of lowerreinvestment yields, increased hedging losses on refinancedmortgages and some pressure on commercial loan margins

• KBC lowered the savings account rate by 4 bps (base rate) from15 bps to the legal limit of 11 bps from 16 April 2016 onwards

NIM

NII

Amounts in m EUR

540 549 531 534 536

151 152 147 145 145

541

141

714

1Q15

19720

23

2Q161Q16

6826887

4Q15

69112

3Q15

69416

2Q15

1.85%

1Q16

1.84%

1Q15

1.96%1.86% 1.86%

2Q15 3Q15 4Q15 2Q16

1.96%

NII - dealing room income

NII - contribution of insurance

NII - contribution of banking

19

Credit margins in Belgium

PRODUCT SPREAD ON CUSTOMER LOAN BOOK, OUTSTANDING

PRODUCT SPREAD ON NEW PRODUCTION

1.2

1.0

0.8

0.6

0.4

0.2

0.0

1.4

4Q133Q132Q131Q134Q123Q122Q121Q124Q113Q112Q111Q11 2Q161Q164Q153Q152Q151Q154Q143Q142Q141Q14

Customer loans

0.6

1.8

1.2

1.4

1.6

0.8

0.2

1.0

0.4

2Q161Q164Q153Q152Q152Q121Q124Q113Q112Q111Q11 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q151Q134Q123Q12 2Q13

SME and corporate loans Mortgage loans

20

Belgium BU (3): higher net F&C income

Net fee and commission income (264m EUR)• Increased by 4% q-o-q, due mainly to the combination

of higher management fees from mutual funds andunit-linked life insurance products (shift out of cashtowards equity and fixed income in CPPI products, forinstance), higher fees from credit files & bankguarantees and lower commissions paid on insurancesales, which were only partly offset by lower entryfees from mutual funds and unit-linked life insuranceproducts, lower fees from payment transactions &other banking services and lower securities relatedfees

• Fell by 27% y-o-y driven chiefly by lower managementand entry fees from mutual funds and unit-linked lifeinsurance products, lower fees from securitiestransactions, lower fees from credit files & bankguarantees and higher commissions paid on insurancesales, despite higher fees from payment transactions

Assets under management (193bn EUR)• Stabilised q-o-q owing to small net outflows and a

small positive price effect

• Went up by 2% y-o-y as a result of net inflows (+3%)and a negative price effect (-1%)

AuM*

F&C

Amounts in bn EUR

400 406

335 318 307

-52-48-48-43-40 -47

312

1Q16

255

4Q15

270

3Q15

287

2Q15

363

1Q15

360

2Q16

264

193192194185189193

2Q161Q164Q153Q152Q151Q15

Amounts in m EUR

* The breakdown across the BUs is based on the ‘Assets under Distribution’ in each BU

F&C - contribution of bankingF&C - contribution of insurance

21

Sales of non-life insurance products• Increased by 5% y-o-y driven by premium growth in

‘motor casco’, ‘property’ and ‘General Third PartyLiabilities’ and some tariff increases

Combined ratio amounted to 96% in 1H16 (90%in FY15) due to higher technical charges in 2Q16,mainly caused by the impact of floods (24m EURclaims in 2Q16)

Belgium BU (4): higher y-o-y non-life sales, combinedratio impacted by floods

COMBINED RATIO (NON-LIFE)

79%

1Q

92%

1H

84%90%87%

9M FY

96%

2015 2016

NON-LIFE SALES (GROSS WRITTEN PREMIUM)

249

314

211222238

328

1Q16 2Q164Q153Q152Q151Q15

22

Belgium BU (5): lower life sales, but good cross-sellingratios

Sales of life insurance products• Fell by 6% q-o-q, driven mainly by lower sales of unit-

linked products due to commercial efforts in 1Q16.The sales of guaranteed interest products slightlydecreased q-o-q as the guaranteed interest waslowered during the course of 2Q16

• Increased by 35% y-o-y driven mainly by significantlyhigher sales of guaranteed interest products

• As a result, guaranteed interest products and unit-linked products accounted for 70% and 30%,respectively, of life insurance sales in 2Q16

Mortgage-related cross-selling ratios• 87.7% for fire insurance

• 77.3% for life insurance

LIFE SALES

Amounts in m EUR

149 13885 82

163

248205

184

327

327

140

322

462

2Q16

343

2Q15

269

3Q15

409

4Q15

490

1Q16

397

1Q15

Unit-linked productsGuaranteed interest products

MORTGAGE-RELATED CROSS-SELLING RATIOS

87.7%

77.3%

49.5%

63.7%

40

45

50

55

60

65

70

75

80

85

90

Fire insurance Life insurance

23

The higher q-o-q figures for net gains fromfinancial instruments at fair value were theresult mainly of:• a positive q-o-q change in market, credit and fair

value adjustments (mainly as a result of modelchanges)

• better dealing room income (especially FX options)

• a positive q-o-q change in ALM derivatives (9mEUR in 2Q16 compared with 3m EUR in 1Q16) dueto the positive time value, despite a furtherdecrease q-o-q in IRS rates

Gains realised on AFS assets came to 49mEUR (less gains realised on bonds more thanoffset by more gains realised on shares in2Q16 compared with 1Q16), of which 20mEUR on Visa Europe Limited

Other net income amounted to 44m EUR in2Q16, roughly in line with the normal run rate

FV GAINS

Amounts in m EUR

91

45

38

-31-10

1717

57

9

66

-1

2Q15

7

136

1Q15 1Q16

13

2Q16

51

4Q153Q15

20

-32

3

49

2326

3338

52

1Q16 2Q163Q15 4Q151Q15 2Q15

GAINS REALISED ON AFS ASSETS

444641

55

67

45

3Q152Q15 4Q15 2Q161Q15 1Q16

OTHER NET INCOME

Belgium BU (6): higher FV gains, higher gains realised on AFS assets, but slightly lower other net income

M2M ALM derivativesOther FV gains

24

Belgium BU (7): lower operating expenses, higherimpairments, excellent credit cost ratio

Operating expenses: -26% q-o-q and -2% y-o-y• The q-o-q and y-o-y decrease was attributable entirely to

lower bank taxes

• Pursuant to IFRIC 21, certain levies (such as contributionsto the European Single Resolution Fund) have to berecognised in advance, and this adversely impacted theresults for 1Q16. In 2Q16, the Belgian governmentreplaced the 4 existing taxes by 1, which led to 38m EURadditional bank taxes in Belgium, partly offset by the abilityto book 6m EUR of the ESRF contribution as a non-P&Litem

• Operating expenses without bank tax rose by 2% q-o-qmainly due to higher ICT, marketing and facilitiesexpenses, despite lower staff expenses

• Cost/income ratio: 50% in 2Q16 and 62% YTD, distortedpartly by the bank taxes. Adjusted for specific items, theC/I ratio amounted to roughly 55% in 2Q16 and 56% in1H16

Loan loss provisions amounted to only 28m EUR in2Q16. The q-o-q increase was due largely to 18mimpairments as a result of IBNR parameter changes.Gross impairments remained low in all segments.Credit cost ratio amounted to 7 bps in 1H16 (19 bpsin FY15)

Impaired loans ratio dropped to 3.6%, 2.0% of whichover 90 days past due

Impairment on AFS shares (20m EUR)

ASSET IMPAIRMENT

OPERATING EXPENSES

Amounts in m EUR

535 534 540 541 533 541

241160 554

4Q15

774

573

1Q16 2Q16

32540

3Q15

130

2Q151Q15

695

584

49

48

30

52

28

77

65

4Q15 2Q161Q162Q151Q15 3Q15

Bank tax Operating expenses

25

Net result at the Belgium BU

* Difference between net profit at the Belgium Business Unit and the sum of the banking and insurance contribution is accounted for by the rounding up or down of figures

