#1KBC Group Company presentation FY 2022 / 4Q 2022 more information: www.kbc.com KBC Group - Investor Relations Office: [email protected] KBC 1 of 74#2KBC Key takeaways | Excellent net result of 818m EUR over 4Q22 Excellent 4Q22 net result of 818m EUR NET RESULT in m EUR 2 of 74 Highlights Commercial bank-insurance franchises in core markets performed excellently Customer loans and customer deposits increased y-o-y in all our core countries (on a comparable basis) • All KBC banking activities will subject its existing climate targets to SBTI • Higher net interest income q-o-q 793 811 818 776 663 557 601 458 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 YTD ratios Return on Equity 14% Cost-income ratio excluding bank taxes 48% Combined ratio 89% Credit cost ratio 0.08% CET1 ratio 15.4% (B3, DC, fully loaded) Leverage ratio 5.3% (fully loaded) NSFR 136% & LCR 152% . • . • Lower net fee and commission income q-o-q Q-o-q increase of net result from financial instruments at fair value and net other income Strong sales of non-life insurance y-o-y and strong sales of life insurance (both q-o-q and y-o-y) Costs excl. bank taxes increased q-o-q Higher net impairment charges Solid solvency and liquidity Updated financial guidance (see slides 20-22) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#3KBC Key takeaways | Capital deployment For FY22: M of 74 Capital deployment A total gross dividend of 4.0 EUR per share will be proposed to the AGM for the accounting year 2022 (of which an interim dividend of 1.0 EUR per share already paid in November 2022 and the remaining 3.0 EUR per share to be paid in May 2023) Including the proposed total dividend and AT1 coupon, the pay-out ratio would then amount to approximately 60% In line with our announced capital deployment plan for FY22, we envisage to distribute the surplus capital above the fully loaded CET1 ratio of 15% (approximately 0.4bn EUR), in the form of share buy-back (subject to ECB approval) and/or an extraordinary interim dividend. The final decision by the Board of Directors will be taken in 1H23 Including the proposed total dividend, AT1 coupon and the surplus capital above the fully loaded CET1 ratio of 15%, the pay-out ratio would then amount to approximately 75% In 1Q23: capital relief from the closing of the sale of substantially all of KBC Bank Ireland's performing loan asset and liabilities The closing of the sale of substantially all of KBC Bank Ireland's performing loan assets and liabilities to Bank of Ireland Group will lead to a capital relief of approximately 1bn EUR We envisage to distribute this 1bn EUR, in the form of share buy-back (subject to ECB approval) and/or an extraordinary interim dividend. The final decision by the Board of Directors will be taken in 1H23 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#4KBC Strategic focus | What differentiates us from peers Unique integrated bank-insurance+ model We offer an integrated response to our clients' banking and insurance needs. Our organisation is similarly integrated, operating as a single business and a digital-first, lead-driven and Al-led bank-insurer. Our integrated model offers our clients the benefit of a comprehensive, one-stop, relevant and personalised financial service that allows them to choose from a wider, complementary and optimised range of products and services, which go beyond pure bank-insurance. For ourselves, it offers benefits in terms of income and risk diversification, additional sales potential through intensive co-operation between the bank and insurance distribution channels, significant cost-savings and synergies, and heightened interaction opportunities with and a more complete understanding of our clients. Successful digital-first approach through KATE • Our digital interaction with clients forms the basis of our business model in our strategy, not only in terms of sales and advice, but also in E2E digital process and product development. Artificial intelligence and data analysis will play an important part in digital sales and advice. Kate, our personal digital assistant, is featured prominently in this regard. The independent international consulting firm Sia Partners named KBC Mobile one of the top performing mobile banking app worldwide (N°1 in 2021 and N°3 in 2022): a clear recognition of a decade of innovation, development and listening closely to our clients. • 4 of 74 Firmly embedded sustainability strategy As a company that aims to support the transition to a more sustainable and climate-proof society, we have made sustainability integral to our overall business strategy and integrated it into our day- to-day business operations and the products and services we provide. Our sustainability strategy consists of three cornerstones: encouraging responsible behaviour on the part of all our employees, increasing our positive impact on society and limiting any adverse impact we might have. Note that the first ever Climate Report has been published, (Limited Assurance by external auditor) 818 NET RESULT 4Q22 | BANKING & INSURANCE* in m EUR 17% 687 Banking activities of the Group Net Insurance 141 /activities result originates from insurance activities 4Q22 Difference between the net result at KBC Group and the sum of the banking and insurance contributions is accounted for by the holding-company/group items Highlights KATE users 2.9m KATE active users 1.9m 1/11 KATE autonomy 56% 51% BE | CZ see new climate targets on Slide 63 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#5KBC Strategic focus | The reference Profitability At KBC it is our ambition to be the reference for bank-insurance in all our core markets Solvency Sustainability SUSTAINALYTICS LO 5 of 74 With a Return on Equity of 14% in FY22 KBC is one of the most profitable EU financial institutions KBC With a fully loaded CET1 ratio of 15.4% at end FY22 KBC is amongst the best capitalised EU banks KBC Sustainalytics ranks KBC 10th out of 405 diversified global banks KBC Digitalisation Sia Partners ranks KBC Mobile as Belgian N°1 banking app and N°3 worldwide "KBC Mobile is a perfect and efficient banking app for everyday needs and one of the most innovative with some interesting extras. The app surprises customers with the wide range of functionalities and the virtual assistance by Kate." KBC SIAPARTNERS Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#6GC BU KBC Main exceptional items IM BU BE BU 4Q22 3Q22 4Q21 Non-Life technical charges - flood impact above legal limit Dividend inc-final liquidation dividend of real estate participation Total Exceptional items BE BU -7m EUR +12m EUR +12m EUR -7m EUR SK NOI - Provision for legacy legal files -7m EUR HUBK TAX - Recovery of extraordinary Deposit Guarantee Fund +14m EUR HU-Impairments - Modification losses -25m EUR -24m EUR -1m EUR - BG Opex one-off integration costs Raiffeisenbank Bulgaria -5m EUR -6m EUR BG Opex-one-off EUR adoption costs -1m EUR Total Exceptional items IM BU -24m EUR -30m EUR -1m EUR - IRL Sales transaction(s) +9m EUR +9m EUR -44m EUR (Opex -5m, Imp. -2m, tax +16m in 4Q22) IRL NOI - Additional impact for the tracker mortgage review NOI Badwill on OTP SK - NOI - Legacy legal file -4m EUR +28m EUR +6m EUR TAX-DTA impact due to increased UK corporate tax rate +15m EUR Total Exceptional items GC BU +24m EUR +9m EUR Total Exceptional items Om EUR Total Exceptional items (post-tax) +4m EUR -9m EUR -8m EUR -14m EUR Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding -22m EUR -21m EUR 6 of 74#7KBC Higher net interest income NET INTEREST INCOME in m EUR 1,068 Insurance 98 1,094 1,112 102 97 1,200 1,177 101 100 1,248 112 1,297 104 1,416 112 Banking 970 (incl. Holding) 993 1,015 1,076 1,100 1,136 1,193 1,304 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET INTEREST MARGIN in %, calculated excl. the dealing room and the net positive impact of ALM FX swaps & repos Highlights 1.78% 1.79% 1.80% 1.85% 1.91% 2.10% 1.91% 1.90% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view 7 of 74 ■ Net interest income (1 416m EUR) • NII increased by 9% q-o-q and by 20% y-o-y, the latter due partly to the consolidation of Raiffeisenbank Bulgaria as of 3Q22 (+37m EUR NII in 4Q22) On a comparable basis, NII increased by 9% q-o-q and by 17% y-o-y, driven primarily by: o Increasing reinvestment yield in all core countries (except q-o-q in the Czech Republic) o Organic loan (y-o-y) and deposit (both q-o-q and y-o-y) volume growth o Increased income related to funding (increased term deposits at better margins) o Higher NII on insurance bond portfolio (due mainly to inflation-linked bonds) partly offset by: 。 The negative effect of lower loan margins in most markets o Lower netted positive impact of ALM FX swaps ■ Net interest margin (2.10%) Rose by 20 bps q-o-q and by 25 bps y-o-y for the reasons mentioned above and despite an increase in the interest-bearing assets (denominator), both q-o-q and y-o-y Organic volume trend Total loans** o/w retail mortgages Customer deposits* *** Volume 186bn Growth q-o-q* Growth y-o-y 0% +7% 82bn +1% 226bn +2% +4% +8% * Non-annualised ** Loans to customers, excluding reverse repos (and bonds), including Ireland (under IFRS 5) and Raiffeisenbank Bulgaria. Growth figures are excluding FX, consolidation adjustments and reclassifications. *** Customer deposits, excluding debt certificates and repos, including Ireland (under IFRS 5) and Raiffeisenbank BG. Excluding the volatility in the foreign branches of KBC Bank (included in BE BU), customer deposits rose by 1% q-o-q and 5% y-o-y Company profile KBC Strategy Sustainability Asset quality MREL & Funding#8Lower fee and commission income KBC NET FEE & COMMISSION INCOME in m EUR 479 482 463 451 467 451 441 450 250 Banking 229 237 247 234 244 264 266 services Asset management 284 288 306 318 312 290 288 285 services • Distribution -72 -72 -77 -89 -77 -83 -89 -100 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 ASSETS UNDER MANAGEMENT in bn EUR 236 228 229 228 220 211 205 206 Investment 47 47 47 45 46 advice 41 40 40 40 Fund-of-Funds 63 Group assets & 23 255 65 66 69 23 23 23 23 52 23 67 62 62 60 60 23 21 19 19 Pension fund Direct Client 89 92 93 98 94 87 86 87 Money Highlights 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 8 of 74 ■ Net fee and commission income (451m EUR) • Down by 3% q-o-q and by 6% y-o-y (on a comparable basis, down by 3% q-o-q and by 9% y-o-y) Q-o-q decrease was mainly the result of the following: o Net F&C income from Asset Management Services decreased by 1% q-o-q (due entirely to lower management fees, partly offset by higher entry fees) o Net F&C income from banking services increased by 1% q-o-q. Higher payment- related fees and securities-related fees were partly offset by lower fees from credit files & bank guarantees and higher fee expenses in Retail (in the Czech Republic) o Paid distribution costs went up by 12% q-o-q (chiefly higher commissions paid linked to banking products and increased insurance sales, mainly seasonal) Y-o-y decrease was mainly the result of the following: o Net F&C income from Asset Management Services fell by 10% y-o-y (lower management and entry fees) o Net F&C income from banking services increased by 6% y-o-y, entirely due to the consolidation of Raiffeisenbank Bulgaria as of 3Q22 (+17m EUR net F&C income in 4Q22) o Paid distribution costs rose by 12% y-o-y (mainly higher commissions paid linked to strong sales of non-life insurance products) ■ Assets under management (206bn EUR) • Increased by 1% q-o-q due almost entirely to the market performance Decreased by 13% y-o-y due to the negative market performance (-15%), partly offset by net inflows (+2%) The mutual fund business has seen net inflows in higher-margin direct client money this quarter (0.3bn in 4Q22 and 2.9bn EUR in FY22), more than offset by net outflows in lower-margin fund-of-funds and group assets Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#9KBC Non-life and life sales significantly up y-o-y NON-LIFE SALES (GROSS WRITTEN PREMIUMS) in m EUR 645 590 446 450 487 486 466 435 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 COMBINED RATIO (NON-LIFE) in % 2021 2022 ■ Sales of non-life insurance products • Up by 7% y-o-y (growth in all countries and almost all classes, but chiefly in the classes 'Motor Comprehensive Cover' and 'Property', as a combination of volume and tariff increases) 9 of 74 ■ Non-life combined ratio for FY22 amounted to an excellent 89% (89% in FY21). This is the result of: 8% y-o-y higher earned premiums 4% y-o-y higher technical charges (higher normal claims and more negative impact of parameter updates were partly offset by lower major claims and lower storm claims) Lower ceded reinsurance result (down by 26m EUR y-o-y) • 78% 83% 82% 85% 87% 86% 89% 89% LIFE SALES in m EUR 1Q 1H 9M FY 724 541 544 298 471 494 Guaranteed 458 426 391 251 interest 223 254 215 330 products 225 222 425 Unit-linked 272 217 243 293 211 201 169 products 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 ■ Sales of life insurance products • Increased by 85% q-o-q due mainly to excellent sales of unit-linked