PRESENTATIONPRESENTATION

MARCH 2004MARCH 2004

OWN ISSUES OFFICEOWN ISSUES OFFICE

Profound restructuring process of Kredyt BankProfound restructuring process of Kredyt Bank

There are three main restructuring areas

Credit risk Investment banking OrganisationalStructure

Restructuring areasRestructuring areas

2001 2002 III kw 2003 2003

11,8%

17,5%

28,3%

20,4%

Increase of irregular receivables

Share of irregular receivables in total receivables

Restructuring and quality of receivablesRestructuring and quality of receivables

2001 2002 III kw 2003 2003

Należności kredytowe brutto

Increase of loan portfolio safetyIncrease of loan portfolio safety

39,6%42,5% 43%

52%

Coverage ratio of irregular receivables by provisions

Significant increase of coverage ratio by provisions

Economy industries of heavy loan provisioningEconomy industries of heavy loan provisioning

• Real-estate financingReal-estate financing

• Metal processing industryMetal processing industry

• Power industryPower industry

• Food processingFood processing

• Ship buildingShip building

• Automotive industryAutomotive industry

Investment bankingInvestment banking

Kredyt Bank S.A. Group restructuring process

Kredyt Trade Sp. z o.o.100%

Kredyt Trade Sp. z o.o.100%

BFI Serwis Sp. z o.o. 100%

BFI Serwis Sp. z o.o. 100%

BDH Serwis Sp. z o.o. 100%

BDH Serwis Sp. z o.o. 100%

ŻAGIEL S.A. 100%

ŻAGIEL S.A. 100%

KREDYT LEASE S.A. 100%

KREDYT LEASE S.A. 100%

KB Zarządzanie Aktywami S.A. (asset management) 100%

KB Zarządzanie Aktywami S.A. (asset management) 100%

Kredyt International Finance B.V. 100%

Kredyt International Finance B.V. 100%

additionaladditionaldistribution channelsdistribution channels

support functionssupport functions

SPVSPV

to be soldto be sold

already soldalready sold

for sale orfor sale orunder restructuring processunder restructuring process

KREDYT BANK UKRAINA66.7%

KREDYT BANK UKRAINA66.7%

PTE KREDYT BANK S.A. 100%

PTE KREDYT BANK S.A. 100%

AGROPOLISA Insurance company

AGROPOLISA Insurance company

KREDYT BANK S.A. Vilnius Branch

KREDYT BANK S.A. Vilnius Branch

POLSKI KREDYT BANK S.A. POLSKI KREDYT BANK S.A.

RESULTRESULT

Profound restructuring process of Kredyt BankProfound restructuring process of Kredyt Bank

Kredyt Bank S.A. commenced work, in collaboration with the KBC Bank,on the Kredyt Bank S.A. Reorganization Program.

Functioning of the Kredyt Bank S.A. was analysedFunctioning of the Kredyt Bank S.A. was analysed

including:including:the sthe saleale processes, processes,the costs of activity,the costs of activity,the banking risk (market and credit risks).the banking risk (market and credit risks).

A concept was developed for organisational changesA concept was developed for organisational changesin the Kredyt Bank S.A. Capital Groupin the Kredyt Bank S.A. Capital Group

It was approved by the Bank’s Management Board and the Bank’s Supervisory Board.It was approved by the Bank’s Management Board and the Bank’s Supervisory Board.

The Reorganisation Program of the Kredyt Bank S.A. will be conducted by way of mutually

interdependent projects encompassing significant areas of the Bank’s functioning.

23 04724 691 23 980

2001 2002 2003

Total assets of Kredyt Bank Group

7,1% -2,9%

Changes to key balance sheet items of the GroupChanges to key balance sheet items of the Group

Slow down of increase of scale of activity measured by total assets

in PLN millionin PLN million

%% Change in relation to previous periodChange in relation to previous period

4 155,54 431,5

2002 2003

6,6%

%%

Changes to securities portfolio

Changes to key balance sheet itemsChanges to key balance sheet items

in PLN millionin PLN million

Debt securitiesDebt securities

Increase of share of debt securities.

They account for app. 90%of total securities portfolio.