CONTRIBUTION OF BANKING ACTIVITIES TO NET RESULT OF THE BELGIUM BU *

NET RESULT AT THE BELGIUM BU *

Amounts in m EUR

371

209

348358

528

330

2Q161Q164Q153Q152Q151Q15

303

176

288300

429

212

2Q161Q164Q153Q152Q151Q15

8049 37 38

62

50

33 24

19

-15-12-25

19

74

2Q16

678

1Q16

33

-5

4Q15

60

-2

3Q15

58

2Q15

99

0

1Q15

117

Non-Life result Life result Non-technical & taxes

CONTRIBUTION OF INSURANCE ACTIVITIES TO NET RESULT OF THE BELGIUM BU *

26

CZECH REPUBLIC BUSINESS UNIT

CFO SERVICES

CRO SERVICES

CORPORATE STAFF

BELGIUMCZECH

REPUBLICINTERNATIONAL

MARKETS

27

Czech Republic BU (1): net result of 191m EUR

Net result at the Czech Republic Business Unit of191m EUR• Q-o-q results were characterised by stable net interest

income, higher net fee and commission income,higher net results from financial instruments, anincrease in realised gains on AFS assets (48m EUR onVisa), a combined ratio impacted by storms and alarge fire claim, lower sales of life insurance products,lower costs (due entirely to lower bank taxes) andhigher, but still low impairment charges

• Profit contribution from the insurance businessremained limited in comparison to the bankingbusiness

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

VOLUME TREND

Excluding FX effect Total loans ** Of which mortgages Customer deposits*** AuM Life reserves

Volume 19bn 9bn 25bn 8.6bn 1.0bn

Growth q-o-q* +2% +3% +3% -1% -1%

Growth y-o-y +10% +11% +9% +3% +3%

NET RESULT

Amounts in m EUR

191

129119

153

127

143

2Q151Q15 1Q163Q15 2Q164Q15

28

Czech Republic BU (2): stable NII and slightly lower NIM

Net interest income (210m EUR)• More or less flat q-o-q and up by 1% y-o-y to 210m

EUR. Corrected for FX effects, NII stabilised q-o-q andy-o-y pro forma

• The pro forma q-o-q stabilisation was the resultprimarily of growth in loan volumes, a reduction of theaverage offered rate on savings accounts and slightlyhigher lending margins in Corporates & SME, whichwere fully offset by lower reinvestment yields andpressure on lending margins in mortgages andconsumer finance

• Loan volumes up by 10% y-o-y, driven mainly by growthin mortgages and corporate loans and, to a lesserextent, in SME loans

• Customer deposit volumes up by 9% y-o-y

Net interest margin (2.91%)• Fell by 9 bps both q-o-q and y-o-y to 2.91%

• The q-o-q decrease was attributable mainly to a lowerreinvestment yield and pressure on lending margins inmortgages and consumer finance, despite another cutin interest rates on savings deposits and slightly higherlending margins in Corporates & SME

• The y-o-y decrease was the result of a lowerreinvestment yield and pressure on lending margins(although to a lesser extent in 2Q16), partially offset byseveral cuts in interest rates on savings accounts

NIM

NII

Amounts in m EUR

210211210215208212

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

1Q16

2.91%

4Q15

2.95%

3Q15

3.01%

2Q15

3.00%

1Q15

3.16%3.00%

2Q16

29

Czech Republic BU (3): higher net F&C income

Net fee and commission income (49m EUR)• Increased by 8% q-o-q and decreased by 2% y-o-y (or

+8% q-o-q and -4% y-o-y pro forma, adjusted to takeaccount of FX effect)

• The pro forma q-o-q increase was the result of higherfees from payment services, higher fees from creditfiles and bank guarantees, higher management feesand slightly higher entry fees, partly offset by slightlylower fees from securities

• The pro forma y-o-y decrease was attributable chieflyto lower entry fees from mutual funds and lowersecurity related fees

Assets under management (8.6bn EUR)• Went down by 1% q-o-q to roughly 8.6bn EUR, as a

result of a 4% decrease in net inflows and a positiveprice effect (+2%)

• Y-o-y, assets under management rose by 3%, drivenby net outflows (-2.1%) and a positive price effect(+5.5%)

AuM*

F&C

Amounts in bn EUR

Amounts in m EUR

4946

52495050

2Q161Q164Q153Q152Q151Q15

8.68.7

2Q161Q164Q15

8.8

3Q15

8.5

2Q15

8.3

1Q15

8.2

* The breakdown across the BUs is based on the ‘Assets under Distribution’ in each BU

30

Czech Republic BU (4): lower premium income, combined ratio impacted by storms and a large fire claim

Insurance premium income (gross earnedpremium) stood at 97m EUR• Non-life premium income (46m) rose by 4% y-o-y

excluding FX effect, due mainly to growth in allproducts

• Life premium income (51m) went down by 23% q-o-qand rose by 24% y-o-y, excluding FX effect. Q-o-qdecline mainly in unit-linked single premiums

Combined ratio: 98% in 1H16 (compared with94% in FY15) impacted by storms and a largefire claim

Cross-selling ratios: increased commercial focusand sales activities helped to improve demandfor property insurance combined with amortgage

COMBINED RATIO (NON-LIFE)

PREMIUM INCOME (GROSS EARNED PREMIUM)

41 44 45 47 45

30 4176

9567

46

51

2Q16

97

1Q16

112

4Q15

142

3Q15

121

2Q15

85

1Q15

71

98%

FY

94%

9M

94%

1H

95%

1Q

95%96%

20162015

Non-Life premium incomeLife premium income

CROSS-SELLING RATIOS

Mortg. & prop. Mortg. & life risk Cons. Fin. & life risk

68%

1H16

47%

2015

50%

1H16

62%

2015

57%

1H16

63%

2015

31

Czech Republic BU (5): lower operating expenses and stilllow impairments, excellent credit cost ratio

Operating expenses (143m EUR)• Fell by 16% q-o-q and by 6% y-o-y, excluding FX effect

• Excluding FX effect and bank tax, operating expensesincreased by 2% q-o-q and by 1% y-o-y

• The q-o-q increase excluding FX effect and bank taxwas due mainly to higher marketing expenses andprofessional fees, despite lower ICT expenses

• The y-o-y increase excluding FX effect and bank tax wasattributable primarily to higher ICT and marketingexpenses, only partly offset by lower staff expensesand lower professional fees

• Cost/income ratio at 36% in 2Q16 and 44% in 1H16(the latter mainly distorted by IFRIC 21). Adjusted forspecific items, the C/I ratio amounted to roughly 43%in 2Q16 and 44% YTD

Impairments on L&R were extremely low in 1Q16,while the increase in 2Q16 was mainly the resultof IBNR parameter changes (6m EUR impact).Overall favourable development in all segments

Credit cost ratio amounted to 0.09% in 1H16

Impaired loans ratio dropped to 2.8%, 2.2% of which over 90 days past due

ASSET IMPAIRMENT

OPERATING EXPENSES

141 140159

141

20

142

28

144

161

1Q15

10

150 7

4Q15

166

1Q16

170

2Q16

-1

140

3Q15

143

-2

2Q15

10

1

20

4

15

2

2Q15 3Q15 4Q15 1Q161Q15 2Q16

2012 2013 2014 2015 1H16

CCR 0.31% 0.26% 0.18% 0.18% 0.09%

Bank tax Operating expenses

32

INTERNATIONAL MARKETS BUSINESS UNIT

CFO SERVICES

CRO SERVICES

CORPORATE STAFF

BELGIUMCZECH

REPUBLICINTERNATIONAL

MARKETS

33

International Markets BU (1): net result of 123m EUR

* Non-annualised ** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

VOLUME TREND

Total loans ** Of which mortgages Customer deposits*** AuM Life reserves

Volume 21bn 14bn 18bn 5.6bn 0.6bn

Growth q-o-q* 0% +1% +3% -8% +3%

Growth y-o-y +1% +1% +13% -16% +8%

NET RESULT

Amounts in m EUR

123

6061

92

68

24

1Q15 2Q164Q15 1Q162Q15 3Q15

Net result: 123m EUR, despite 22m EUR bank taxes• Profit breakdown for International Markets: 37m EUR for

Slovakia, 53m EUR for Hungary, 4m EUR for Bulgaria and30m EUR for Ireland.