products (up by 151% q-o-q due mainly to the successful launch of new structured funds in Belgium) and higher sales of guaranteed interest products (due chiefly to traditionally higher volumes in tax-incentivised pension savings products in Belgium) Increased by 34% y-o-y due mainly to higher sales of unit-linked products, partly offset by lower sales of guaranteed interest Sales of unit-linked products accounted for 59% of total life insurance sales in 4Q22 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#10KBC Sharply higher FIFV result and net other income 10 of 74 117 51 -25 ■ The 60m EUR q-o-q increase in FIFV was attributable mainly to: • Significantly higher dealing room Higher net result on equity instruments (insurance) & other income partly offset by: Negative change in ALM derivatives Less positive credit value adjustments and negative funding value adjustments which have been only partly offset by positive market value adjustments. The benefits of increased yield curves, an overall increase in equity markets and decreased counterparty credit spreads have been fully compensated by decreased KBC credit and funding spreads FIFV in m EUR Dealing room MVA/CVA/FVA Overlay insurance & other income M2M ALM/ derivatives 127 83 25 29 23 12 28 35 21 19 222 143 106 26 89 53 25 Քոլե 27 -7 1Q21 46 -52 2Q21 14 11 -33 26 -105 34 -23 27 25 -15 56 28 90 05 2725 -39 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET OTHER INCOME in m EUR 90 77 53 56 54 38 44 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 -2- 3Q22 4Q22 ■ Net other income amounted to 44m EUR Somewhat lower than the normal run rate of around 50m EUR per quarter due to a -7m EUR provision for legacy legal files in Slovakia (while 3Q22 was impacted mainly by realised losses on the sale of bonds) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#11KBC Costs in line with guidance OPERATING EXPENSES in m EUR 1,520 1,320 514 Bank tax 424 972 1,025 24 1,078 1,071 47 94 1,067 -23 1,160 15 30 1,145 Operating expenses 896 942 1,001 1,031 1,007 976 1,044 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 BANK TAX SPREAD 2022 in m EUR TOTAL Upfront Spread out over the year 4Q22 1Q22 2Q22 3Q22 4Q22 1Q22 2Q22 3Q22 4Q22 BE BU 0 354 -4 -1 0 0 0 0 0 CZ BU 1 60 -1 0 0 0 0 1 Hungary 13 56 78 0 -14 21 22 22 27 Slovakia 6 0 0 0 0 0 0 Bulgaria 0 12 -2 0 0 O 0 0 Ireland & 1 M 1 0 O 1 1 1 1 Group Centre TOTAL 15 492 72 -1 0 23 23 23 15 11 of 74 ■ FY22 opex excluding bank taxes amounted to 4.17bn EUR, in line with our guidance of 4.15bn EUR Operating expenses in FY22 excluding bank taxes, changes in the consolidation scope, one-offs and FX effect rose by 7% y-o-y due mainly to higher staff expenses (wage inflation), higher ICT costs, higher marketing and professional fee expenses • FY22 cost/income ratio 54% when excluding certain non-operating items* (55% in FY21) 48% excluding all bank taxes (51% in FY21) Operating expenses excluding bank taxes went up by 10% q-o-q and by 11% y-o-y. When excluding the 24m EUR consolidation impact of Raiffeisenbank Bulgaria in 4Q22, opex excluding bank taxes increased by 9% y-o-y The q-o-q increase is due mainly to the impact of inflation/wage indexation, higher ICT costs, seasonally higher marketing and professional fee expenses as well as higher depreciations, partly offset by less negative one-off costs related to the sales transaction in Ireland (-5m EUR in 4Q22 versus -15m EUR in 3Q22) The like-for-like y-o-y increase is due to, among other things, the impact of inflation/wage indexation, higher ICT costs, higher marketing and professional fee expenses, partly offset by less negative one-off costs related to the sales transactions in Ireland (-5m EUR in 4Q22 versus -16m EUR in 4Q21) Total bank taxes (including ESRF contribution) increased by 23% y-o-y to 646m EUR in FY22 See glossary for the exact definition Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#12KBC Overview of bank taxes* KBC GROUP in m EUR 514 424 154 154 ESRF** 119 contribution KBC Group 646m EUR 13.4% of FY22 opex BELGIUM BU in m EUR Common 360 305 bank taxes 94 30 47 24 23 15 3 27 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 CZECH REPUBLIC BU in m EUR 50 ESRF 37 contribution 60 60 46 46 354 311 99 ESRF 70 contribution Common bank taxes 242 6 255 12 of 74 Belgium BU 349m EUR 13.2% of FY22 opex 0 -4 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 INTERNATIONAL MARKETS*** BU Czech Rep. BU 61m EUR 6.6% of FY22 opex in m EUR contribution 96 9 97 tall.. 63 ESRF 12 47 23 Common bank taxes 23 51 1 22 1Q21 2Q21 3Q21 4Q21 98 87 22 13 1Q22 2Q22 3Q22 4Q22 Int. Markets BU 228m EUR 25.2% of FY22 opex/ Common bank taxes 13 14 1 1 1 -1 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 • 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. European Single Resolution Fund As of 1Q 2022, KBC Ireland has been shifted from International Markets Business Unit to Group Centre. No restatements have been made Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#13KBC Net loan loss impairment charges & excellent credit cost ratio ASSET IMPAIRMENT in m EUR; negative sign is a release 21 22 888 Other impairments ECL for geopolitical, emerging and Covid risks Impairments on financial assets at AC and FVOCI 101 132 23 51 193 28 22 19 103 42 46 37 18 40 O 17, 14 -26 -50 -1 -33 -24 -79 -129 -260 -77 -16 -123 -45 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 13 of 74 ■ Net loan loss impairment charges on lending book combined with an increased geopolitical & emerging risk buffer Net loan loss impairment charges of 82m EUR in 4Q22 (compared with 79m EUR in 3Q22) due to: o 40m EUR net loan impairment charges on lending book o An increase of 42m EUR due to the uncertainties surrounding geopolitical and emerging risks o Total outstanding ECL for geopolitical and emerging risks now stands at 429m EUR (see details on next slide) 51m EUR impairment on 'other', due mainly to: 。 25m EUR modification losses related to the interest cap regulation in Hungary (19m EUR for SMEs and an additional 6m EUR for retail mortgages) o A 21m EUR impairment on (in)tangibles o A 5m EUR goodwill impairment in the Czech Republic CREDIT COST RATIO in % ECL for geopolitical, emerging and Covid risks CCR without ECL for geopolitical, emerging and Covid risks 0.60% 0.44% 0.23% 0.09% 0.12% 0.09% 0.08% 0.16% 0.08% 0.00% -0.06% -0.04% -0.27% FY15 FY16 FY17 FY18 FY19 FY20 -0.18% FY21 FY22 IMPAIRED LOANS RATIO in % 3.3% 3.2% 3.1% 2.9% 2.3% 2.2% 2.0% 2.1% 3Q22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 Profit & Loss Capital & Liquidity Highlights Looking forward ■ The credit cost ratio in FY22 amounted to: • 0 bps (9 bps in FY21) without ECL for geopolitical, emerging and Covid risks 8 bps (-18 bps in FY21) with ECL for geopolitical, emerging and Covid risks The impaired loans ratio amounted to 2.1% (1.1% of which over 90 days past due) 4Q22 BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#14KBC Outstanding ECL for geopolitical and emerging risks amounts to 429m EUR 14 of 74 Y-O-Y CHANGE IN THE OUTSTANDING ECL FOR COVID, GEOPOLITICAL & EMERGING RISKS in m EUR; negative sign is a release Y-o-y ECL: +140m EUR 413 16 -34 371 289 -255 42 FY21 - Covid risks Geopolitical Acquisition ECL Covid Raiff BU and emerging risks 429 Write-off FY22 - ECL Geopolitical & emerging risks YTD negative P&L impact of 158m EUR 9M22 4Q22 OUTSTANDING ECL BY RISK DRIVERS AT YE22 (and q-o-q change) in m EUR; negative sign is a release A No direct subsidiaries B Very limited direct credit exposure C Indirect credit impact: counterparties D Emerging risks (secondary credit impact): portfolios/ (sub)sectors E Macroeconomic 7. scenarios Outstanding ECL KBC has no direct subsidiaries in Russia, Belarus or Ukraine Direct transfer risk exposure amounts to 29m EUR ECL, mainly concentrated in commercial exposure on Russian banks (due to recoveries, down from 34m EUR² after 9M22 or -5m EUR q-o-q). No exposure on Russian sovereign debt Counterparties-at-risk: (total client credit exposure at group level) Corp & SME with >20% sales, cost or profit in R, B or U Corp & SME directly impacted by possible disruption of Russian oil and gas supplies → Outstanding exposure: 2.8bn EUR → ECL: 39m EUR (down from 49m EUR after 9M22 or-10m EUR q-o-q, due mainly to the list of Belgian clients being updated) Vulnerable clients in retail and non-retail portfolios/(sub)sectors impacted by newly emerging risks (energy prices/supply bottlenecks/higher cost of living and rising interest rates) → Outstanding exposure: 11.3bn EUR → ECL: 304m EUR (up from 255m EUR² after 9M22 or +49m EUR q-o-q, driven mainly by the sectors that are vulnerable to the energy crisis being refined) Downward revision of macroeconomic forecasts, partly compensated by slightly improved probabilities to 60%/5%/35% (for base-case/optimistic/pessimistic scenario) → ECL: 57m EUR (up from 49m EUR after 9M22 or +8m EUR q-o-q) A+B+C+D+E = ECL: 429m EUR (+42m EUR q-o-q) Aligned with the credit risk view of our loan portfolio as reported in the quarterly financial statements 2. Including Raiffeisenbank Bulgaria, +6m (B) and +10m (D) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#15KBC Macroeconomic impact of the Russia/Ukraine conflict PRIMARY ENERGY CONSUMPTION | DECOMPOSITION in fraction of Joules consumed; Source: BP NATURAL GAS STOCK LEVEL | AS ON 31/JAN/23 in % of capacity; Source: KBC Economics based on GIE 15 of 74 82 79 76 Other renewables Hydro Nuclear Coal Oil 69 68 58 65 62 52 50 50 56 56 50 50 Present 39 additional stock level 39% 26 22% 26% 20% 24% Gas 11% 15% 17 26 26 Stock level of 17 19 13 March 2022 BE CZ SK HU BG GE EU BG GE CZ BE SK HU NATURAL GAS CONSUMPTION MAR-NOV | 2022 VS AVG 2017-2021 in %; Source: KBC Economics based on Eurostat Most countries have substantially lowered natural gas consumption since the start of the war in Ukraine (compared to their average 2017-2021 consumption in the same months) 6% NATURAL GAS COVERAGE | AS ON 31/JAN/23 in %; Source: KBC Economics based on GIE, Eurostat Figures denote the # of days of high gas consumption covered by current gas inventories (high gas consumption = mean daily consumption level during winter 2019-2020) -8% 191 -10% The Slovakia number -12% -15% -17% can be distorted by unusually strong refilling of stocks during summer 132 131 131 72 57 GE BE CZ BG HU SK Belgium as transit country has relatively small stock capacity, but large LNG terminal capacity SK HU CZ GE BG 14 BE Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#16Business profile KBC Highlights KBC GROUP BELGIUM BU CZECH REPUBLIC BU SLOVAKIA HUNGARY BULGARIA GROUP CENTRE Of which IRELAND GROUP CENTRE BU INTERNATIONAL MARKETS BU 4Q22 NET RESULT (in million euros) 818m 525m 159m 17m 104m 48m -35m 33m FY22 ROAC (in %) ALLOCATED CAPITAL (in %) 22% 22% 38% 18% 59% 16% 6% 7% 7% 5% 4% LOANS* (in billion euros) (q-o-q organic** growth loans) 186bn (0%) 117bn 35bn 11bn 6bn 9bn 8bn (0%) (0%) (+3%) (+1%) (+3%) (-6%) DEPOSITS*** (in billion euros) 226bn 145bn 49bn 8bn 9bn 12bn 2bn (q-o-q organic** growth deposits) (+2%) (+3%) (+1%) (+2%) (+3%) (+6%) (-20%) BRANCHES (end 4Q22) 420 201 110 195 266 CLIENTS (end 4Q22) 13m 3.8m 4.3m 0.8m 1.6m 2.4m Loans to customers, excluding reverse repos (and bonds) Volume growth excluding FX effects, divestments/acquisitions and reclassifications Customer deposits, excluding debt certificates and repos. Excluding the volatility in the foreign branches of KBC Bank (included in Belgium BU), customer deposits rose by 6% y-o-y both at KBC Group level as well as in Belgium BU 16 of 74 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#17KBC Fully loaded B3 CET1 from 3Q22 to 4Q22 (based on Danish Compromise) 17 of 74 Q-O-Q VARIANCE OF CET1 CAPITAL in bn EUR 16.9 +0.7 16.5 -0.7 +0.1 -0.0 +0.4 3Q22 (B3 DC) 4Q22 net result Dividend payout (excl. KBC Ins. due to Danish Compr.) Dividend payment KBC Ins to KBC Group Translation differences Other* 4Q22 (B3 DC) Q-O-Q VARIANCE OF RWA in bn EUR 110.2 0.2 -0.5 110.0 -0.0 3Q22 (B3 DC**) Volume growth Market RWA Other 4Q22 (B3 DC) Includes the q-o-q delta in deferred tax assets on losses carried forward, intangible fixed assets, AT1 coupon, remeasurement of defined benefit obligations, deduction pension plan assets, NPL shortfall etc. Includes the RWA equivalent for KBC Insurance based on DC, calculated as the historical book value of KBC Insurance multiplied by 370% Fully loaded B3 common equity ratio amounted to 15.4% at the end of FY22 based on the Danish Compromise Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#18KBC Strong capital position with substantial buffer to MDA 18 of 74 CAPITAL REQUIREMENTS AND DISTANCE TO MAXIMUM DISTRIBUTABLE AMOUNT (MDA) RESTRICTIONS AS AT 31 DEC 22 (FULLY LOADED, B3) in % Regulatory requirement KBC Group 15.4 12.3 AT1 1.8 10.5 (incl. P2R) CBR 5.0 P2R 1.0 CET1 10.5 Pillar I 4.5 18.4 16.8 1.4 1.6 Tier 2 AT1 1.4 AT1 14.8 Tier 2 (incl. P2R) 2.5 15.4 CET1 15.4 CET1 Tier 1 12.3 P2R 1.86% ( Pillar II requirement) 1.05% to be met with CET1, 35bps eligible for AT1 and 46bps for Tier 2 CBR 4.95% (= Combined buffer requirement) 2.50% Capital conservation buffer 1.50% O-SII buffer 0.75% Countercyclical buffer 0.20% Systemic risk buffer OCR (11.3%) buffer 4.1% MDA buffer 3.6% lowest of the buffers between available and required (i) CET1 capital, (ii) Tier 1 capital and (iii) Total capital MDA 11.8% i.e. the net of the CET1 ratio (15.4%) and the MDA buffer (3.6%) CET1 capital Tier 1 capital Total capital 4.9% 4.4% 3.6% Distance to MDA restrictions 5,396m EUR 4,862m EUR 3,933m EUR Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#19KBC Leverage ratio, Solvency II ratio and liquidity ratios LEVERAGE RATIO | KBC GROUP fully loaded, Basel 3 SOLVENCY II RATIO | KBC INSURANCE leverage ratio 5.3% FY22 5.2% in 9M22 SII ratio 203% FY22 227% in 9M22 LIQUIDITY RATIOS | KBC GROUP LCR 152% FY22 155% in 9M22 19 of 74 NSFR 136% FY22 140% in 9M22 Slight q-o-q increase of the leverage ratio Note that as of 1Q22, interim profit is recognised (based on 50% profit accrual) The q-o-q delta (-24pp) in the Solvency II ratio was driven mainly by inverted EUR interest rate curves and higher equity markets Both LCR* and NSFR** were well above the regulatory requirement of 100% due to a strong growth in customer funding and the participation to TLTRO II| * Net Stable Funding Ratio (NSFR) is based on KBC Bank's interpretation of the proposal of CRR amendment. ** Liquidity Coverage ratio (LCR) is based on the Delegated Act requirements. From EOY2017 onwards, KBC Bank discloses 12 months average LCR in accordance with EBA guidelines on LCR disclosure. Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#20KBC Looking forward Economic outlook 20 of 74 While at the end of 2022 some of the headwinds to the global economy turned into tailwinds (mild winter weather, significant structural savings in gas consumption...) and despite strong economic resilience last year, we expect a broad-based slowdown Inflation may have peaked in major economies as headline inflation turned lower in the US and the euro area. Going forward, we expect inflation to gradually decelerate as energy inflation falls back and core inflation gradually decreases We expect central banks (i.e. FED and ECB) to continue their rate hikes in the first half of 2023, while early moving CEE-central banks such as the CNB and NBH remain in a wait-and-see stance against a backdrop of still high inflation Group guidance for 2023* Our FY23 total income guidance stands at 9.4bn EUR ballpark figure (including a 0.4bn EUR positive one-off effect upon closing of substantially all of KBC Bank Ireland's performing loan assets and its deposit book), of which 5.7bn EUR ballpark for NII FY23 opex excluding bank taxes is estimated at 4.4bn EUR ballpark figure The credit cost ratio for 2023 is estimated at 20-25bps (below the through-the-cycle CCR of 25-30bps), excluding any movement in the ECL buffer Basel 4 guidance The B4 impact on RWA will be phased-in, and therefore the first-time application RWA impact in 2025 will only be approximately 3bn EUR Our Group guidance for 2023 is based on the market forward rates of 3 February 2023 (for ST & LT interest rates). We took into account a pass-through rate of 40% on saving accounts and 80% on term deposits at KBC Group level. Volume growth in 2023 is estimated at roughly 3-4% y-o-y. Note that IFRS17 impact is not yet taken into account (explanatory slides will be provided on 18 April 2023) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#21KBC 2023 NII sensitivity 5.2bn NII EVOLUTION WITH PASS-THROUGH SENSITIVITY in bn EUR 0.2bn 0.1bn 0.2bn 4.8bn FY22 NII KBC Ireland disposal KBC Bank Bulgaria full annum TLTRO, ECB Tiering & negative FY22 NII like-for-like IR charging PT = Pass-Through rate; SA = Savings Accounts; TD = Term Deposits Highlights Profit & Loss Capital & Liquidity 0.9bn +0.15bn 5.7bn volume & margin impact FY23 NII sensitivity if 30% PT on EUR denominated 21 of 74 at 40% PT on SA and 80% on TD at KBC Group level SA* With 40% PT on non-EUR denominated SA and 80% on TD MREL & Funding Sustainability Asset quality Looking forward BU & FY22 view Company profile KBC Strategy#22KBC Long-term / 3-year financial guidance 3-year financial guidance* CAGR total income ('22-'25) + 6.0% CAGR OPEX excl. bank taxes ('22-'25) +1.8% Combined ratio Surplus capital ** ≤ 92% > 15% by 2025 by 2025 as of now as of now Our long-term financial guidance is based on the market forward rates of 3 February 2023 (for ST & LT interest rates). We took into account a pass-through rate of 40% on saving accounts and 80% on term deposits at KBC Group level. Note that IFRS17 impact is not yet taken into account. KBC estimates that the forward rates are on the conservative side. ** Fully loaded CET1 ratio, Danish Compromise Long-term financial guidance Credit cost ratio 25-30 bps through-the-cycle Regulatory requirements Overall capital requirement (OCR)* MREL as a % of RWA** MREL as a % of LRE** NSFR LCR Excluding Pillar 2 guidance of 100 bps ≥ 11.31% ≥ 27.87% ≥ 7.38% ≥ 100% ≥ 100% ** In December 2022, the SRB communicated the updated draft MREL targets (under BRRD2) for 01-01-2024 in % of RWA and in % of LRE by 2023 by 2024 by 2024 as of now as of now 22 of 74 Jaws of ± 4.2% → C/I ratio excl BT ±43% Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#23KBC Wrap-up | KBC's engine firing on all cylinders Excellent financial performance net result ROE 818m in 4Q22 2864m in FY22 14% FY22 KATE convinces customers 23 of 74 Outstanding solvency and liquidity CET1 ratio 15.4% 3.6% buffer vs MDA SII ratio 203% NSFR 136% LCR 152% Franchise is growing FY22 loan FY22 customer deposits +8% volumes +7% y-o-y FY22 non- FY22 life sales y-o-y +6% y-o-y FY22 AM net inflows of direct client money +2.9bn y-o-y KATE users 2.9m FY22 KATE autonomy 56% 51% BE CZ life sales +8% y-o-y Of which 1.9m active users Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#24KBC Supplemental information & disclosures 24 of 74 BU & FY22 view (slide 24-43) Belgium BU Czech Republic BU International Markets BU . Slovakia Hungary Annexes (slide 44-70) ⚫ Company profile KBC strategy • Sustainability Asset quality MREL & funding Bulgaria Group Centre BU • Ireland FY 2022 Navigate quickly to this content by using the below tabs in the digital version of this memo Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#25KBC NET RESULT in m EUR Belgium BU (1) | Net result & NII 603 528 564 486 525 444 380 227 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET INTEREST INCOME in m EUR 812 626 637 629 641 635 677 702 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET INTEREST MARGIN in % 1.63% 1.63% 1.61% 1.60% 1.57% 1.59% 1.62% 1.95% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits** Volume 117bn EUR 44bn EUR 145bn EUR Growth q-o-q* Growth y-o-y 0% +8% +1% +7% +3% +11% 25 of 74 ■ Net result of 525m EUR in 4Q22 The quarter was characterised by higher net interest income, higher net fee and commission income, higher net result from financial instruments at fair value, higher net other income, lower sales of non-life insurance and higher sales of life insurance products, higher operating expenses and higher net impairment charges Customer deposits excluding debt certificates and repos rose by 11% y-o-y, while customer loans rose by 8% y-o-y ■ Net interest income +16% q-o-q, driven mainly by higher reinvestment yields thanks to increasing interest rates, deposit volume growth, lower funding costs and higher NII on insurance bond portfolio (due mainly to inflation-linked bonds) partly offset by margin pressure on the outstanding loan portfolio in all segments +27% y-o-y for the same reasons mentioned above including good loan volume growth and despite no charging of negative interest rates on current accounts held by corporate entities and SMEs and no positive tiering effect anymore (which was the case in 4Q21) ■ Net interest margin Increased by 33 bps q-o-q and by 35 bps y-o-y for the reasons mentioned above, despite an increase in the interest-bearing assets (denominator), both q-o-q and y-o-y * Non-annualised ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications. *** Customer deposits, excluding debt certificates and repos. Excluding the volatility in the foreign branches of KBC Bank (included in BE BU), customer deposits rose slightly q-o-q and 6% y-o-y Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#26KBC Belgium BU (2) | Credit margins in Belgium 26 of 74 PRODUCT SPREAD ON CUSTOMER LOAN BOOK - OUTSTANDING in % 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 PRODUCT SPREAD - NEW PRODUCTION in % 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 24320987654325 0.1 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 SME and corporate loans Mortgage loans Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#27KBC Belgium BU (3) | Other income lines & cross-selling NET FEE & COMMISSION INCOME in m EUR 333 338 345 327 322 314 302 304 Banking 375 372 385 394 394 370 360 362 contribution Insurance -48 -50 -53 -56 -49 -56 -58 -58 contribution 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 MORTGAGE-RELATED CROSS-SELLING RATIOS In % 100 90 80 70 63.7% 60 60 49.5% 50 94.1% Property insurance 86.1% Life insurance ■ Net fee & commission income • +1% q-o-q and -10% y-o-y • 27 of 74 The 1% higher q-o-q net F&C income was mainly the result of higher entry fees, higher payment-related fees and higher securities-related fees, partly offset by lower management fees and higher distribution commissions paid The 10% lower y-o-y net F&C income was driven chiefly by lower management and entry fees, lower securities-related fees, lower fees from credit files & bank guarantees, lower network income and higher distribution commissions paid partly offset by higher fees from payment services ■ Assets under management • 184bn EUR Stabilised q-o-q and decreased by 15% y-o-y due entirely to the negative market performance. ■ Insurance Insurance sales: 910m EUR o Non-life sales (280m EUR) +5% y-o-y, due to premium growth in all classes, but chiefly in the classes 'Motor Comprehensive Cover' and 'Property', as a combination of volume and tariff increases o Life sales (630m EUR) more than doubled q-o-q and increased by 41% y-o-y The q-o-q increase was driven by excellent sales of unit-linked products (+202% q-o-q due mainly to the successful launch of new structured funds) and higher sales of guaranteed interest products (due chiefly to traditionally higher volumes in tax-incentivised pension savings products) The y-o-y increase was driven fully by higher sales of unit-linked products, partly offset by lower sales of guaranteed interest products Combined ratio amounted to an excellent 90% in FY22 (90% in FY21) 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#28KBC Belgium BU (4) | Opex & impairments OPERATING EXPENSES in m EUR 821 Bank tax 311 538 520 -6- 558 901 354 614 554 577 fala Operating 509 expenses 532 547 558 578 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 ASSET IMPAIRMENT in m EUR Highlights 43 21 7 36 34 29 8 22 7 -21 -17 -15 -8 -58 -25 -20 -66 -42 -169 -43 -65 -56 Other impairments ECL for geopolitical, emerging and Covid risks Impairments on financial assets at AC and FVOCI 1Q21 2Q21 -139 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 28 of 74 Opex excl. bank tax: +6% q-o-q and +10% y-o-y • • Operating expenses without bank taxes increased by 6% q-o-q due mainly to: o Higher ICT costs 。 Seasonally higher marketing and professional fee expenses partly offset by: Lower facilities costs Operating expenses without bank taxes rose by 10% y-o-y due chiefly to higher staff expenses (due largely to wage indexation, partly offset by less FTEs), higher ICT cost, higher marketing expenses and higher professional fees Cost/income ratio adjusted for specific items: 53% in FY22 (51% in FY21) ■ Loan loss impairment charges of 38m EUR in 4Q22 (compared with 21m EUR in 3Q22). Besides an additional 4m EUR impairment charge for geopolitical and emerging risks, there were loan loss impairment charges mainly in the retail & SME portfolios and corporates in foreign branches. Credit cost ratio amounted to 3 bps in FY22 (-26 bps in FY21) ■ 5m EUR impairment on 'other' (mainly ICT impairments) Impaired loans ratio amounted to 1.9%, 0.9% of which over 90 days past due Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#29KBC NET RESULT in m EUR Czech Republic BU (1) | Net result & NII 237 209 198 207 197 168 159 123 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET INTEREST INCOME in m EUR 326 340 292 325 323 215 220 244 1Q21 2Q21 29 of 74 ■ Net result of 159m EUR in 4Q22 -20% q-o-q excluding FX effect due mainly to lower net interest income, lower net fee & commission income, lower net result from financial instruments at fair value, lower non-life and life insurance result (both incurred higher technical charges due to a release of technical provisions in 3Q22) and higher costs, partly offset by higher net other income and slightly lower net impairment charges Customer deposits (excluding debt certificates and repos) rose by 7% y-o-y, while customer loans rose by 5% y-o-y ■ Net interest income -2% q-o-q and +6% y-o-y (both excl. FX effect) Q-o-q decrease was mainly the result of higher pass-through on the deposit side and pressure on commercial loan margins (mainly on mortgages and corporate loans), partly offset by increased income related to funding, higher positive impact of ALM FX swaps and slightly higher NII on insurance bond portfolio Y-o-y increase was primarily due to increasing interest rates, growth in loan and deposit volumes and increased income related to funding, despite pressure on commercial loan margins and higher pass-through on the deposit side ■ Net interest margin Fell by 5 bps q-o-q and rose by 11 bps y-o-y for the reasons mentioned above and an increase in the interest-bearing assets (denominator), both q-o-q and y-o-y • 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 NET INTEREST MARGIN in % 1.99% 1.97% 2.08% 2.29% 2.65% 2.70% 2.45% 2.40% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits** Volume 35bn EUR 20bn EUR 49bn EUR Growth q-o-q* Growth y-o-y 0% +5% +1% +4% +1% +7% * Non-annualised ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications. *** Customer deposits, excluding debt certificates and repos. Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#30KBC Czech Republic BU (2) | Other income lines & cross-selling NET FEE & COMMISSION INCOME in m EUR 50 54 56 58 54 55 57 44 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 CROSS-SELLING RATIOS in % MORTGAGE & PROPERTY 50% 54% 55% ■ Net fee & commission income • -24% q-o-q and -22% y-o-y (both excl. FX effect) 30 of 74 • The lower q-o-q net F&C income was mainly the result of seasonally higher commissions paid linked to banking products, higher fee expenses in Retail and lower fees from payment services, partly offset by higher management fees and network income The lower y-o-y net F&C income was driven chiefly by lower management and entry fees, higher fee expenses in Retail and higher distribution costs linked to insurance products, partly offset by higher network income and higher securities-related fees ■ Assets under management • • 15.1bn EUR +5% q-o-q due to net inflows (+1%) and the positive market performance (+4%) +7% y-o-y due to net inflows (+11%) and the negative market performance (-3%) Insurance MORTGAGE & LIFE RISK CONS. FIN. & LIFE RISK • Insurance premium income (gross earned premium): 150m EUR 48% 46% 40% 42% 44% 39% 2020 2021 2022 2020 2021 2022 2020 2021 2022 Non-life premium income (106m EUR) +15% y-o-y excluding FX effect, due to growth in all products o Life premium income (44m EUR) -1% q-o-q and -11% y-o-y, excluding FX effect. The q-o-q decrease was entirely the result of lower sales of unit-linked products An excellent combined ratio of 83% in FY22 (87% in FY21) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#31KBC Czech Republic BU (3) Opex & impairments OPERATING EXPENSES in m EUR 270 238 Bank tax 225 50 60 214 204 206 191 183 0 1 237 Operating expenses 190 203 210 206 213 174 183 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 ASSET IMPAIRMENT in m EUR 2- -15 3 29 12 3 -9 -13 -30 -17 -12 -4 -56 -14 -23 -50 -50 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 30 29 29 48 O 16 -17 Opex excl. bank tax: +10% q-o-q and +12% y-o-y, excl. FX effect Q-o-q increase was due mainly to: 31 of 74 。 Higher staff expenses (wage drift) o Higher ICT cost o Higher marketing costs partly offset by: 。 Lower professional fees Y-o-y increase was chiefly the result of higher ICT costs, higher marketing expenses and higher depreciations, partly offset by lower professional fees and lower staff expenses, despite high inflation Adjusted for specific items, C/I ratio amounted to roughly 48% in FY22 (53% in FY21) ■ Loan loss and other impairment Loan loss impairment charges of 23m EUR in 4Q22 compared with 31m EUR in 3Q22. Besides an additional 16m EUR net impairment charge for geopolitical and emerging risks, there were loan loss impairment charges in 4Q22 mainly in the corporate and consumer finance portfolios Credit cost ratio amounted to 0.13% in FY22 (-0.42% in FY21) Other impairments ECL for geopolitical, emerging and Covid risks Impairments on financial assets at AC and FVOCI 3Q22 4Q22 . 6m EUR impairment on 'other' (mainly goodwill) • Impaired loans ratio amounted to 1.7%, 0.8% of which over 90 days past due Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#32KBC NET RESULT in m EUR International markets BU (1) | Highlights 169 147 48 61 牛 32 of 74 ■ Net result of 169m EUR (Slovakia 17m EUR, Hungary 104m EUR, Bulgaria 48m EUR) ■ Highlights (q-o-q) • Higher net interest income. NIM 3.18% in 4Q22 (+7 bps q-o-q and +49 bps y-o-y) 140 30 33 13 56 88 74 Bulgaria 22 29 17 52 104 • Ireland 8 75 62 62 46 35 30 Hungary 43 Slovakia 15 22 29 18 22 28 24 17 -6. • -37 -282 -158 1Q21 2Q21 3Q21 4Q21 1Q22* 2Q22 3Q22 4Q22 *As of 1Q 2022, KBC Ireland has been shifted from International Markets Business Unit to Group Centre. No restatements have been made. Organic volume trend Stable net fee and commission income Higher result from financial instruments at fair value Lower net other income An excellent combined ratio of 85% in FY22 (86% in FY21) Lower non-life insurance sales and higher life insurance sales Higher operating expenses Higher net impairment charges Total loans** o/w retail mortgages Volume 25bn EUR 10bn EUR Customer deposits*** 30bn EUR AuM 6.9bn EUR Growth q-o-q* Growth y-o-y +2% +17% +3% +16% +4% +8% +5% +6% * Non-annualised ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications Customer deposits, excluding debt certificates and repos *** Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#33KBC NET RESULT in m EUR International markets BU (2) | Slovakia 29 28 24 22 22 18 17 15 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits*** Volume 11bn EUR 6bn EUR 8bn EUR Growth q-o-q* +3% Growth y-o-y +15% +3% +19% +2% +10% * Non-annualised ■ Net result of 17m EUR in 4Q22 ☐ ■ Highlights (q-o-q) 33 牛 of 74 • • • Higher net interest income due to higher reinvestment yields, good loan and deposit volume growth, higher commercial loan margins (in all segments, except consumer finance) and lower funding costs Higher net fee & commission income due chiefly to higher entry fees, higher network income and higher payment-related fees Lower result from financial instruments at fair value (mainly due to a negative change in ALM derivatives) Lower net other income due to a -7m EUR one-off provision for legacy legal files An excellent combined ratio of 87% in FY22 (92% in FY21) Slightly lower non-life and life insurance sales Higher operating expenses due mainly to higher staff expenses, higher facilities costs and higher depreciations Higher net impairment charges, due mainly to an additional 12m EUR impairment for geopolitical and emerging risks, partly offset by loan loss impairment releases (mainly for SMEs). Credit cost ratio of 0.17% in FY22 (-0.16% in FY21) ■ Volume trend • Total customer loans rose by 3% q-o-q (especially growth in corporate loans and mortgages) and by 15% y-o-y (strong loan growth in all segments) Total customer deposits rose by 2% q-o-q (due mainly to strong corporate deposit growth) and by 10% y-o-y (due chiefly to strong corporate deposit growth) ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications Customer deposits, excluding debt certificates and repos *** Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#34KBC NET RESULT in m EUR International markets BU (3) | Hungary 75 62 43 46 35 104 62 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits*** Volume 6bn EUR 2bn EUR 9bn EUR Growth q-o-q* Growth y-o-y +1% +18% +0% +1% +3% +6% * Non-annualised ■ Net result of 104m EUR in 4Q22 ■ Highlights (q-o-q) 34 of 74 • • • • Higher net interest income excluding FX effect due chiefly to increasing interest rates, loan and deposit volume growth, partly offset by pressure on commercial loan margins Higher net fee and commission income excluding FX effect driven mainly by higher payment-related fees Higher net results from financial instruments at fair value (strong dealing room result) An excellent combined ratio of 87% in FY22 (87% in FY21) Stable operating expenses excluding FX effect. Higher ICT and facilities costs, and higher staff and professional fee expenses were offset by lower bank taxes (14m EUR recovery in 4Q22 of the extraordinary DGS fee related to winding down Sberbank HU in 1Q22) Lower net loan loss impairment charges. Credit cost ratio of 0.42% in FY22 (-0.34% in FY21) 25m EUR modification losses related to the interest cap regulation in Hungary (19m EUR for SMEs and an additional 6m EUR for retail mortgages) and 5m EUR impairments on other assets ■ Volume trend • Total customer loans rose by 1% q-o-q and by 18% y-o-y (the latter due mainly to strong growth in corporate loans and consumer loans) Total customer deposits rose by 3% q-o-q and by 6% y-o-y (the latter due chiefly to strong corporate deposit growth) ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications Customer deposits, excluding debt certificates and repos *** Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#35KBC NET RESULT in m EUR International markets BU (4) | Bulgaria Raiffeisen Bank BG 25 23 36 30 33 29 30 25 22 17 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits*** Volume 9bn EUR 2bn EUR 12bn EUR Growth q-o-q* +3% Growth y-o-y +19% +5% +23% +6% +10% * Non-annualised 35 of 74 ■ Net result of 48m EUR in 4Q22, of which 23m EUR from the consolidation of the acquired Raiffeisenbank Bulgaria ■ Highlights (q-o-q) • • • Higher net interest income was driven mainly by increasing interest rates and strong loan and deposit volume growth in all segments, partly offset by pressure on commercial margins Lower net fee and commission income due mainly to lower management fees, seasonally lower payment-related fees and network income Stable net results from financial instruments at fair value and higher net other income An excellent combined ratio of 83% in FY22 (82% in FY21) Stable non-life insurance sales and sharply higher life insurance sales Higher operating expenses due mainly to higher staff, marketing and professional fee expenses, and higher facilities costs. Note that Raiffeisenbank Bulgaria contributed 24m EUR in 4Q22 versus 26m EUR in 3Q22 (of which roughly 5m EUR one-off integration costs in both quarters) Higher net loan loss impairment charges due to a 7m EUR additional impairment for geopolitical and emerging risks (versus 1m EUR in 3Q22) and 7m EUR net impairment charges mainly for retail and SMEs. Credit cost ratio of 0.43% in FY22 (-0.06% in FY21) 3m EUR impairment on 'other' ■ Volume trend • Total customer loans rose by 3% q-o-q and by 19% y-o-y (due to growth in all segments, both q-o-q and y-o-y, except for consumer finance loans q-o-q) Total customer deposits rose by 6% q-o-q (due mainly to higher corporate deposits) and by 10% y-o-y (due to growth in all segments) ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding FX, consolidation adjustments and reclassifications Customer deposits, excluding debt certificates and repos *** Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#36KBC NET RESULT in m EUR Group Centre BU (1) | Highlights 33 KBC Ireland 21 -34 -39 -32 -68 -35 -15 --2- -11 -42 -41 -53 -49 -35 -77 1Q21 2Q21 3Q21 4Q21 1Q22* 2Q22 3Q22 4Q22 *As of 1Q 2022, KBC Ireland has been shifted from International Markets Business Unit to Group Centre. No restatements have been made. 36 of 74 ■ Net result of -35m EUR in 4Q22, of which +33m EUR from Ireland The net result for the Group Centre comprises the results from activities and/or decisions specifically made for group purposes (see table below for components) and, as of 1Q22, Ireland ■ Highlights (q-o-q) Excluding Ireland (see next slide), the q-o-q lower result of Group Centre was attributable mainly to: 。 