Change in relationChange in relation to previous periodto previous period

232,5232,5

1 176,5

1 409

Operating resultOperating result

The Bank generated positive financial result excluding cost of risk

PositiveOPERATING

RESULTbefore the cost of

provisions

Functioning costsFunctioning costs Net income Net income from operating activityfrom operating activity

in PLN millionin PLN million

Net result from operating activityNet result from operating activity

Increase of net commissions and decrease of net interest

21,4

797,3

486,8

216,1

6,2

723,2

524,8

154,8

2002 2003

result on other activities

net commissions

net interest

result on other operating income andexpenses

-9,3%

7,8%

%%Change in relation to previous period

iin PLN millionn PLN million

Functioning costsFunctioning costs

Decrease of tangible costs, increase of fixed assets depreciation costs

117,2

558,3

494,5

28,4

168,6

465,1

504,9

37,9

2002 2003

taxes and fees

personell costs

tangible costs

depreciation of fixed assest

... due to intensive build-out and updating

of sale and IT infrastructure.

%% Change in relation to previous periodChange in relation to previous period

in PLN millionin PLN million

43,9%43,9%

16,7%

2,1%

Main reasons for net loss generated in 2003Main reasons for net loss generated in 2003

Main reason for net loss - loan portfolio restructuring

in PLN million

Negative financial result of the

Group

-1 567Financial result of the Group

excluding „risk cost”

+232,5

Establishing provisions for credit risk

Corporate income tax

Write-off of goodwill of subsidiaries

-1 533,3

-187,5

-81,7

KBC Bank NV - strategic investor in Kredyt BankKBC Bank NV - strategic investor in Kredyt BankFinancial strength of KBC Bank NV as compared with Polish banking sector

KBC Group with its seat in BrusselsKBC Group with its seat in Brussels• conducts banking activity (KBC Bank) as well as insurance activity (KBC Insurance)conducts banking activity (KBC Bank) as well as insurance activity (KBC Insurance)

• one of the largest financial groups in Belgiumone of the largest financial groups in Belgium

• occupies a leading position in the Central Europeoccupies a leading position in the Central Europe

• in Poland - it conducts banking activity through Kredyt Bank S.A.and insurance activity through Warta S.A.in Poland - it conducts banking activity through Kredyt Bank S.A.and insurance activity through Warta S.A.

• worldwide - it employs about 45,000 people and services 9 million customers.worldwide - it employs about 45,000 people and services 9 million customers.

Data as at end IIIQ 2003Data as at end IIIQ 2003

KBC GROUP ASSETS: KBC GROUP ASSETS: EUR 224 billionEUR 224 billion

OWN FUNDS OF KBC GROUP: OWN FUNDS OF KBC GROUP: EUR 9.3 billion EUR 9.3 billion

• more than more than twice as large astwice as large as the assets of the Polish banking sector the assets of the Polish banking sector • more than more than 22 times as large as22 times as large as own funds of Polish banking sector own funds of Polish banking sector

• similar to own funds similar to own funds of Polish banking sectorof Polish banking sector

KBC Bank holds 81.4% participation in the capital of Kredyt Bank S.A. KBC Bank holds 81.4% participation in the capital of Kredyt Bank S.A.

Capital adequacy ratio of the BankCapital adequacy ratio of the Bank

Increase of capital adequacy ratio as a result of series W shares issue

2001 2002 III kw 2003 2003 II kw 2004

8,80%

12,00%

8,55%

11,00%

14,96%

Capital adequacy ratio of the Bank

II kw 2004II kw 2004FORECAST

8%8%Level required by Polish Banking LawLevel required by Polish Banking Law

Total financial support of KBC Bank N.V. PLN 8 630 million

Actions securing appropriate levels of receivables’ concentration Actions securing appropriate levels of receivables’ concentration ratios and level of capital adequacy ratio ratios and level of capital adequacy ratio

within the process of restructuringwithin the process of restructuring. .

MAINTENANCE OF THE CURRENT AS WELL AS MAINTENANCE OF THE CURRENT AS WELL AS FFUTURE LEVELUTURE LEVEL OF STABILITY ANDOF STABILITY AND

SAFETY OF THE BANKSAFETY OF THE BANK

TARGETTARGET

Increase of the Bank’s core funds in 2003Increase of the Bank’s core funds in 2003Series U shares issue

Series U shares issue with pre-emption rights for existing shareholdersSeries U shares issue with pre-emption rights for existing shareholdersamounting toamounting to

PLN 665 millionPLN 665 milliontook place in the fourth quarter of 2003.took place in the fourth quarter of 2003.