• Q-o-q results were characterised by higher net interestincome, higher net fee and commission income, higherresult from financial instruments at fair value, higherrealised gains on AFS assets (of which 31m EUR pre-tax onVisa), an excellent combined ratio in non-life insurance andhigher life insurance sales, a decrease in net other income,lower costs due entirely to lower bank taxes and higherbut still low loan loss impairment charges

34

International Markets BU (2): organic growth

The total loan book remained unchanged q-o-q and increased by 1% y-o-y• On a y-o-y basis, the 5% decrease in Ireland (matured and impaired mortgage loans surpassed new production + deleveraging of the

corporate loan portfolio) and 1% decrease in Hungary (due to large repayments within the Corporate portfolio) were offset entirely bythe increases of 15% in Slovakia (amongst other things due to the continuously increasing mortgage portfolio) and 12% in Bulgaria

Total deposits were up by 3% q-o-q and by 13% y-o-y• The 3% q-o-q increase was accounted for chiefly by an increase of 4% in Slovakia (primarily in current accounts) and of 4% in Hungary

(both in retail and corporates)

• The y-o-y rise of 13% was due mainly to Slovakia (strong growth in current accounts and corporates), Hungary (both in retail andcorporates) and the successful retail deposit campaign in Ireland.

* Organic growth excluding FX impact; q-o-q figures are non-annualised. Loan and mortgage figures after impairment charges

ORGANIC GROWTH*

TOTAL LOANS MORTGAGES DEPOSITS

q-o-q y-o-y q-o-q y-o-y q-o-q y-o-y

IRE -1% -5% -1% -3% +2% +11%

SL +3% +15% +8% +22% +4% +16%

HU -1% -1% +1% +2% +4% +13%

BG +3% +12% -3% -3% +1% +8%

TOTAL 0% +1% +1% +1% +3% +13%

35

International Markets BU (3): slightly higher NII and NIM

Net interest income (179m EUR)• Rose by 1% both q-o-q and y-o-y

• The q-o-q increase was driven entirely by Ireland(lower allocated liquidity and funding costs), whichmore than offset a decrease in Slovakia (marginpressure on mortgages) and Hungary (lowerreinvestment yield and lower NII from dealing room)

• The y-o-y rise was also attributable fully to Ireland(lower allocated liquidity and funding costs), whichmore than offset a decrease in Hungary (lowerreinvestment yield and a decrease in corporate loans)

Net interest margin (2.48%)• Up by 1 bp q-o-q and down by 12 bps y-o-y

• The q-o-q increase was driven entirely by Ireland(mainly as a result of lower allocated liquidity andfunding costs)

• The y-o-y decrease was accounted for entirely bySlovakia, Hungary and Bulgaria, despite a considerabley-o-y rise in NIM in Ireland

NIM

NII

Amounts in m EUR

179178181180178172

2Q161Q164Q153Q152Q151Q15

4Q15

2.50%

3Q15

2.56%

2Q15

2.60%

1Q15

2.53%

1Q16

2.48%

2Q16

2.47%

36

International Markets BU (4): higher net F&C income

Net fee and commission income (51m EUR)• Up by 5% q-o-q and fell by 4% y-o-y

• The q-o-q increase was driven primarily by higherfees from payment services in Hungary (seasonaleffect)

• The y-o-y decrease was driven mainly by:o lower fees from payment services and from

credit files & bank guarantees in Slovakia due tonew regulations

o lower asset management fees in Hungary

Assets under management (5.6bn EUR)• Decreased by 8% q-o-q, as a result of net outflows

(-6%) and a negative price effect (-2%)

• Y-o-y, assets under management fell by 16%, dueto net outflows (-15%) and a negative price effect(-1%)

AuM*

F&C

Amounts in bn EUR

Amounts in m EUR

5148

51515350

4Q15 2Q161Q162Q15 3Q151Q15

1Q16 2Q16

6.8

4Q152Q15 3Q15

6.76.26.4

6.1

1Q15

5.6

* The breakdown across the BUs is based on the ‘Assets under Distribution’ in each BU

37

International Markets BU (5): higher premium incomeand excellent combined ratio

Insurance premium income (gross earnedpremium) stood at 73m EUR• Non-life premium income (49m) rose by 19% y-o-y as

a result of:o growing average premium in motor retail in

Hungaryo good performance in casco in Bulgariao good performance in MTPL, casco and household

insurance in Slovakia

• Life premium income (24m)o more or less flat q-o-q as the successful sales of a

new interest guaranteed product in Bulgaria wereoffset by lower single life premiums in Slovakia

o rose by 26% y-o-y driven entirely by the successfulsales of a new interest guaranteed product inBulgaria and good cross-selling ratios in Slovakia

Combined ratio at an excellent 90% in 1H16(95% in FY15). The combined ratio for 1H16breaks down into 86% for Hungary, 87% forSlovakia and 97% for Bulgaria

COMBINED RATIO (NON-LIFE)

PREMIUM INCOME(GROSS EARNED PREMIUM)

Amounts in m EUR

39 41 43 46 46

23 1927 21 24

49

24

2Q16

73

1Q16

70

4Q15

67

3Q15

70

2Q15

60

1Q15

62

95%

1H

95%

1Q

88%88% 90%

FY

95%

9M

20162015

Non-Life premium incomeLife premium income

38

International Markets BU (6): lower operating expenses, low impairments, excellent credit cost ratio

Operating expenses (172m EUR)• Fell by 17% q-o-q and rose by 1% y-o-y

• Opex without bank tax rose by 2% q-o-q driven by:o higher staff expenses and professional fees in Slovakiao higher staff and ICT expenses in Hungaryo higher staff and marketing & communication expenses in Bulgaria

• Opex without bank tax rose by 3% y-o-y

• C/I ratio stood at 53% in 2Q16 and 64% in 1H16 (the latter mainlydistorted by IFRIC 21). Adjusted for specific items, the C/I ratioamounted to 65% in 2Q16 and 64% YTD

Impairments on L&R (6m EUR)• Low level due to:

o Ireland (-1m EUR in 2Q16 compared with -3m EUR in 1Q16 and16m EUR in 2Q15), driven mainly by an increase in the 9-monthaverage House Price Index* and positive pool migrations, partlyoffset by the negative impact of model changes

o various releases in retail and corporate files in Hungary (despitethe negative impact of model changes on portfolio-basedprovisions for SMEs)