Lower net interest income due mainly to: Higher funding costs of bonds and participations driven by increased EUR rates ✓ Higher subordinated debt and wholesale funding costs due to new issuances in 4Q22 o Lower non-life insurance result o Higher costs BREAKDOWN OF NET RESULT AT GROUP CENTRE BU in m EUR Group item (ongoing business) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 -34 -37 -50 -81 -34 -37 -33 -92 Operating expenses of group activities Capital and treasury management -16 -11 -17 -42 -21 -14 -22 -40 -4 -3 0 4 -16 5 -17 Holding of participations Group Re Other Ongoing results of divestments and companies in run-down Total 1 0 1 29 -12 -10 -15 -32 18 5 -5 17 0 7 2 -33 -25 -27 -85 -4 -5 -3 0 -5 -3 4 -15 -4 22 22 57 -35 -42 -53 -77 -49 -41 -11 -35 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#37KBC NET RESULT in m EUR 8 Group Centre BU (2) | Ireland 13 -282 -37 -15 21 21 33 33 • 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Organic volume trend Total loans** o/w retail mortgages Customer deposits*** Volume 8bn EUR 8bn EUR Growth q-o-q* Growth y-o-y -6% -14% -6% -14% 2bn EUR -20% -52% 37 of 74 ■ Net result of 33m EUR in 4Q22 Highlights (q-o-9) • Higher net interest income due mainly to higher reinvestment yields thanks to increasing interest rates and lower funding costs largely offset by a decrease of lending income due to a loan & deposit volume reduction and margin pressure Lower expenses due mainly to lower one-off costs as a result of the sales transaction in Ireland in 4Q22 (-5m EUR in 4Q22 versus -15m EUR in 3Q22) and lower ICT costs in 4Q22, partly offset by higher depreciations Net loan loss impairment reversals in 4Q22. Credit cost ratio of -0.07% in FY22 (1.43% in FY21) A positive one-off tax effect of 16m EUR as a result of the sales transaction in Ireland ■ Volume trend • Total customer loans fell by 6% q-o-q and by 14% y-o-y as a result of increased redemptions in 4Q22 Total customer deposits decreased by 20% q-o-q and by 52% y-o-y, as customers ended the banking relationship (as a result of the withdrawal from Ireland) * Non-annualised ** Loans to customers, excluding reverse repos (and bonds). Growth figures are excluding the sold NPL portfolio, FX, consolidation adjustments and reclassifications Customer deposits, excluding debt certificates and repos *** Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#38KBC NET RESULT in m EUR FY 2022 | Net result amounted to 2 864m EUR 2,614 2,864 47 Raiffeisenbank Bulgaria +10% 2,614 2,817 2021 2022 FY22 38 of 74 ■ Net result rose by 10% y-o-y to 2,864m EUR in 2022 (and +8% y-o-y excluding Raiffeisenbank Bulgaria), mainly as a result of the following • • Revenues rose by 14% y-o-y (and +13% y-o-y excluding Raiffeisenbank Bulgaria) mainly due to higher net interest income, net result from FIFV, higher result from insurance (both life and non-life), higher dividend income and slightly higher net fee and commission income, partly offset by lower net other income and lower net realised result from debt instruments at fair value through OCI Operating expenses excluding bank taxes rose by 8% y-o-y (and +6% y-o-y excluding Raiffeisenbank Bulgaria) to 4.17bn EUR, in line with the guided 4.15bn EUR. Total bank taxes (including ESRF contribution) increased from 525m EUR in FY21 to 646m EUR in FY22 Net impairment charges amounted to 284m EUR (compared with net impairment releases of 261m EUR in FY21). This was attributable chiefly to: 。 A 413m EUR geopolitical & emerging risk buffer A 255m EUR reversal of collective Covid-19 impairments in FY22 One-off loan loss impairments of 17m EUR as a result of the two pending sales transactions in Ireland o 21m EUR loan loss provision reversals on some individual files o Impairment of 130m EUR on 'other', of which o 63m EUR modification losses in Hungary o A 24m EUR one-off as a result of the two pending sales transactions in Ireland 。 A 38m EUR impairment, mainly on (in)tangibles (in other countries besides Ireland) o A 5m EUR goodwill impairment in CZ BU Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#39KBC FY 2022 | Higher NII and NIM FY22 39 of 74 NET INTEREST INCOME in m EUR +16% 5,161 4,451 ☐☐ 70 398 428 Insurance NII Raiffeisenbank Bulgaria 4,663 Banking (incl. Holding) 4,053 2021 2022 ■ Net interest income (5 161m EUR) • • Net interest income rose by 16% y-o-y due mainly to: o Increasing reinvestment yield in all core countries o Good loan and deposit volume growth o Increased income related to funding (increased term deposits at better margins and slightly positive impact of TLTRO3) o Consolidation of Raiffeisen Bank Bulgaria as of 3Q22 (70m EUR NII in 2H22) o Higher NII on insurance bond portfolio (due mainly to inflation-linked bonds) 。 Higher netted positive impact of ALM FX swaps o The appreciation of the CZK versus the EUR partly offset by: o Loan margin pressure on the outstanding portfolio in almost all countries o Less positive impact of charging of negative interest rates on current accounts held by corporate entities and SMEs and less positive impact of ECB deposit tiering 。 The depreciation of the HUF versus the EUR Loan volumes increased by 7% y-o-y, while customer deposits excluding debt certificates and repos rose by 8% y-o-y ■ Net interest margin (1.96%) Increased by 15 bps y-o-y for the reasons mentioned above and despite an increase of the interest-bearing assets (denominator) NET INTEREST MARGIN in %, calculated excl. the dealing room and the net positive impact of ALM FX swaps & repos 1.81% +15bps 1.96% Highlights 2021 2022 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Organic volume trend Total loans* Volume Growth y-o-y 186bn +7% o/w retail mortgages 82bn +4% Customer deposits** 226bn +8% * Loans to customers, excluding reverse repos (and bonds), including Ireland (under IFRS 5) and Raiffeisenbank Bulgaria. Growth figures are excluding FX, consolidation adjustments and reclassifications. ** Customer deposits, excluding debt certificates and repos, including Ireland (under IFRS 5) and Raiffeisenbank BG. Company profile KBC Strategy Sustainability Asset quality MREL & Funding#40KBC FY 2022 | Higher net fee and commission income and lower AUM FY22 40 of 74 NET FEE & COMMISSION INCOME in m EUR 1,836 1,847 36 +1% Raiffeisenbank Bulgaria 950 985 Banking services 1,196 1,175 AM services -311 -349 Distribution 2021 2022 ASSETS UNDER MANAGEMENT in bn EUR Highlights 236 206 47 -13% 40 Investment advice 69 60 Fund-of-Funds 23 Group assets & 19 Pension fund 98 87 Direct Client Money 2021 2022 ■ Net fee and commission income (1,847m EUR) • Increased by 1% y-o-y o Net F&C from Asset Management Services decreased by 2% y-o-y driven entirely by lower entry fees. Management fees roughly stabilised y-o-y o Net F&C income from banking services increased by 7% y-o-y driven mainly by higher fees from payment services, higher network income and higher fees from credit files & bank guarantees, partly offset by lower securities-related fees. Net F&C income from banking services rose by 4% y-o-y on a comparable basis (excluding the +36m EUR impact in 2H22 from the consolidation of Raiffeisenbank Bulgaria) o Distribution costs rose by 12% y-o-y due chiefly to higher commissions paid linked to banking products and increased non-life insurance sales ■ Assets under management (206bn EUR) • Decreased by 13% y-o-y due entirely to the market performance (-15%), partly offset by net inflows (+2%) The mutual fund business has seen 2.9bn EUR net inflows in higher-margin direct client money in FY22 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#41KBC Non-life and life insurance sales significantly up y-o-y NON-LIFE SALES (GROSS WRITTEN PREMIUMS) in m EUR 1,920 +8% 2,083 2021 2022 COMBINED RATIO (NON-LIFE) in % 89% 89% 2022 2021 LIFE SALES in m EUR 1,964 2,085 +6% 1,022 996 Guaranteed interest products 942 1,089 Unit-linked products 2022 2021 VNB* LIFE in m EUR Highlights -10% 288 260 2021 2022 7.7% 8.9% FY22 41 of 74 ■ Sales of non-life insurance products Up by 8% y-o-y thanks to growth in all classes ■ The non-life combined ratio for FY22 amounted to an excellent 89% (89% in FY21). This is the result of : • 8% y-o-y earned premium growth in FY22 4% y-o-y higher technical charges in FY22 due mainly to: o Higher normal claims and more negative impact of parameter updates partly offset by: 。 Lower major claims and lower storm claims Lower ceded reinsurance result (down 26m EUR y-o-y) Note that the technical charges for Life and Non-Life (after reinsurance) in 2022 included a release of technical provisions of respectively 31m EUR and 10m EUR, booked in the Czech Republic, as a result of reassessing the confidence level of the technical provisions ■ Sales of life insurance products Up by 6% y-o-y o The 16% y-o-y increase in sales of unit-linked products was mainly the result of the successful launch of new structured funds in Belgium o Sales of guaranteed interest products decreased by 3% y-o-y Sales of unit-linked products accounted for 52% of total life insurance sales ■ Value of New Business (VNB) • • Decrease y-o-y mainly driven by lower fee income on unit-linked products in Belgium, partly offset by higher interest rates The VNB/PVNBP increased to 8.9% due to the higher margin on guaranteed interest rate products, driven by increasing interest rates * VNB = present value of all future profit attributable to the shareholders from the new life insurance policies written during the year The VNB of KBC Group includes the expected future income generated by parties other than KBC Insurance, but within KBC Group (e.g. KBC Bank & KBC Asset Management) arising from the sales of life insurance business. In 2022, this income amounted to 102m EUR (compared with 124m EUR in 2021) ** VNB/PVNBP = VNB compared to the Present Value of New Business Premiums. This ratio reflects the margin earned on total premiums BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding VNB/PVNBP Profit & Loss Capital & Liquidity Looking forward#42KBC FIFV in m EUR FY 2022 | Higher FV gains and lower net other income FY22 406 145 245 Dealing room 162 67 80 113 95 & other income -14 \M2M ALM -197 derivatives MVA/CVA/FVA Overlay insurance ■ Net gains from financial instruments at fair value (406m EUR) Increased y-o-y attributable to o Higher dealing room o A less negative change in ALM derivatives o A positive change in market, credit and funding value adjustments partly offset by: 。 Lower net result on equity instruments (insurance) & other income 2021 NET OTHER INCOME in m EUR 223 -15% 2022 190 2021 2022 42 of 74 ■ Net other income (190m EUR) • Decreased from 223m EUR in FY21 to 190m EUR in FY22. This is somewhat lower than the normal run rate of 200m EUR per year due mainly to realised losses on the sale of bonds, largely offset by some positive one-off items (including a 68m EUR realised gain on the sale of a real estate subsidiary at KBC Insurance) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#43FY 2022 | Costs in line with guidance KBC OPERATING EXPENSES in m EUR 4,396 525 +10% 4,818 646 51 Bank tax +6% FY22 43 of 74 Operating expenses excluding bank taxes rose by 8% y-o-y (and +6% y-o-y excluding Raiffeisenbank Bulgaria) to 4.17bn EUR, in line with the guided 4.15bn EUR Raiffeisen Bank Bulgaria Operating expenses in FY22 excluding bank taxes, changes in the consolidation scope, one-offs and FX effect rose by 7% y-o-y due mainly to higher staff expenses (wage inflation), higher ICT costs, higher marketing and professional fee expenses 3,870 4,121 Opex excl BT 2021 2022 ■ The C/I ratio excluding bank taxes amounted to 48% in FY22 (51% in FY21) Total bank taxes (including ESRF contribution) increased from 525m EUR in FY21 to 646m EUR in FY22 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#44KBC FY 2022 | Net impairment charges and excellent CCR ASSET IMPAIRMENT in m EUR; negative sign is a release 284 130 Other impairments 73 160 ECL for geopolitical, 158 -4 assets at AC and FVOCI -494 emerging and Covid risks Impairments on financial FY22 44 of 74 ■ Net impairment charges amounted to 284m EUR (compared with net impairment • • releases of 261m EUR in FY21). This was attributable chiefly to A 413m EUR geopolitical & emerging risk buffer A 255m EUR reversal of collective Covid-19 impairments in FY22 One-off loan loss impairments of 17m EUR as a result of the two pending sales transactions in Ireland 21m EUR net loan loss provision reversals on some individual files Impairment of 130m EUR on 'other', of which o 63m EUR modification losses in Hungary o A 24m EUR one-off as a result of the two pending sales transactions in Ireland 。 