Issue price:Issue price: PLN 10.50PLN 10.50

Pre-emption rights ratio:Pre-emption rights ratio: 7:37:3

Share of KBC Bank N.V. in capital after series U shares issue:Share of KBC Bank N.V. in capital after series U shares issue: 81.40%81.40%

Maintenance of own funds on the level adequate to the scale of activity

Assistance from KBC Bank N.V.Assistance from KBC Bank N.V.Key function of KBC financial assistance in restructuring process

TARGETSTARGETS

Placing of deposit Placing of deposit securing receivablessecuring receivables

of the Bankof the Bank

Loans repayment guarantee Loans repayment guarantee for the Bankfor the Bank

EUR 140 millionEUR 140 million PLN 6,364 millionPLN 6,364 million

Collateral for receivablesCollateral for receivablesSecuring concentration limits on Securing concentration limits on

appropriate levelsappropriate levels

Collateral for receivablesCollateral for receivablesIncrease of Increase of

capital adequacy ratiocapital adequacy ratio

TARGETTARGET

Providing the Bank with core fundsProviding the Bank with core fundsNew shares issue approved by General Assembly of the Bank held on January 9, 2004

Series W shares issue Series W shares issue with pre-emption rights for existing shareholders with pre-emption rights for existing shareholders amounting to approx. amounting to approx. PLN 600 millionPLN 600 million

will take place in the I H 2004will take place in the I H 2004

Issue price: Issue price: PLN 10.00PLN 10.00

Pre-emption rights ratio: Pre-emption rights ratio: 7:27:2

Share of KBC Bank N.V. in capital after series W shares issue, in case of purchasing all Share of KBC Bank N.V. in capital after series W shares issue, in case of purchasing all the shares issued:the shares issued: 85,53%85,53%

Increase of core funds (Tier I),Increase of core funds (Tier I),

which shall enable the Bank to pursue more flexible policy in Tier II capital areawhich shall enable the Bank to pursue more flexible policy in Tier II capital area

TARGETTARGET

Providing the Bank with supplementary fundsProviding the Bank with supplementary fundsThe Issuance Program of the registered, perpetual banking securities

in the amount up to PLN 800 million

On December 23, 2003 the Bank issued under Issuance Program On December 23, 2003 the Bank issued under Issuance Program debt securities amounting to debt securities amounting to

PLN 330 millionPLN 330 milliondirected to entities of KBC Bank N.V. Groupdirected to entities of KBC Bank N.V. Group

The raised funds are included into Upper Tier II capitalThe raised funds are included into Upper Tier II capitalon permit of Banking Supervision Commissionon permit of Banking Supervision Commission

Increase of supplementary funds (Tier II),Increase of supplementary funds (Tier II),

according to the Banking Law up to the amount of primary funds (Tier I)according to the Banking Law up to the amount of primary funds (Tier I)

FITCH RATINGSFITCH RATINGS

Long-term:Long-term: BBB+BBB+- - outlookoutlook positivepositive

Short-term:Short-term: F2F2

Individual:Individual: D/ED/E

SupportSupport :: 22

MOODY’S INVESTORS MOODY’S INVESTORS SERVICESERVICE

Long-term:Long-term: A2A2- outlook- outlook stablestable

Short-term:Short-term: P-1P-1

Financial strength:Financial strength: E+E+

Long-term rating of KB = sovereign rating of Poland.Long-term rating of KB = sovereign rating of Poland.

Positive impact of the major shareholder i.e. KBC Bank N.V. Positive impact of the major shareholder i.e. KBC Bank N.V.

Rating of the BankRating of the Bank

Investment grades from Fitch and Moody’s

Challenges for 2004Challenges for 2004Improvement of profitability and maintaining complete safety levels at the same time

• profitability improvement by decreasing costs and increasing salesprofitability improvement by decreasing costs and increasing sales

• effective controlling of credit risk effective controlling of credit risk

• maintaining of market position maintaining of market position • maintaining of maintaining of adequateadequate safety levels safety levels