Credit cost ratio of 0.03% in 1H16

Impaired loans ratio dropped to 27.8%, of which 14.8% over 90 days past due

ASSET IMPAIRMENT

OPERATING EXPENSES

Amounts in m EUR

148 145 148 156 147

79

25 2328 61

150

22

172

2Q161Q16

208

4Q15

184

3Q15

171

2Q15

170

1Q15

226

6

-2

28

12

28

16

2Q161Q164Q153Q152Q151Q15

Loan book

2012CCR

2013CCR

2014CCR

2015CCR

1H16CCR

IM BU 25bn 2.26% 4.48% 1.06% 0.32% 0.03%

- Ireland- Hungary- Slovakia- Bulgaria

14bn5bn6bn1bn

3.34%0.78%0.25%0.94%

6.72%1.50%0.60%1.19%

1.33%0.94%0.36%1.30%

0.34%0.12%0.32%1.21%

-0.06%-0.11%0.23%0.64%

Operating expensesBank tax

* Note that the CSO will launch a new Residential Property Price Index (RPPI) for Ireland in early September 2016

39

Ireland (1): profitable in 1H16 (53m EUR)

Strong domestic activity suggests Irish GDP growth is likely to be about 4%in 2016, with the UK referendum vote likely to restrain growth in 2H16

Domestic spending is expected to improve further, supporting solid jobsgrowth and driving a reduction in unemployment rate towards 7.8% at end2Q16

The housing market continues to recover with house price inflation easinggradually to a more sustainable level

Customer Deposits (Retail & Corporate) net inflows of 0.1bn EUR in 2Q16,

resulting in a deposit portfolio of 5.5bn EUR (compared with 5.4bn EUR in1Q16). Growth of Customer Deposits amounted to 15% y-o-y

Loan loss provision release of 1m EUR in 2Q16 compared with 3m EURrelease in 1Q16. Coverage ratio increased from 42% in 1Q16 to 43% in2Q16

We are lowering our impairment guidance for Ireland, namely from the

lower end of the 50m-100m EUR range for impairments towards a0m-40m EUR range for FY16

LOAN PORTFOLIO €

OUT-STANDING

€

IMPAIRED LOANS

€

IMPAIRED LOANS PD

10-12

SPECIFIC PROVISIONS

€

IMPAIRED LOANS

PD 10-12 COVERAGE

Owner occupied mortgages

9.0bn 2.9bn 32.6% 1.0bn 33%

Buy to let mortgages

2.4bn 1.7bn 68.2% 0.7bn 43%

SME /corporate 1.0bn 0.7bn 67.1% 0.4bn 61%

Real estate- Investment- Development

0.8bn0.3bn

0.6bn0.3bn

76.2%100.0%

0.3bn0.2bn

56%90%

Total 13.5bn 6.1bn 45.3% 2.6bn 43%

PROPORTION OF HIGH RISK AND IMPAIRED LOANS

7.2%

52.1%

High Risk Performing (PD 8-9 probability of Default >6.4%)

Impaired Loan (PD 10-12)

5.4%

52.6%50.2%

4.7%8.2%

52.0% 51.3% 50.3%

8.4%8.2% 9.2%

48.7%

9.5%

47.3% 46.4%

9.9%

45.3%

10.3%

40

Retail portfolio Impaired portfolio fell by roughly 140m EUR q-o-q due to a

combination of property sales and improvement in the portfolioperformance. This was in line with the previous quarter (reductionof 0.2bn EUR q-o-q and 0.8bn EUR y-o-y)

Coverage ratio for impaired loans increased to 36.4% in 2Q16 (from35.4% in 1Q16)

Overall exposure has decreased due to a reduction of the impairedbook and loan amortisations, partly offset by new mortgageproduction

Ireland (2): portfolio analysis

Corporate loan portfolio Impaired portfolio has reduced by roughly 90m EUR q-o-q.

Reduction driven mainly by continued deleverage of theportfolio (reduction of 0.2bn EUR y-o-y)

Coverage ratio for impaired loans has increased to 64.0% in2Q16 (from 62.9% in 1Q16)

Overall exposure has dropped by 0.4bn EUR y-o-y

‘Forborne’ loans (in line with EBA Technical Standards) comprise loans on a live restructure or continuing

to serve a probation period post-restructure/cure to Performing.

2Q16 Retail Portfolio

PD Exposure Impairment Cover %

PD 1-8 5,901 24 0.4%

Of which non Forborne 5,839

Of which Forborne 61

PD 9 975 52 5.3%

Of which non Forborne 243

Of which Forborne 732

PD 10 2,617 667 25.5%

PD 11 1,227 428 34.9%

PD 12 760 578 76.1%

TOTAL PD1-12 11,480 1,750

Specific Impairment/(PD 10-12) 36.4%

Perf

orm

ing

Impa

ired

2Q16 Corporate Loan Portfolio

PD Exposure Impairment Cover %

PD 1-8 472 1 0.2%

PD 9 45 1 2.6%

PD 10 517 189 36.5%

PD 11 279 179 64.3%

PD 12 723 603 83.5%

TOTAL PD1-12 2,035 973

Specific Impairment/(PD 10-12) 64.0%

Impa

ired

Perf

.

41

GROUP CENTRE

CFO SERVICES

CRO SERVICES

CORPORATE STAFF

BELGIUMCZECH

REPUBLICINTERNATIONAL

MARKETS

42

Group Centre: net result of 37m EUR

Net result: 37m EUR The net result for the Group Centre comprises the results coming

from activities and/or decisions specifically made for grouppurposes (see table below for components)

The q-o-q improvement was attributable mainly to:o a decrease of 19m EUR in operating expenses in 2Q16 due

partly to a partial reversal of the bank tax booked in 1Q16o a +29m EUR higher positive DTA impact (47m EUR positive

DTA impact in 2Q16 compared to 18m positive DTA impact in1Q16)

NET RESULT

Amounts in m EUR

-6-2

-57

-90

3713

1Q16

765

3Q152Q15 4Q15

334

-341

2Q161Q15

BREAKDOWN OF NET RESULT AT GROUP CENTRE

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Group item (ongoing business) 11 -36 -18 -422 2 27

- Operating expenses of group activities -19 -15 0 -62 -18 -7

- Capital and treasury management 5 7 0 0 1 1

o/w net subordinated debt cost -9 -10 -9 -9 -9 -9

- Holding of participations -17 -26 -18 -15 -17 -9

o/w net funding cost of participations -7 -7 -7 -6 -5 -5

- Group Re* - - - - 3 2

- Other 41 -2 0 -346 33 39

Ongoing results of divestments and companies in run-down 2 -22 16 756 -8 10

Total net result at GC 13 -57 -2 334 -6 37

GW impairmentsImpact KBC FH Group Centre

* Group Re was shifted from the Belgium Business Unit to Group Centre as of 2016

43

NET PROFIT – BELGIUM NET PROFIT – CZECH REPUBLIC

730 803 703858

630767

812706

579

1H162015

1,564

2014

1,515

2013

1,570

2012

1,360

1H16 ROAC: 20%

Amounts in m EUR

317 279 277 271

264275 251 271

320

1H162015

542

2014

528

2013

554

2012

5811H16 ROAC: 45%

NET PROFIT –INTERNATIONAL MARKETS

-743

-203-204

-110

153

92

183

1H162015

245

2014

-182

21

2013

-853

2012

-260

-56

1H16 ROAC: 19%

-104

92

104 103

101

140

3640

130

1H162015

232

2014

-3

2013

139

2012

144

NET PROFIT – INTERNATIONAL MARKETS EXCL. IRELAND

Overview of results based on business units

2H 1H 2H 1H

1H2H 2H 1H

1H16 ROAC: 22%

44

Balance sheet (1/2):Loans and deposits continue to grow in most core countries

Deposits***

6%

4% 4%

MortgagesLoans**

* Volume growth making abstraction of FX effects and divestments/acquisitions** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