A 38m EUR impairment, mainly on (in)tangibles (in other countries besides Ireland) o A 5m EUR goodwill impairment in CZ BU -261 2021 2022 CREDIT COST RATIO ECL for geopolitical, emerging and Covid risks in % CCR without ECL for geopolitical, emerging and Covid risks 0.60% 0.23% 0.44% 0.09% 0.12% 0.09% 0.08% 0.16% 0.08% 0.00% -0.06% -0.04% -0.27% FY15 FY16 FY17 FY18 FY19 FY20 -0.18% FY21 FY22 IMPAIRED LOANS RATIO in % ■ The credit cost ratio in FY22 amounted to: • Obps (9bps in FY21) without ECL for geopolitical, emerging and Covid risks 8bps (-18bps in FY21) with ECL for geopolitical, emerging and Covid risks The impaired loans ratio improved to 2.1% (1.1% of which over 90 days past due) 8.6% 7.2% 6.0% 4.3% 3.5% 3.3% 2.9% FY15 FY16 FY17 FY18 FY19 FY20 FY21 2.1% FY22 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding Highlights#45KBC Highlights Company profile KBC Group in a nutshell (1) We want to be among Europe's best performing financial institutions! By achieving this, KBC wants to be the reference in bank-insurance in its core markets We are a leading European financial group with a focus on providing bank-insurance products and services to retail, SME and mid-cap clients, in our core countries: Belgium, Czech Republic, Slovakia, Hungary and Bulgaria 45 of 74 • As a result of the withdrawal from Ireland, arising M&A opportunities beyond our core markets may be assessed (for approval of the Board of Directors) taking into account very strict strategic, financial, operational & risk criteria Diversified and strong business performance • geographically Mature markets (BE, CZ) versus developing markets (SK, HU, BG) Robust market position in all key markets & strong trends in loan and deposit growth and from a business point of view An integrated bank-insurer Strongly developed & tailored AM business Strong value creator with good operational results through the cycle Unique selling proposition: in-depth knowledge of local markets and profound relationships with clients Integrated model creates cost synergies and results in a complementary & optimised product offering Broadening 'one-stop shop' offering to our clients n 件 KBC GROUP TOPLINE DIVERSIFICATION Diversification Diversificatio Synergy in % Synergy i Customer Centricity Customer Centricity 47% 48% 47% 50% 49% Other income 53% 52% 53% 50% 51% Net interest income 2018 2019 2020 2021 2022 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#46KBC Company profile KBC Group in a nutshell (2) C/I ratio* 54% | FY22 55% | FY21 high profitability Combined ratio 89% FY22 89% | FY21 Net result 2,864m | FY22 2,614m | FY21 solid capital position CET1 RATIO (FULLY LOADED, DANISH COMPROMISE) in % 46 of 74 17.1% 17.6% 15.8% 16.3% 16.0% 15.5% 15.4% * Adjusted for specific items RETURN ON EQUITY in % 18% 17% 16% 14% 15% 14% 8% 2016 2017 2018 2019 2020* 2021** 2022 11% when adjusted for the collective covid impairments when excluding the one-off items due to the pending sales transactions in Ireland CET1 GENERATION BEFORE ANY DEPLOYMENT in bps 277 279 271 251 250 260 141 2016 2017 2018 2019 2020* 2021 2022 202bps when adjusted for the collective covid-19 impairments Highlights 11.31% Overall Capital Requirement (OCR) FY16 FY17 FY18 FY19 FY20 FY21 FY22 robust liquidity NSFR LCR 136% | FY22 152% | FY22 148% | FY21 167% | FY21 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#47KBC Company profile KBC Group in a nutshell (3) Dividend policy & capital distribution (as of 2022) Shareholder structure (as at end FY22) 47 of 74 • • • We aim to be amongst the better capitalised financial institutions in Europe. As a consequence, the dividend policy of KBC Group is tailored to that purpose. Each year, the Board of Directors will decide, at its discretion, on the total dividend based on the assessment of risks, forward looking profitability and strategic opportunities Payout ratio policy (i.e. dividend + AT1 coupon) of at least 50% of consolidated profit of the accounting year Interim dividend of 1 EUR per share in November of each accounting year as an advance on the total dividend On top of the payout ratio of at least 50% of consolidated profit, each year (when announcing the full year results), the Board of Directors will take a decision, at its discretion, on the distribution of the capital above 15.0% fully loaded CET1 ratio, so-called surplus capital. The distribution of this surplus capital can be in the form of a cash dividend, a share buy-back or a combination of both From the moment Basel IV will apply (as from 1 January 2025 at the earliest), the capital deployment plan will be updated MRBB Other core 7.3% Cera 11.5% 3.7% KBC Ancora 18.6% 58.9% Free float Roughly 41% of KBC shares are owned by a syndicate of core shareholders, providing continuity to pursue long-term strategic goals. Committed shareholders include the Cera/KBC Ancora Group (co- operative investment company), the Belgian farmers' association (MRBB) and a group of Belgian industrialist families The free float is held mainly by a large variety of international institutional investors Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#48KBC Company profile Well-defined core markets BELGIUM BU 61% of assets 3.8m clients GDP GROWTH in %, KBC Economics debt to GDP ratio 106% 420 branches 6.2% 3.1% 0.2% 2021 2022e 2023e MARKET SHARE in %, end 2022 28% 20% 12% 9% loans and investment deposits funds life insurance non-life insurance 117bn EUR loans 145bn EUR deposits CZECH REPUBLIC BU 48 of 74 INTERNATIONAL MARKETS BU SK 4% of assets 0.8m clients 110 branches HU 4% of assets 1.6m clients 195 branches 11bn EUR loans 8bn EUR deposits 6bn EUR loans 9bn EUR deposits BG 3% of assets 2.4m clients 266 branches 9bn EUR loans 12bn EUR deposits GDP GROWTH 2021-2022e-2023e in %, KBC Economics 7.1% 4.9% 3.9% 3.5% 3.0% 0.3% 1.5% 0.6% 0.7% SK debt/GDP 62% HU debt/GDP 74% BG debt/GDP 23% MARKET SHARE in %, end 2022 GDP GROWTH in %, KBC Economics 20% of assets 4.3m clients debt to GDP ratio 44% 26% 19% 12% 2% 11% 11% 3% 14% 12% 7% 5% 7% 201 branches 3.5% 2.5% SK HU 0.3% 2021 2022e 2023e L&D funds life non- L&D funds life non- L&D funds life non- life life life * Pro forma incl. acquisition of Raiffeisenbank Bulgaria BG* MARKET SHARE in %, end 2022 21% 24% loans and investment deposits funds 7% life insurance 9% non-life insurance 35bn EUR loans 49bn EUR deposits Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#49KBC Strategy Differently: the next level Differently: NEXT LEVEL We diversify our income Bank-insurance remains key However, we reduce our dependency on interest income by increasing our insurance income and our fee income оо We build our future capabilities The future is continuously changing So we have to adapt quickly This means we prepare ourselves by acting on trends in our daily bank-insurance activities and through small investments and experiments We make smart decisions so we don't waste money KBC bank-insurance role in society هي sustainable profitable growth pearl client centricity Go We think local. We create together We always keep the needs of our local clients in mind We avoid duplication by copying and sharing ideas We develop shared solutions in communities And we take advantage of our scale in non-client facing activities Because collaboration allows us to deliver a better, faster service to our clients Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view We think client. We act digital We design for a digital world even when we are selling face to face This digital way of working makes us even more responsive and sets us apart from the competition Our clients want simple, hassle-free solutions So we simplify our processes and procedures to facilitate that We partner We improve our solutions to meet our dients' needs by collaborating with partners, like fintechs and even competitors and creating an IT environment partners can easily plug in and out of We embrace artificial intelligence We change our interaction with our dients over time Technical innovation will help us advise our clients even better Because human interaction and artificial intelligence reinforce each other 49 of 74 Company profile KBC Strategy Sustainability Asset quality MREL & Funding#50KBC Strategy Powered by PEARL Differently: NEXT LEVEL RESULT-DRIVEN Responsiveness Local Embeddedness Accountability GROUP WIDE COLLABORATION RESPECTFUL Performance Empowerment 'Why would you build exactly the same thing in your country, when you have the solution next door?' Johan Thijs 50 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#51KBC Strategy Bank-insurance+ Differently: NEXT LEVEL We move beyond traditional bank-insurance towards bank-insurance + providing not only traditional bank- insurance solutions but also less traditional non- financial solutions that impact the financial wellness of retail customers or the future of their business. Data driven organisation Level 5 Data driven organisation: Fully integrated digital first distribution approach based on a solution driven and Al enabled bank- insurance. Integrated distribution and operation Level 4 Integrated distribution Level 3 Acting as a single operational company: bank and insurance company working under unified governance, realizing commercial and non-commercial synergies. Acting as a single operational company: bank and insurance company working under unified governance, realizing commercial synergies. Exclusive distribution Level 2 Bank branches sell insurance products from intra-group insurance companies as additional source of income. Non-exclusive Distribution Level 1 Bank branches selling insurance products of third party insurers as additional source of income. 51 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#52KBC Strategy Monitored through the KBC performance diamond Differently: NEXT LEVEL STAKE- HOLDERS PROFIT LIQUIDITY THE RISK FRAMEWORK CAPITAL The performance diamond defines, within the limits of the risk management framework, the targets for KBC Group and for all the business units for 4 performance dimensions: NET PROFIT CAPITAL LIQUIDITY STAKEHOLDERS Clients, staff, society, shareholders 52 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#53KBC KATE KBC's hyper personalised and trusted digital assistant 帅 Kate 'No hassle, no friction, zero delay' PERSONALISED & DATA DRIVEN The interaction between the customer and Kate will be triggered by data analysis (approval granted by customer). Kate will be trained on the basis of the customer's profile, preferences and activities DIGITAL FIRST & E2E We will offer the client a frictionless End2End digital process and in doing so make bank/insurance simple and hassle free SERVING: SECURE & FRICTIONLESS Kate will help the client saving time and/or money, focusing more on the convenience factor. Kate will also serve the client regarding security and fraud Johan Thijs RELEVANT & VALUABLE OFFER Kate will only propose offers where sufficient added value is shown or when she can serve the client in an important moment in the client's live میرا AT THE RIGHT TIME Lead journeys driven by time or location are preferably taken care of by Kate, as notifications linked to a specific location or specifying moment in time are perceived as highly personal VOLUME We want all our clients to meet Kate as much as possible. Kate will allow us to reach out to a sufficient volume of clients, in terms of transactions and in terms of number of targetable audience 53 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#54KATE Four flavors KBC 111 Kate4MassRetail Kate is a personal virtual assistant that engages with our retail customers to save them time and money. Kate engages both in a reactive way (You2Kate) and a proactive way (Kate2You). Growing number of retail USE CASES: BE: 258, CZ: 154, IM: 135 2 892 364 clients Kate AUTONOMY 56% BE 51% CZ Available in all KBC's core countries! Kate Group Platform already in contact with Kate (BE+CZ+IM) We do not build Kate for every country individually. Kate is built once at a group level and then deployed to all core countries (Kate in a box). Technically, we have set up a shared infrastructure on the cloud that allows us to share use cases, code and IT components maximally. Furthermore, KBC strives to have a common user interface and persona, so Kate looks and feels the same everywhere. Finally, everything that can be developed at group level is governed by a specific steering committee that develops and maintains the group Kate infrastructure. Four flavors, 帅 one Kate use cases for Micro-SME's: 21 in BE & 35 in CZ 'KATE IN A BOX' delivered to all core countries Total of 580K Leads picked up by employees in CZ & BE in 2022 Kate4Business Kate will also engage with our self-employed, micro-SME, SME and corporate clients with relevant and actionable insights that are personal and proactive. Already available in BE and CZ in a mobile environment. Web environment to follow soon Kate4Employees Kate will also have an impact on our employees: Kate will provide commercial steering towards our work force, she will augment our workforce to better serve our clients, Kate will serve as a back-up for our network and will automate certain administrative tasks. In doing so, employees can focus on providing even more added value to our client. This will also give tools to management to better coach employees and plan ahead. Already available in CZ and BE To be launched in HU, BG and SK (2H23) 54 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#55KBC KATE A data-driven organisation with KATE at the core Kate is more than an interface towards customers. It also refers to the Al-enhanced software at our center: the Kate brain. The Kate brain will be the driving force behind data-driven decision making, product design and development, marketing, commercial and sales steering and much more. So, Kate is not only steering the interaction with customer- facing touchpoints (digital, physical, remote) but also the product factories and decision makers by providing relevant insights. The Kate brain is fed by our own banking and insurance data- sources but also by data sources from third party services, resulting in seamlessly integrated, instant (STP) and scalable processes. Very important in this are the feedbacks loops from all interactions to make sure Kate is learning and getting smarter, resulting in better decision making. The main purpose remains the same: happy customers. As a data-driven company we remain guided by our client-centric vision. Another upside of being Al-powered and solution-driven, is that we not only save time (cost reductions), not only for the customer, and we improve our sales efforts (better sales productivity). Kate2You You2Kate Kate 3rd party Brokers 1 Data " L 55 of 74 "Feed the I machine" Data-driven one-to- one marketing Kate "Feed the machine" I I Kate4Employees Data-driven ... Data- driven Solution Design Insuranata O in O torporata dara 0 KBC Seamlessly integrated instant & scalable processes brain berking det ° parata dars O Data- driven decision making Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#56KBC KATE From basic chatbot to hyper-personal digital assistant Sales effectiveness, operational efficiency, customer experience LEVEL 4: Kate offers hyper-personal solutions at the right time Hyper- personal & contextual LEVEL 3: Kate proactively offers actionable end-to-end solutions to unburden customers (to save time and money) LEVEL 4 LEVEL 3 LEVEL 2 LEVEL 1 Proactive & relevant End2end solutions Basic Q&A Powered by Al driven and automated lead life cycle management ? 