November 12, 2009

Karel Heyndrickx, Managing Director, KBC AM

UBI and KBC:

Partnership, reconciling the best of 2 worlds, in a promising Indian asset management market.

Agenda

• A new partnership : Union Bank of India and KBC Asset Management

• A promising Indian asset management market

• Reconciling the best of 2 worlds

• Status of the Project

New partnership:

Union Bank of India

&

KBC Asset Management

Union Bank of India

2008

Union Bank of India

KBC Asset Management

KBC AM is a strong pillar of KBC Group, generating 20% of KBC Groups profit in the last years.

KBC AM is well positioned in the KBC home markets. We are market

leader in Belgium and in Czech Republic (>30%). Our market share

in Central Europe exceeds 20%.

We offer a full range of asset management products and services (funds and investment advice) for

retail, private banking and institutional clients.

Home markets: full rangeof services based on a joint support

model.Non home markets: distribution via KBC channels in Western Europe + joint ventures (China & India) as a

long term growth option.

A promising Indian

asset management market

Growing economy Stable political and legal environment High Savings Quote ( 35 % of GDP) Growing Middle Class (est. 300 mio Indians by 2025)

The Indian market

85

54

2086

55

76

36

17

20

27

76

65

29

46

1995-96 2004-05 2014-15 E

Low: < 943 Lower Middle: 943-1,887 Middle: 1,887-2,830Upper Middle 2,830-3,775 Rich: > 3,775

Source: NCAER

Mutual funds are less than 10 % of Households savings Household disposable income is expected to grow at 5.3% for coming 20 years

The Indian market

The Indian market

• The Indian mutual fund market is among the fastest growing markets: increase of 29% from 2004 to 2008

• The mutual funds industry is likely to grow in the range of 15 to 25 % in the period 2010 to 2015 (KPMG, June 2009)

• The biggest challenge is to increase retail penetration and customer awareness, channelizing household savings into mutual funds. Most AMCs have currently limited focus beyond the top 20 cities.

• Prudent asset managers will continue to do well by focusing on the 3 key factors of success in asset management in India : fund performance, branding and distribution support (Mc Kinsey, August 2009)

Reconciling the best of 2 worlds

UBI

• Link with the regulators Coordination of government relations: UBI will enhance and

coordinate all contacts with local government and regulators.

• Distribution capacity A distribution network of 2 670 branches (nationwide) ; in

the first year 600 branches will distribute JV products which will increase to 1 400 by Year 5

UBI will hire 150 dedicated sales for the JV products in Year 1, to increase to 400 sales by Year 5

A retail customer base of 20 million A corporate customer base (most of top 200 companies) A cluster of Nationalized Regional Banks, who are closely linked with UBI

• Expertise on Asset Management Business Extensive know how in the Asset Management field Expertise on Capital Guaranteed Funds (top player in

Europe) Experience in making/selling Asset Management products

outside Western Europe (China, Central Europe, Korea, Japan,…)

Process- and risk management • Establishing a joint support model

Extensive knowledge on the coaching and training of a retail network in the selling of investment products

(Belgium, Czech Republic, Poland, Slovakia, Hungary…)

KBC Asset Management

Status of the Project

Status

• Signing joint venture agreement : Nov 2008• In - principle approval by Indian Authorities : Nov 2009• Currently preparing the start of the Asset Management Company:

business architecture, product launch, processes, systems, staffing, governance, cooperation structures, legal aspects….

• In the past months the economic and financial context changed dramatically

KBC stays committed to this project, despite the changing environment The project plan is being actualized in close cooperation with UBI when

and where needed We keep the focus on our initial ambition of long term growth

• First Product Launch planned for first half 2010

Thank you for your attention !