Y-O-Y ORGANIC* VOLUME GROWTH FOR KBC GROUP

45

Balance sheet (2/2):Loans and deposits continue to grow in most core countries

Deposits***

6%

Mortgages

3%

Loans**

4%

Deposits***

9%

Mortgages

11%

Loans**

10%

Deposits***

11%

Mortgages

-3%

Loans**

-5%

Deposits***

16%

Mortgages

22%

Loans**

15%

Deposits***

13%

Mortgages

2%

Loans**

-1%

Deposits***

8%

Mortgages

-3%

Loans**

12%

BE

CZ

Y-O-Y ORGANIC* VOLUME GROWTH FOR MAIN ENTITIES

* Volume growth making abstraction of FX effects and divestments/acquisitions** Loans to customers, excluding reverse repos (and bonds)*** Customer deposits, including debt certificates but excluding repos

46

KBC Group

Section 3

Strong solvency andsolid liquidity

47

Strong capital position

Phased-in Basel 3 CET1 ratio at KBC Group (Danish Compromise)

10.25% regulatoryminimum

1H16

14.9%

1Q16

14.6%

FY15

15.2%

9M15

17.2%

13.7%

2.4%

1.2%

1H15

16.9%

13.3%

2.4%

1.2%

1Q15

14.7%

11.4%

2.2%

1.1%

Phased-in B3 CET1 ratio w/o YES and penalty on YESYESPenalty on YES

Common equity ratio (B3 phased-in) of14.9% based on the Danish Compromise atend 1H16, which clearly exceeds the newminimum capital requirements set by the ECB(9.75%) and the NBB (0.5%)*, i.e. anaggregate 10.25% for 2016

* As announced by the NBB the systemic buffer (CET1 phased-in of 0.5% in 2016 under the Danish Compromise) will gradually increase over a 3-year period, reaching 1.5% in 2018

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

11.25% pro forma regulatory minimum

14.9%

1H161Q16

14.6%

FY15

14.9%

9M15

17.4%

14.0%

2.3%

1.2%

1H15

16.7%

13.2%

2.3%

1.2%

1Q15

14.9%

11.7%

2.2%

1.1%

Fully loaded B3 CET1 ratio w/o YES and penalty on YESYESPenalty on YES

A pro forma fully loaded common equity ratiotranslation to 11.25% was clearly exceededwith a fully loaded B3 common equity ratioof 14.9% based on the Danish Compromise atend 1H16

48

Fully loaded Basel 3 leverage ratio

Fully loaded B3 leverage ratio, based on thecurrent CRR legislation (which was adaptedduring 4Q14):• 5.1% at KBC Bank consolidated level

• 6.0% at KBC Group level

5.1%

1Q16

5.0%

FY15

5.4%

9M15 1H16

4.8%

1H15

4.8%

1Q15

4.9%

Fully loaded Basel 3 leverage ratio at KBC Bank

Fully loaded Basel 3 leverage ratio at KBC Group

6.0%

6.7%

1H15 1Q16

5.9%6.4%

5.2%

0.9%

0.4%

FY15

0.4%

0.8%

6.3%

5.9%

0.8%

5.4%6.3%

9M15

6.9%

5.6%

0.4%

1H16

6.0%

1Q15

Penalty on YES YES FL B3 leverage ratio excl. YES and penalty on YES

49

KBC maintains a minimum total capital ratio of 17%*

• Minimum CET1 target of11.25% fully loaded (SREPof 9.75% and DomesticSIFI buffer of 1.50% fullyloaded)

• AT1 of 1.5%

• Minimum T2 target of 2%

• Minimum total capital ratio of 17.0%

Total capital ratioof 19.3% phased-in

2017e fully loaded

11.25%

1.50% AT1

2.00% T2

2.25% additionalcapital

1H16 fully loaded

14.93%

1.57%

2.58%

1H16 phased-in

14.89% CET1

1.64% AT1

2.76% T2

Total capital ratioof no less than 17.0%

fully loaded

Will be filled up with T2, depending on the actual CET1

position

* Basel 3, Danish Compromise

Total capital ratioof 19.1% fully loaded

50

Solid liquidity position (1)

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

64%70% 69% 73% 75% 73% 73%

8%

8%9%

9% 8% 9% 8%6%

10% 8% 8%8%

5%5%

9%5%

6%

74%

7%

7%

8%7%

7%

8%

2%2%2%0% 9%4%6%3%

8%

FY11

3%

3%

FY10FY09

100%

1H16

-4%

FY15

3%

FY14

3%

FY13

2%

3%

FY12

3%

Funding from customers

Certificates of deposit

Total equity

Debt issues placed with institutional investors

Net secured funding

Net unsecured interbank funding

8%1%

20%

71%

Government and PSE

Debt issues in retail network

Mid-cap

Retail and SME

74% customer

driven

51

Short term unsecured funding KBC Bank vs Liquid assets as of end June 2016 (bn EUR)

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

(*)

NSFR is at 123% and LCR is at 132% by the end of 1H16

• Both ratios were well above the minimum target of at least105%, in compliance with the implementation of Basel 3liquidity requirements

Solid liquidity position (2)

Ratios FY15 1H16 Target

NSFR1 121% 123% >105%

LCR1 127% 132% >105%

1 Liquidity coverage ratio (LCR) is based on the Delegated Act requirements, while the NetStable Funding Ratio (NSFR) is based on KBC’s interpretation of current Basel Committeeguidance

18,5 17,4 15,619,04

24,70

65,0 62,958,5 58,3

68,6

352%362%

376%

306%278%

2Q15 3Q15 4Q15 1Q16 2Q16

Net Short Term Funding Available Liquid Assets Liquid Assets Coverage

KBC maintains a solid liquidity position, given that:

• Available liquid assets are almost 3 times the amount ofthe net recourse on short-term wholesale funding

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

52

KBC Group

Section 4

2Q 2016 wrap up

53

2Q 2016 wrap up

Strong commercial bank-insurance results in our core countries

Successful underlying earnings track record

Solid capital and robust liquidity position

54

KBC Group is the bank-insurer that puts its clients centre stage, even in demanding economiccircumstances

We expect the remainder of 2016 to be a year of sustained economic growth in both the euro areaand the US, despite the continuing low level of interest rates, the volatility on the financial marketsand higher than average economic & political uncertainty

Management guides for:• continued stable and solid returns for the Belgium & Czech Republic Business Units

• loan impairments for Ireland towards a 0m-40m EUR range for FY16

• a phased-in B3 common equity ratio of minimum 10.25% for 2016

• LCR and NSFR of at least 105%

Looking forward

55

KBC refines its dividend policy:

Starting as of this year, KBC aims to pay each year an interim dividend of 1 EUR per share inNovember of the accounting year, as an advance on the total dividend. This will ensure a more evenlydistributed cash flow to shareholders throughout the year

The current pay-out ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit isconfirmed

At its meeting held on 10 August 2016, the KBC Board of Directors approved an interimdividend* of 1 EUR per share, an advance payment on the total 2016 dividend. This dividendwill be paid on 18 November 2016

KBC Group introduces an interim dividend policy

* Ex-coupon date: 16 November 2016; Payment date: 18 November 2016

56

KBC Group

Annex 1

Company profile

57

Business profile

KBC is a leading player (retail and SME bank-insurance, private banking, commercial and local investment banking) in Belgium and its 4 core countries in CEE