56 of 74 LEVEL 2: Kate reactively offers digital end-to- end solutions to customers LEVEL 1: A chatbot answers basic questions from customers on day-to-day bankinsurance needs Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#57KBC DISCAI KBC's Al fintech, launched on 7 March 2022 57 of 74 DISCAI - Discovering Al Fully owned KBC Group subsidiary, grouping the in-house developed artificial intelligence (AI) solutions Bank-Insurance as a Service Offering innovative solutions to other companies Leverage investments in data, Al, together with KBC's financial expertise Fully in line with KBC's strategy to go beyond traditional bank- insurance offering and income diversification KBC Group NV 100% 100% 100% 100% KBC Bank KBC Insurance KBC Global Services N.V. DISCAI ✓ next steps for DISCAI Starting with commercialisation of AML platform Innovative and high-performance Al-based solution developed by KBC for anti-money laundering (AML), a global challenge for financial institutions . Much more effective solution in detecting fraud cases ('know your transaction (KYT)' under AML regulations), trend-based instead of rule-based Adhering to strict data privacy standards Partnering with KPMG to attract interested B2B parties and support implementation in various countries Initial focus on parties geographically close to KBC Group More potential innovative solutions in the future In a next phase, DISCAI will assist companies and organisations from various sectors in search for high- performance and innovative solutions to technological and regulatory challenges Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#58KBC Strategy Translating strategy into non-financial targets NEXT LEVEL Differently: THL No hassle, no frills, zero- delay customer experience Proactive personalized financial solutions via DATA and Al Re-design & automation of all processes Bank-insurance+ Digital lead management: from data driven to solution driven Group-wide collaboration CUSTOMER NPS RANKING Maximise customer experience PEARL+ Outperform Go for Digital first DIGITAL SALES DATA DRIVEN on operational efficiency SCORE STP Further enhance bank- insurance % BANK-INSURANCE CUSTOMERS 58 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#59KBC Strategy Update on KBC's non-financial targets Customer NPS ranking Bank-insurance (BI) clients Top-3 BI CLIENTS Top-2 Top-2 Top-2 in % 2020 2021 2022 2023 KBC is 2nd in customer NPS (Net Promoter Score) ranking based on weighted avg of ranking in five core countries Target is to remain the reference (i.e. Top-2 score on group level) Straight-through processing (STP) STP SCORE* in % 49% 60% 25% 33% 2020 2021 2022 2023 The STP ratio measures how many of the services that can be offered digitally are processed without any human intervention and this from the moment of interaction by a client until the final approval by KBC. BI STABLE CLIENTS in % 59 of 74 77% 78% 81% 85% 22% 23% 25% 27% 2020 2021 2022 2023 2020 2021 2022 2023 Bl customers have at least 1 bank + 1 insurance product of our group. Stable Bl customers: at least 2 bank + 2 insurance products (Belgium: 3+3) Digital sales DIGITAL SALES BANKING PRODUCTS* in % DIGITAL SALES INSURANCE PRODUCTS in % 46% 39% 40% 32% 15% 19% 24% 25% 2020 2021 2022 2023 2020 2021 2022 2023 Digital sales 46% of banking sales (vs 2023 target of ≥40%). Digital sales 24% of insurance sales (vs 2023 target of ≥25%) * Based on weighted average of selected core products. *Based on analysis of core commercial products. Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#60KBC KBC's ESG ratings and indices are ahead of the curve Agency CDP DISCLOSURE INSIGHT ACTION D- ESG rating of 28th of December 2022 (previous score) Severe Risk High Risk Medium Risk Low Risk SUSTAINALYTICS 0 S&P Dow Jones Indices A Division of S&P Global MSCI Corporate ESG Performance RATED BY ISS ESG‣ FTSE4Good Prime KBC A (A-) Negligible Risk KBC 12.5 (12.8) 100 KBC 75 (74) C B BB BBB A AA AAA D- KBC AAA (AAA) D+ C- C C+ KBC C+ prime (C prime) 1 2 3 4 0 5 • • • Position versus industry average 60 of 74 Leader in addressing climate change CDP's A-list Financial average service B- 3rd percentile of 405 diversified banks assessed 10th of 405 diversified banks Top 15% (85th percentile of 242 banks assessed) * Final percentile of 2022 ranking is not available, as not all banks have been assessed yet by S&P Global 5th percentile of 197 banks assessed 1st decile rank of 300 Commercial Banks & Capital Markets assessed Top 10% KBC (90th percentile of banks assessed) 4.3 (4.7) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#61KBC Some recent ESG realisations • . ESG TERRA CARTA Environmental Disclosure of 2030-2050 climate targets for our lending portfolio and responsible investing funds in line with our CCCA ambitions All KBC banking activities have committed to the Science Based Targets initiative (SBTI) We calculated the climate- related impact of our own investments and asset management portfolio through Trucost data and methodology KBC received the Terra Carta Seal in recognition of its commitment to creating a sustainable future. Net climate-neutral regarding our direct environmental footprint ESG Social Bloomberg Gender-Equality Index 2023 Member 32bn EUR in Responsible Investing funds Implementation of our social bond framework and first Belgian financial institution to issue a 750m EUR social bond 9.7m EUR of outstanding loans to microfinance institutions and investments in microfinance funds, reaching 1.4m rural entrepreneurs and farmers in the South Promoting female entrepreneurship targeting 50% of female founders in our start-up community Promoting diversity and an inclusive culture. Inclusion in the Bloomberg Gender-Equality Index. First-time participation to the Workforce disclosure initiative and signatory of the Women's Empowerment Principles • • • . • ESG top EMPLOYER BELGIË BELGIQUE BELGIUM 2023 CERTIFIED EXCELLENCE IN BVPLOYEE CONDITIONS Governance Top level responsibility for sustainability and climate change - anchored in our sustainability governance and remuneration Our people as one of the main drivers in our sustainable transition. KBC, CBC and K&H have been awarded Top Employer certification by the Top Employer's Institute Completion of responsible behaviour awareness training by the vast majority of staff in all core countries Strengthening of our sustainability governance. The country general manager sustainability has functional reporting requirements to the Senior General Manager Sustainability at KBC Group 61 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#62KBC Our environmental footprint Direct footprint scope 36.8 kt CO₂e Fuel combustion Employee commuting and business travel (own fleet) Paper consumption Waste generation and waste Operational vehicle lease Motor vehicle loans processing 12.9 kt CO₂e 5.4 kt CO,e 1.8 kt CO,e 0.8 kt CO,e 337.1kt CO,e 923.1kt CO,e • Refrigerant gases Purchased Water consumption Employee electricity, steam. heat and cooling commuting and business travel by not-own fleet I 1.3kt CO,e 3.9kt CO,e 0.1kt CO e 10.7 kt CO₂e Scope Scope 2 Scope 1 19.5 kt CO₂e 3.9kt CO₂e 57 082.2 kt CO₂e Figure 5.1: Scope and source of KBC Group's total GHG emissions totalling 57.1 Mt CO,e The colours of the icons in the figure above are an indication of the data quality of the calculated GHG emissions from that particular source, ranging from dark green (highest data quality) to grey (lowest data quality). Readers are referred to the Sustainability facts and figures section of this report for detailed information on the scope and sources of KBC Group's GHG emissions, the data quality, the calculation methodology and detailed GHG emissions figures and emission intensity data per sector. I I Mortgages Oil and gas loan portfolio 62 of 74 DIRECT footprint scope*: Measure, reduce and set clear targets on our direct footprint scope already since 2015. . • At YE 2021, we achieved the target of 100% of renewable energy (in % of own electricity consumption) We already substantially reduced our own GHG emissions by -71% in 2021 vs -80% targeted by 2030 (reduction compared to 2015) In line with our commitment, we reached net-climate neutrality by offsetting our residual direct emissions INDIRECT footprint scope*: In 2021, for the first time, we have calculated the Scope 3 emissions from our loan and lease portfolio (the financed emissions). More details in our 2021 Sustainability Report (KBC.COM) 1685.6 kt CO,e 2 293.2 kt CO₂e • Mining loan portfolio 128.5 kt CO₂e Remaining loan portfolio 51 677.8 kt CO₂e Indirect footprint scope: 57.1 Mt CO₂e in absolute terms corresponding to 312 tonnes CO₂e per million euro outstanding I 營 2021 KBC Sustainability Report KBC Group The publication of the sustainability report 2022 will be on 3rd of April 2023 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#63KBC Our 2030 Climate targets INDIRECT footprint Specific targets (1) for reducing future GHG emissions (2) of our lending and asset management business Energy -39% (3) by 2030 (tonne CO₂e/m euro) Responsible investment funds 65% of total annual fund production by 2030 55% of total assets under distribution by 2030 Agriculture -21% by 2030 (tonne CO₂e/m euro) Financing of passenger cars -42% by 2030 in loans and financial lease (g CO2/km) -81% by 2030 in operational lease (g CO2/km) Mortgages and commercial residential real estate -43% by 2030 (kg CO2e/m²/year) Real estate -38% 63 of 74 75% Renewable energy of total energy loan portfolio by 2030 ອາ Electricity -31% by 2030 (kg CO₂e/MWh for electricity producers) Cement -16% by 2030 (tonne CO2/tonne cement) • • • • • In September 2019, KBC strengthened its climate commitment by signing the UN Collective Commitment to Climate Action (CCCA) We aligned our business strategy with the Paris Agreement to keep global warming well below 2°C, while striving for a target of 1.5°C By signing the CCCA, KBC takes concrete actions to reduce exposure to most material and climate sensitive sectors and product lines The first Climate Report details our commitment, objectives and accomplishments in our role as a CCCA company (see KBC.COM website). The baseline data and underlying calculations received limited assurance In 2022, we measured our performance in the covered sectors, and we will publicly disclose all details in our 2022 Sustainability Report. by 2030 (tonne CO₂e/m euro) Steel -14% by 2030 (tonne CO2/tonne steel) 1. 2050 KBC targets available in our KBC Group Climate Report 2. Percentage reduction compared to 2021 levels 3. Additional target of 50% reduction of the carbon intensity of the Corporate investees in responsible funds by 2030 (versus the end of 2019) Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view KBC Group Climate Report Determining our 2021 baseline and target setting for 2030 and 2050 September 2022 Company profile KBC Strategy Sustainability Asset quality MREL & Funding#64KBC Loan loss experience at KBC CREDIT COST RATIO* in %; Credit cost ratio: amount of losses incurred on troubled loans as a % of total average outstanding loan portfolio * FY22 FY21 FY20 FY19 FY18 FY17 AVERAGE '99-'22 Belgium BU 0.03% -0.26% 0.57% 0.22% 0.09% 0.09% n/a Czech Republic BU 0.13% -0.42% 0.67% 0.04% 0.03% 0.02% n/a International Markets 0.31% 0.36% 0.78% -0.07% -0.46% -0.74% n/a BU* Group Centre BU* -0.04% 0.28% -0.23% -0.88% -0.83% 0.40% n/a Total 0.08% -0.18% 0.60% 0.12% -0.04% -0.06% 0.39% As of 1Q 2022, KBC Ireland has been shifted from International Markets BU to Group Centre BU. No restatements have been made 64 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#65Diversified loan portfolio KBC TOTAL LOAN PORTFOLIO OUTSTANDING - BY SECTOR as % of total Group loan portfolio outstanding" Mortgages Consumer Finance 3.5% Services Distribution Real Estate Finance and insurance Other (0.5% share) Building & construction Authorities 9.9% 8.2% 6.3% 5.9% 4.6% 4.2% 3.1% Agriculture, farming & fishing 2.8% Automotive 2.5% Food producers 1.7% Electricity 1.7% Metals 1.6% Chemicals 1.4% Machinery & heavy equipment Oil, gas & other fuels 0.9% 0.9% Hotels, bars & restaurants 0.7% Shipping 0.7% 39.6% Retail SME & Corporate Total loan portfolio outstanding 206bn EUR Group level** TOTAL LOAN PORTFOLIO OUTSTANDING - BY SEGMENT as % of total Group loan portfolio outstanding* Corporate 35.9% Retail 43.2% 20.9% SME TOTAL LOAN PORTFOLIO OUTSTANDING - BY GEOGRAPY as % of total Group loan portfolio outstanding* Other CEE Other*** Other W-Eur 3.8% Ireland 7.0% 0.4% 4.0% Hungary 3.6% Bulgaria 4.5% Slovakia 5.8% Czech Rep. 18.2% Aligned with the credit risk view of our loan portfolio as reported in the quarterly financial statements Including loan portfolio of KBC Bank Ireland and KBC Bank Bulgaria as of 3Q22 (+4.5bn EUR at YE22). The pro-forma total loan portfolio outstanding without KBC Bank Ireland amounts to 198bn EUR. 