BREAKDOWN OF ALLOCATED CAPITAL BY BUSINESS UNIT AT 30 JUNE 2016

Group Centre

4%

International Markets19%

Czech Republic

15%

Belgium 62%

58

BE CZ SK HU BG

Loans and deposits

Investment funds

Life insurance

Non-life insurance

Well-defined core markets provide access to ‘new growth’ in Europe

1. Excluding group insurance. Including group insurance, market share of life insurance amounted to 13% at the end of 2015

2. Source: KBC data, August 2016

MARKET SHARE (END 2015)

21% 19%11% 10%

3%

18%7%26%

40%

7%17%1

12%4%4%

10%5%3%

7%9%

BE CZ SK HU BG

% of Assets

2015

2016e

2017e

1%3%3%15%

70%

3.0%2.9%3.6%4.3%

1.4%

2.4%2.0%3.3%2.5%

1.2%

2.6%2.9%3.6%2.3%1.2%

REAL GDP GROWTH OUTLOOK FOR CORE MARKETS2

Macroeconomic outlookBased on GDP, CPI and unemployment trendsInspired by the Financial Times

IRELAND UK

BELGIUM

NETHERLANDS

GERMANY

CZECH REP

SLOVAKIA

HUNGARY

BULGARIA

GREECE

ITALY

PORTUGAL

SPAIN

FRANCE

KBC Group’s core markets

and Ireland

59

Loan loss experience at KBC

1H16CREDIT COST RATIO

FY15CREDIT COST RATIO

FY14CREDIT COST RATIO

FY13CREDIT COST RATIO

FY 2012CREDIT COST RATIO

AVERAGE ‘99 –’15

Belgium 0.07% 0.19% 0.23% 0.37% 0.28% n/a

Czech Republic

0.09% 0.18% 0.18% 0.26% 0.31% n/a

International Markets

0.03% 0.32% 1.06% 4.48%* 2.26% n/a

Group Centre 0.29% 0.54% 1.17% 1.85% 0.99% n/a

Total 0.07% 0.23% 0.42% 1.21%** 0.71% 0.52%

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

* The high credit cost ratio at the International Markets Business Unit is due in full to KBC Bank Ireland. Excluding Ireland, the CCR at this business unit amounted to 108 bps in FY13

** Credit cost ratio amounted to 1.21% in FY13 due to the reassessment of the loan books in Ireland and Hungary

60

Key strengths

Well-developed bank-insurance strategy and strong cross-selling capabilities

Strong commercial bank-insurance franchises in Belgium and the Czech Republic with stable and solid returns

Turnaround achieved in the International Markets Business Unit

Successful underlying earnings track record

Solid capital and robust liquidity position

61

Shareholder structure

Roughly 40% of KBC shares are owned by a syndicate of core shareholders, providing continuity to pursue long-termstrategic goals. Committed shareholders include the Cera/KBC Ancora Group (co-operative investment company),the Belgian farmers’ association (MRBB) and a group of industrialist families

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

SHAREHOLDER STRUCTURE AT END 1H16

MRBB

Free float

18.5%

7.6%11.5%

Other core

2.7%

Cera

59.8%

KBC Ancora

62

KBC Group going forward:To be among the best performing retail-focused institutions in Europe

KBC wants to build on its strengths and be among Europe’s best performing retail-focused financial institutions. This will be achieved by:

• Strengthening our bank-insurance business model for retail, SME and mid-cap clients in our core markets, in a highly cost-efficient way

• Focusing on sustainable and profitable growth within the framework of solid risk, capital and liquidity management

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

By achieving this, KBC wants to become the reference in bank-insurance in its core markets

63

KBC Group going forward:The bank-insurance business model, different countries, different stages of implementation

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

additional source of fee income

Bank branches selling insurance products of third party insurers as

additional source of fee income

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

commercial synergies

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

commercial synergies

Level 4: Integrated distribution and operation

Level 3: Integrated distribution

Level 2: Exclusive distribution

Level 1: Non-exclusive distribution

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

Belgium

Target for Central Europe

64

Summary of the financial targets at KBC Group levelas announced at our Investor Day in June 2014

Based on adjusted figures

1. Excluding marked-to-market valuations of ALM derivatives2. 2016 minimum phased-in CET1 ratio of 10.25% set by the ECB (9.75% minimum CET1) in combination with NBB’s systemic buffer (0.5% minimum in 2016, gradually

increasing over a 3-year period and reaching 1.5% in 2018) under the Danish compromise

Targets… by…

CAGR total income (‘13-’17)1 ≥ 2.25% 2017

CAGR bank-insurance gross income (‘13-’17) ≥ 5% 2017

C/I ratio ≤ 53% 2017

Combined ratio ≤ 94% 2017

Common equity ratio (phased-in, Danish Compromise)

≥ 10.25%2 2016

Total capital ratio(fully loaded, Danish compromise)

≥ 17% 2017

NSFR ≥ 105% 2014

LCR ≥ 105% 2014

Dividend payout ratio ≥ 50% 2016

65

KBC Group going forward: An optimised geographic footprint

Strengthen current geographic footprint

• Optimise business portfolio by strengthening current bank-insurance presence through organic growth or through acquisitions if possible.

• Strive for market leadership (top 3 bank/top 4 insurance) in core countries by 2020

• First priority for Ireland is to become profitable from 2016 onwards (already achieved in 2015). As of then, all available options (organically grow a profitable retail bank, build a captive bank-

insurance group or sell a profitable bank) will be considered

No further plans to expand beyond current geographic footprint

KBC Group will consider acquisition options, if any, to strengthen current geographic bank-insurance footprint

Clear financial criteria for investment decision-making, based on:

Solid capital position of KBC GroupInvestment returns in the short and mid termsNew investment contributing positively to group ROE

66

KBC Group going forward: An optimised geographic footprint

Become a reference in bank-insurance in each core country

Through a locally embedded bank-insurance business model and a strong corporate culture, creating superior client satisfaction

With a clear focus on sustainable and profitable growth

67

KBC Group

Annex 2

Other items

68

Some specific remarks for 2Q16

• As a result of the public offer of Visa Inc., KBC realised gains (on AFS assets) of 99m pre-tax and 84mpost-tax, of which:• 20m EUR pre-tax (also 20m post-tax) in the Belgium Business Unit• 48m EUR pre-tax and 39m EUR post-tax in the Czech Business Unit• 31m EUR pre-tax and 25m EUR post-tax in the International Markets Business Unit

• The Belgian government replaced the 4 existing taxes by 1, which led to 32m EUR extra bank taxes inthe Belgium BU in 2Q16 (38m EUR additional bank taxes partly offset by the ability to book 6m EURof the ESRF contribution as a non-P&L item)

• In 2Q16, a parameter adjustment was made to the IBNR-models (annual back-test). This resulted in aincrease of impairments by roughly 25m EUR, of which:• 18m EUR in the Belgium Business Unit• 6m in the Czech Business Unit• 1m in Bulgaria (International Markets Business Unit)

• A positive DTA impact of 27m EUR was booked, of which:• +47m DTA adjustment at KBC Credit Investment (in Group Center)• -20m DTA reversal at KBCS (in the Belgium Business Unit)

69

Sectorial breakdown of outstanding loan portfolio (1)(146bn EUR*) of KBC Bank Consolidated

Services

11%

Private Persons42%

Automotive2%

Agriculture, farming, fishing

3%

Authorities

3%

Building & construction

4%Finance & insurance

6%Real estate

7%

Rest14%

Distribution8%

Oil, gas & other fuels

1.5%0.7%Hotels, bars & restaurants

0.9%Shipping

1.1%

Machinery & heavy equipment1.1%

Chemicals1.0%

Metals

1.4%Other sectors

4.6%

Food producers

1.3%

Electricity

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

70

Geographical breakdown of the outstanding loan portfolio (2)(146bn EUR*) of KBC Bank Consolidated

Rest

1.7%

Asia

0.7%

North America

1.5%

Other CEE

0.5%Other W-Eur

7.5%Bulgaria

0.6%

Hungary

3.0%Slovakia

4.6%

Ireland 9.3%

Czech Rep.