'Other' includes 0.01% of the outstanding portfolio to Russia and Ukraine Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy 52.7% Belgium 65 of 74 Sustainability Asset quality MREL & Funding#66KBC substantial and well-diversified government bond portfolio • • Carrying value of 52.4bn EUR in government bonds (excl. trading book) at end of FY22, 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 5.6bn EUR at the end of FY22 GOVERNMENT BOND PORTFOLIO - CARRYING VALUE* FY21/FY22 in % Portugal Other Netherlands Austria Germany 10% Belgium 1% 24% Italy 2% 1% Poland 3% Spain 5% 13% France 3% 1% 1% 52.0bn EUR FY21 Ireland 3% Bulgaria 7% 6% Slovakia Hungary Portugal Other Netherlands 10% Belgium Austria Germany 1% 20% Italy 2% 1% 1% 1% Poland 2% Spain 5% 52.4bn EUR FY22 France 10% 20% Czech Rep. 2% Ireland 4% Bulgaria 7% 5% Slovakia Hungary 24% Czech Rep. 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 66 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#67KBC Loan portfolio breakdown by IFRS 9 ECL stage TOTAL LOAN PORTFOLIO OUTSTANDING - BY IFRS9 ECL STAGE* in %; as % of total Group loan portfolio outstanding 19.9% 17.6% 16.4% 14.9% 13.6% 11.3% 11.5% Stage 2 3.5% 3.3% 2.9% 2.3% 2.2% 2.0% 2.1% Stage 3 FY19 FY20 FY21 1Q22 1H22 9M22 FY22 STAGE 3 RATIO | BELGIUM BU in % 2.4% 2.3% 2.2% 2.1% 1.9% 1.8% 1.9% FY19 FY20 FY21 1Q22 1H22 9M22 FY22 STAGE 3 RATIO | CZECH REPUBLIC BU in % 2.3% 2.3% 1.8% 1.9% 1.8% 1.6% 1.7% . • • Decrease of Stage 3 portfolio is mainly related to the sale of non-performing portfolio of Ireland As of 2H21, the increase of the Stage 2 portfolio resulted mainly from collective transfer to Stage 2 of Stage 1 portfolios for the impact of Covid and the Czech interest rate increases. In 2022, in line with strict application of the general ECB guidance on staging, an additional exposure was transferred to Stage 2 linked to the geopolitical and emerging risks, partly compensated in 2Q22 by the full release of the collective transfer of Covid Excluding these collective transfers and a model recalibration in 4Q22, no general deterioration has been observed in our portfolio FY19 FY20 FY21 1Q22 1H22 9M22 FY22 STAGE 3 RATIO | INTERNATIONAL MARKETS BU** in % 8.5% 6.9% 5.7% 2.4% 2.2% 2.1% 1.9% *** Aligned with the credit risk view of our loan portfolio as reported in the quarterly financial statements ** As of 1Q 2022, KBC Ireland has been shifted from International Markets BU to Group Centre BU. No restatements have been made *** As of 3Q 2022, including KBC Bank Bulgaria with a Stage 3 ratio of 2.6% at FY22 FY19 FY20 FY21 1Q22 1H22 9M22 FY22 67 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#68Cover ratios KBC COVER RATIO - BY IFRS9 ECL STAGE* in % 47.1% 48.2% 48.5% 49.5% 47.1% 44.7% 42.0% Stage 3 4.8% 1.3% 2.2% 1.8% 1.6% 1.7% 1.7% Stage 2 FY19 FY20 FY21 1Q22 1H22 9M22 FY22 In 2022, the higher Stage 3 cover ratio is driven mainly by the sale of non- performing mortgage loans of Ireland The q-o-q decrease of the Stage 3 cover ratio is driven mainly by inflow of stage 3 files with high collateral From 2H21, the decline of the Stage 2 cover ratio resulted mainly from collective shifts to Stage 2 (linked to the geopolitical and emerging risks, partly compensated in 2Q22 by the full release of the collective transfer of Covid) Aligned with the credit risk view of our loan portfolio as reported in the quarterly financial statements As of 1Q 2022, KBC Ireland has been shifted from International Markets BU to Group Centre BU. No restatements have been made As of 3Q 2022 including Raiffeisenbank Bulgaria with a coverage ratio of 64% at FY22 Highlights STAGE 3 COVER RATIO | BELGIUM BU in % 45.6% 41.7% 42.6% 43.0% 42.7% 42.6% 39.6% FY19 FY20 FY21 1Q22 1H22 9M22 FY22 STAGE 3 COVER RATIO | CZECH REPUBLIC BU in % 47.2% 48.7% 49.4% 47.2% 46.8% 48.2% 44.7% FY19 FY20 FY21 1Q22 1H22 9M22 FY22 STAGE 3 COVER RATIO | INTERNATIONAL MARKETS BU** in % 43.4% 32.7% 34.4% 43.7% 49.9% 44.8% 49.4% FY19 FY20 FY21 1Q22 1H22 9M22 FY22 68 of 74 Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#69KBC Above resolution requirements of 2022 in terms of MREL MREL targets • • The resolution plan for KBC is based on a Single Point of Entry (SPE) approach at KBC Group level, with bail-in as the preferred resolution tool In December 2022, the SRB communicated updated draft MREL targets (under BRRD2) for 01-01-2024, expressed as a percentage of Risk Weighted Assets (RWA) and Leverage Ratio Exposure Amount (LRE) The new binding MREL targets (incl. CBR on top of the MREL target in % of RWA) are: • 27.87% of RWA as from 01-01-2024 (including CBR2 of 4.95% as from 4Q2023), with an intermediate target as from 01-01-2022, reaching 26.21% at YE2022 (including CBR³ of 4.58%) 7.38% of LRE as from 01-01-2024, with an intermediate target of 7.34% of LRE as from 01-01-2022 MREL actuals in bn EUR in % of RWA 30.3 27.5% in % of LRE 8.7% HoldCo senior 11.5 10.5% 3.3% T2 1.8 1.6% 0.5% 0.4% AT1 1.5 1.4% CET1 15.5 14.1% 4.5% FY22 FY22 FY22 1. The official MREL decision is expected during 2Q23 2. Combined Buffer Requirement as of 01-01-2024= Conservation Buffer (2.5%) + O-SII buffer (1.5%) + Countercyclical Buffer (0.75%) + Systemic Risk Buffer (0,20%) 3. Combined Buffer Requirement at YE 2022 = Conservation Buffer (2.5%) + O-SII buffer (1.5%) + Countercyclical Buffer (0.39%) + Systemic Risk Buffer (0,20%) Highlights 69 of 74 • The MREL ratio in % of RWA increased from 27.2% in 3Q22 to 27.5% in 4Q22. This is driven mainly by the issuance of a new Holdco senior instrument and an increase of the CET1 capital The MREL ratio in % of LRE increased from 8.6% in 3Q22 to 8.7% in 4Q22, driven by the issuance of a new HoldCo senior instrument, an increase of the CET1 capital and a decrease of the leverage ratio exposure Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#70KBC upcoming mid-term funding maturities TOTAL OUTSTANDING FUNDING MATURITY BUCKETS in % in m EUR 17% Covered bonds 0.7% 1.2% 1.1% 1.1% 0.6% 0.2% 0% % of KBC Group B/S 0.7% 4.500 Subordinated T2 11% 4.000 Subordinated T1 Total outstanding 8% 3.500 -1% \Senior unsecured 3.000 OpCo 20.1bn EUR 2.500 2.000 Senior unsecured 64% HoldCo 1.500 1.000 500 FY22 2023 2024 2025 2026 2027 2028 2029 ≥2030 FUNDING PROGRAM 4Q22 • In November 2022, KBC Group issued a senior Holdco benchmark for an amount of 1bn EUR with a 5-year maturity callable after 4 years. 70 of 74 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 placement format Senior unsecured, T1 and T2 capital instruments issued at KBC Group level and down-streamed to KBC Bank EXPECTED MREL FUNDING PROGRAM in bn EUR Range 2.4bn-4.4bn EUR 4.40 1.42 2.40 Plan 2023 Realised 2023 We aim to issue 1 green/social bond per year Note: any change in regulatory requirements, RWA evolutions, MREL targets or market circumstances can change the current disclosed range In January 2023, KBC Group issued a senior Holdco benchmark of 1bn USD with a 6 years maturity callable after 5 years. Later in January, KBC Group also issued a subordinated Tier 2 of 500m EUR with a 10.25 years maturity callable after 5.25 years. (Both are not included in the above figures as not part of the 4Q2022 position). Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#71KBC strong and growing customer funding base 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 balance sheet total (but net growth in customer funding in absolute terms) KBC Bank participated to the TLTRO III for a remaining exposure of 15.4bn EUR which is reflected in the 'Interbank Funding' item below FUNDING BASE in % zoom on customer funding Interbank Funding 10% 11% 10% 8% 8% 13% 13% -1% Secured Funding -0% 3% 4% 2% 6% 7% 1% -1% 6% CUSTOMER FUNDING Debt issues placed at 6% 6% 7% 8% institutional relations 8% 8% CUSTOMER FUNDING in bn EUR 7% in % 8% 8% 8% 8% 4% 3% Total Equity 7% olo 2% 2% Certificates of deposit 7% 9% 5% Government and PSE 12% Mid-cap 71 of 74 72% 73% 69% 70% 69% 227 Customer funding 63% 63% 83% Retail and SME 193 201 176 156 164 144 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY22 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#72KBC Glossary 72 of 74 B3/B4 CBI Combined ratio (non-life insurance) Common equity ratio Cost/income ratio (group) Cost/income ratio adjusted for specific items Credit cost ratio (CCR) EBA ESMA ESFR FICOD Impaired loans cover ratio Impaired loans ratio Leverage ratio Liquidity coverage ratio (LCR) Management overlay MREL Net interest margin (NIM) of the group Net stable funding ratio (NSFR) PD Return on allocated capital (ROAC) for a particular business unit Return on equity Basel III/Basel IV Central Bank of Ireland [technical insurance charges, including the internal cost of settling claims / earned premiums] + [operating expenses / written premiums] (after reinsurance in each case) [common equity tier-1 capital] / [total weighted risks] [operating expenses of the group] / [total income of the group] 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 (i) MtM ALM derivatives (fully excluded), (ii) bank & insurance 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) and (iii) one-off items [annualised 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. As the full collective Covid-19 expected credit losses (ECL) have been booked in 1H20, they were not annualised to calculate the ratio in 1H20 European Banking Authority European Securities and Markets Authority European Single Resolution Fund Financial Conglomerates Directive [total specific impairments on the impaired loan portfolio (stage 3)]/ [part of the loan portfolio that is impaired (PD 10-11-12)] [part of the loan portfolio that is impaired (PD 10-11-12)] / [total outstanding loan portfolio] [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 [stock of high quality liquid assets] / [total net cash outflow over the next 30 calendar days] Our Expected Credit Loss (ECL) models were not able to adequately reflect all the specifics of the Covid-19 crisis or the various government measures implemented in the different countries to support households, SMEs and Corporates through this crisis. Therefore, an expert-based calculation at portfolio level is required via a management overlay Minimum requirement for own funds and eligible liabilities [banking group net interest income excluding dealing room] / [banking group average interest-bearing assets excluding dealing room] [available amount of stable funding] / [required amount of stable funding] Probability of default [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 [result after tax, attributable to equity holders of the parent] / [average parent shareholders' equity, excluding the revaluation reserve for fair value through Other Comprehensive Income (OCI) assets] Total loss-absorbing capacity TLAC Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#73KBC Contacts / questions Johan Thijs KBC Group CEO Luc Popelier KBC Group CFO More information Company website Quarterly Report Table of results (Excel) KBC Quarterly Reports Quarterly presentation Debt presentation Presentations Kurt De Baenst Investor Relations General Manager direct +32 2 429 35 73 mobile +32 472 500 427 [email protected] Upcoming 2023 events 10 February Equity roadshow, London 1 March Equity roadshow, Paris Ilya Vercammen Investor Relations Manager direct +32 2 429 21 26 mobile +32 472 727 777 [email protected] 8 March Equity roadshow, Frankfurt 8 March Equity roadshow, NY 9 March Equity roadshow, Boston Dominique Agneesens Investor Relations Manager direct +32 2 429 14 41 mobile +32 473 657 294 [email protected] 14 March Equity conference, London 3 April Annual report 2022 24 April 1Q23 black out period Martijn Schelstraete Investor Relations Analyst direct +32 2 429 08 12 4 May Annual General Meeting mobile +32 474 213 535 [email protected] 16 May 1Q23 Publication of Results 17 May Equity roadshow, London 73 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding#74Disclaimer KBC • 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 incomplete. KBC cannot be held 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 capital trends of KBC, involving numerous assumptions and uncertainties. There is a risk that these statements may not be fulfilled and that future developments differ materially. Moreover, KBC does not undertake any obligation to update the presentation in line with new developments. By reading this presentation, each investor is deemed to represent that they possess sufficient expertise to understand the risks involved. 74 of 74 Highlights Profit & Loss Capital & Liquidity Looking forward BU & FY22 view Company profile KBC Strategy Sustainability Asset quality MREL & Funding