13.7%

Belgium

56.8%

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

71

Impaired loans ratios, of which over 90 days past due

INTERNATIONAL MARKETS BUCZECH REPUBLIC BU

2Q15

9.3%

5.3%

1Q15

9.6%

5.5%4.4%

2Q16

7.8%

1Q16

8.2%

4.7%

4Q15

8.6%

4.8%

3Q15

9.0%

5.2%

of which over 90 days past due **

Impaired loans ratio *

2.8%

2.2%

3.4%

2.5%

2Q15

3.5%

2.6%

1Q15

3.7%

2.7%

1Q16

3.2%

2.4%

4Q15

3.4%

2.5%

3Q15 2Q16 1Q16

28.9%

15.4%

2Q16

27.8%

14.8%

4Q15

29.8%

16.0%

3Q15

31.4%

17.0%

2Q15

32.9%

17.9%

1Q15

33.4%

18.4%

BELGIUM BU

1Q15

4.2%

2.5%

2Q161Q16

3.7%

2.2%

4Q15

3.8%

2.2%

3Q15

4.0%

2.4%

2Q15

4.1%

2.4%

3.6%

2.0%

KBC GROUP

* Impaired loans ratio: total outstanding impaired loans (PD 10-12)/total outstanding loans** of which total outstanding loans with over 90 days past due (PD 11-12)/total outstanding loans

72

Cover ratios

INTERNATIONAL MARKETS BUCZECH REPUBLIC BU

BELGIUM BUKBC GROUP

* Impaired loans cover ratio: total impairments (specific) for impaired loans / total outstanding impaired loans (PD10-12)** Cover ratio for loans with over 90 days past due: total impairments (specific) for loans with over 90 days past due / total outstanding PD11-12 loans

1Q16

60.8%

45.4%

4Q15

60.3%

44.8%

3Q15

57.9%

43.9%

2Q15

57.8%

42.9%

1Q15

57.6%

42.4%

61.5%

2Q16

45.5%

Cover ratio for loans with over 90 days past due **

Impaired loans cover ratio *

2Q16

56.1%

1Q16

63.2%

54.2%

4Q15

65.1%

53.6%

3Q15

67.1%

54.2%

2Q15

66.6%

53.4%

1Q15

67.1%

52.9%

62.6%

59.7%

2Q16

42.5%

1Q16

60.0%

44.8%

4Q15

60.4%

44.7%

3Q15

56.5%

44.0%

2Q15

57.6%

43.6%

1Q15

58.3%

43.4%

43.0%

3Q152Q15

55.6%

41.7%

4Q15

58.1%

44.0%

59.4%

44.7%

60.0%

2Q16

55.2%

1Q15

54.5%

39.8% 40.4%

1Q16

73

Fully loaded B3 CET1 based on the Danish Compromise (DC)from 1Q16 to 2Q16

Jan 2012 Dec 2012 2014-2020

2Q16 impact1Q16 (B3 DC**)

-0.7

89.0

2Q16 (B3 DC)

89.8

DELTA AT NUMERATOR LEVEL (BN EUR)

DELTA ON RWA (BN EUR)

* Includes the q-o-q delta in remeasurement of defined benefit obligations, DTAs on losses carried forward, IRB provision shortfall, deduction re. financing provided toshareholders, translation differences, etc.

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

Fully loaded B3common equity ratio ofapprox. 14.9% at end2Q16 based on theDanish Compromise(DC)

A pro forma fullyloaded common equityratio translation to11.25% was clearlyexceeded

-0.00.6

Pro-rata accrual dividend B3 CET1 at end 2Q16 (DC)Other*

13.1

-0.4

B3 CET1 at end 1Q16 (DC)

2Q16 net result

13.3

-0.1

Delta in AFS revaluation reserves

74

Overview of B3 CET1 ratios at KBC Group

Method Numerator Denominator B3 CET1 ratio

FICOD*, phased-in 13,638 101,353 13.5%

FICOD, fully loaded 13,804 102,237 13.5%

DC**, phased-in 13,125 88,149 14.9%

DC, fully loaded 13,290 89,033 14.9%

DM***, fully loaded 12,151 83,222 14.6%

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

75

Solvency II ratio

Solvency II ratio

1Q16 2Q16

Solvency II ratio without cap of the NBB(ratio comparable with European peers)

210% 208%

Solvency II ratio with cap of the NBB* 195% 187%

* On 25 April 2016, the NBB published a circular determining the treatment of the loss absorbing capacity of deferred taxes in the Solvency II calculation. This caps theloss absorbing capacity of deferred taxes for Belgian insurance companies to the net deferred tax liability recognised on the economic balance sheet

On 25 April 2016, the NBB decided to impose a capon the loss absorbing capacity of deferred taxes inthe calculation of the required capital with retro-active application from 1 January 2016 onwards*.The introduction of such absolute cap deviatesboth from the European Solvency II regulation andthe practice of most other European regulatorsand increases the required capital

As a result of this gold-plating by the NBB, theformal Solvency II ratio came down from 210% to195% for 1Q16 and from 208% to 187% for 2Q16

The small reduction (-2%-points) in the Solvency IIratio without this cap was mainly the result oflower interest rates and lower corporate spreads.The stronger reduction of the Solvency II ratio withthe application of the cap (-8%-points) is due to alower cap as a result of the reduction of theavailable Deferred Tax Liabilities on the economicbalance sheet for 2Q16

76

Given the current regulatory framework, KBC Group is comfortable with:

• 23.0% risk-weighted TLAC*

• 8.3% leveraged TLAC

• 13.5% MREL*

23.0% TLAC as % of RWA

MREL (as % of total liabilities)

5.8%

0.6%1.3%0.9%

4.5%

TLAC (as % of leverage exposure)

5.4%

0.6%1.2%0.8%

TLAC (as % of RWA)

14.9%

1.6%

3.4%

2.2%0.8%

0.3%0.3%

Senior unsecured debt Holdco

T2 eligible TLAC (excl. T2 with 1y remaining maturity)

Senior unsecured debt Opco, 2.5% of RWA

Other MREL eligible liabilities > 1y

AT1

CET1

8.3% TLAC as % of leverage

exposure

13.5% MREL as % of total

liabilities

Comfortable bail-in buffer

* TLAC: Total Loss-Absorbing Capacity / MREL: Minimum requirement for own funds and eligible liabilities

77

P&L volatility from ALM derivatives

ALM derivatives (swaps and options) are used to hedge the interest rate risk of the loan & deposit portfolios. This creates an accounting mismatch between derivatives (at market value) and hedged products (at amortised cost)• Options are used to hedge the caps/floors that KBC is obliged by law to include in Belgian mortgages

Most of this mismatch is removed with IFRS hedge accounting

A part of the ALM derivatives has not been included in any hedge accounting structure for different reasons:• Option hedging for mortgage loans: no hedge accounting possible given the dynamic hedging strategy used

• Part of the ALM interest rate derivatives has not been included in a hedge accounting structure, due to the offsetting effect with AFS bonds impact on capital ratios (which is not the case with valuation changes of cash flow hedges due to the applied regulatory capital filter)

78

Open ALM swap positionProtecting stability of capital ratio

Keeping part of the ALM swaps outside of hedge accounting reduces the volatility of the capital ratios as shown below (Basel III fully loaded + Danish Compromise insurance deconsolidation)

Drawback is more volatility in P&L as revaluation of swaps recorded in P&L, whereas the revaluation of the AFS bonds is recognised in capital

AFS BondsOptions

AFS Bonds

Options

Open ALM Swaps Position

No Open ALM Swap Position Current Status

79

Government bond portfolio – Notional value

Notional investment of 49.4bn EUR in government bonds (excl. trading book) at end of 1H16, primarily as aresult of a significant excess liquidity position and the reinvestment of insurance reserves in fixed-incomeinstruments

Notional value of GIIPS exposure amounted to 6.2bn EUR at end of 1H16

Portugal *Ireland **

Netherlands *Austria *

Germany **Spain

5%Other

8%

France 11%

Italy5%

Slovakia

6%

Hungary

4%

Poland**

2%

Czech Rep.

14%

Belgium

39%

END 1H16(Notional value of 49.4bn EUR)

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

Spain5%

Other8%

France 10%

Italy5%

Slovakia

5%

Hungary

4%

Poland**

2%

Czech Rep.

14%

Belgium

41%

Portugal *Ireland **

Netherlands *Austria **

Germany **

END 2015(Notional value of 48.8bn EUR)

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

80

Government bond portfolio – Carrying value

Carrying value of 54.4bn EUR in government bonds (excl. trading book) at end of 1H16, primarily as a result of a significant excess liquidity position and the reinvestment of insurance reserves in fixed-income instruments

Carrying value of GIIPS exposure amounted to 7.4bn EUR at end of 1H16

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

END 1H16(Carrying value of 54.4bn EUR)

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

Portugal *Ireland **

Netherlands *Austria *

Germany *Spain

6%Other

8%

France 11%

Italy5%

Slovakia

6%

Hungary

4%

Poland **

2%

Czech Rep.

13%

Belgium

39%

END 2015(Carrying value of 53.4bn EUR)

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

Portugal *Ireland **

Netherlands *Austria **

Germany **Spain

6%Other

7%

France 10%

Italy5%

Slovakia

5%

Hungary

4%

Poland **

2%

Czech Rep.

13%

Belgium

41%

81

Upcoming mid-term funding maturities

KBC Group has also successfully issued an inaugural 750m EUR seniorunsecured bond with 5-year maturity in April 2016

KBC’s credit spreads have narrowed during 2Q16

KBC Bank has 6 solid sources of long-term funding:

• Retail term deposits

• Retail EMTN

• Public benchmark transactions

• Covered bonds

• Structured notes and covered bonds using the private placementformat

• Senior unsecured, T1 and T2 capital instruments issued at KBCGroup level and down-streamed to KBC Bank

4%

19%

7%

11%

4%

40%

15%

0,6%

1,1%

0,7%

1,2%

1,6%

0,7%

1,2%

0,3%

0,1%0,1%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2016 2017 2018 2019 2020 2021 2022 2023 2024 >= 2025

Mill

ion

sEU

R

Breakdown Funding Maturity Buckets

Senior Unsecured - Holdco Senior Unsecured - Opco Subordinated T1 Subordinated T2

Contingent Convertible Covered Bond TLTRO

Total outstanding =

20bn EUR

(Including % of KBC Group’s balance sheet)

82

-10

40

90

140

190

240

-15

5

25

45

65

85

105

125

145

Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16

Credit Spreads Evolution

2Y Senior Debt Opco Interpolated 5Y Covered Bond Interpolated 5Y Senior Debt Holdco 10NC5 Subordinated Tier 2

Credit spreads evolution

1 10NC5 Subordinated Tier 2 spread is depicted based on the right hand axis.

1

83

Analysts’ coverage

Bank/broker Analyst Contact details Rating Target Price Upside

Situation as of 2 August 2016, based on a share price of 46.13 EUR

ABN Amro Ron Heijdenrijk ron.heijdenrijk@nl.abnamro.com = 55,00 19%

Alpha Value Farahad Moshiri f.moshiri@alphavalue.eu + 50,10 9%

Autonomous Farquhar Murray FMurray@autonomous.com + 68,10 48%

Bank of America Merrill Lynch Tarik El Mejjad tarik.el_mejjad@baml.com + 58,60 27%

Barclays Capital Kiri Vijayarajah kiri.vijayarajah@barcap.com = 56,00 21%

Berenberg Andrew Lowe Andrew.Lowe@berenberg.com + 55,00 19%

Citi Investment Research Andrew Coombs andrew.coombs@citi.com + 70,00 52%

Degroof Petercam Bart Jooris bart.jooris@degroof.be = 52,20 13%

Deutsche Bank Flora Benhakoun flora-a.benhakoun@db.com + 50,00 8%

Exane BNP Paribas Guillaume Tiberghien guillaume.tiberghien@exanebnpparibas.com + 62,00 34%

Goldman Sachs Pawel Dziedzic Pawel.Dziedzic@gs.com + 70,00 52%

HSBC Johannes Thormann Johannes.Thormann@hsbc.de = 48,00 4%

ING Albert Ploegh albert.ploegh@ing.com + 60,00 30%

JP Morgan Securities Paul Formanko paul.formanko@jpmorgan.com + 75,00 63%

Keefe, Bruyette & Woods Jean-Pierre Lambert jplambert@kbw.com + 57,60 25%

KeplerCheuvreux Benoit Petrarque benoit.petrarque@keplercm.com + 60,00 30%

Mediobanca Robin van den Broek Robin.VanDenBroek@mediobanca.com + 65,00 41%

Morgan Stanley Bruce Hamilton Bruce.Hamilton@morganstanley.com + 65,10 41%

Natixis Securities Alex Koagne alex.koagne@sec.natixis.com + 64,60 40%

Oddo Julie Legrand jlegrand@oddo.fr + 69,00 50%

Santander Patrick Lee patrick.lee@gruposantander.com = 58,00 26%

Societe Generale Philip Richards philip.richards@sgcib.com - 39,00 -15%

UBS Anton Kryachok anton-a.kryachok@ubs.com = 48,00 4%

84

Glossary (1)

AQR Asset Quality Review

B3 Basel III

CBI Central Bank of Ireland

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

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

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

Cost/income ratio adjusted for specific items

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

being recognised for the most part upfront (as required by IFRIC21)• up to the end of 2014, also Legacy & OCR was an important correction• One-off items (such as the impact of the liquidation of KBC FH)

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

EBA European Banking Authority

ESMA European Securities and Markets Authority

ESFR European Single Resolution Fund

FICOD Financial Conglomerates Directive

Impaired loans cover ratio [total impairments (specific) for impaired loans] / [total outstanding impaired loans]. For a definition of ‘impaired’, see ‘Impaired loans ratio’

Impaired loans ratio [total outstanding impaired loans (PD 10-11-12)] / [total outstanding loans]

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

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

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

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

85

Glossary (2)

MARS Mortgage Arrears Resolution Strategy

MREL Minimum requirement for own funds and eligible liabilities

PD Probability of default

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

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

Return on equity[result after tax, attributable to equity holders of the parent] / [average parent shareholders’ equity, excluding the revaluation reserve for available-for-sale assets]. If a coupon is expected to be paid on the core-capital securities sold to the Belgian Federal and Flemish Regional governments, it will be deducted from the numerator (pro rata)

TLAC Total loss-absorbing capacity

86

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