KBC Group NV (KBC) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders, today is a special Annual General Meeting because of the circumstances. But anyway, this annual meeting is held in accordance with Article 24 of the Articles of Association, which provides that the annual meeting meets in ordinary session on the first Thursday of the month of May at 10:00. Well, today, this meeting cannot be -- you cannot sit at this meeting live, that's why we have an empty room, but I do hope that many people are following this meeting this year through a webcast. The official language of the annual meeting is Dutch. A simultaneous translation into English and French is available, and I hope that people who want to make use of this translation have found their link. So simultaneous translation in English is available via a separate link, I hope you found it. A simultaneous translation into French is available via another separate link. Taking into account the government measures relating to the COVID-19 pandemic and an application of the Royal Decree No. 4 of the 9th of April 2020 containing various provisions and co-ownership by company and associated law in the context of the fight against the COVID-19 pandemic, the modalities of participation in this annual meeting have been adapted. In view of the exceptional circumstances, this annual meeting will be held in a special way. The shareholders and their agents are forbidden to physically participate in the Annual General Meeting. The shareholders can only exercise their rights in the following 2 ways: by voting in favor of the annual meeting by means of the voting form or by granting KBC Group NV a power of attorney. For the Annual General Meeting, the shareholders can only ask that questions this year in writing. Shareholders can follow the Annual General Meeting by means of a webcast. During this webcast, the time for raised written questions will be answered, and that's something we will be taking care of later. Now in accordance with Article 31, first paragraph of the Articles of Association, the annual meeting is chaired by the Chairman of the Board of Directors. In accordance with Article 31 second paragraph, I appoint Mr. Johan Tyteca as Secretary; and Mr. Thomas Debackere (sic) [ Mr. Koenraad Debackere ] and Wilfried Kupers are appointed as tellers. The secretary and the tellers, together with the Chairman, are the bureau. A convocation was sent by ordinary letter to all registered shareholders and to the statutory auditor on the 3rd of April 2020. The directors were also convened also in the 3rd of April 2020 by means of a letter sent via an electronic means of communication used by the company with the consent of the Board of Directors for the distribution of documents to its directors. These notices included the company financial statements as of 31st of December 2019; the audit report of the statutory auditor on the company financial statements; the annual report 2019, including a combined annual report of the Board of Directors, on the consolidated the financial statements; and the audit report of the statutory auditor on the consolidated financial statements, they were attached to the convening. In addition, the invitation was published on the 3rd of April 2020 in the Belgian Official Gazette, De Standaard and Le Soir. These notices were also published on the company's website, www.kbc.com, as of 3 April 2020, together with all the information that must be made available to shareholders on the website in accordance with the law. Finally, the convening notices were published in the media and on the Euronext website. On the 16th of April 2020, KBC's website published additional and amended information to the shareholders regarding the Annual General Meeting. A press release in this respect was also published on the same date. We're talking about the adapted modalities here. The bureau does note that the general meeting has been regularly convened. Furthermore, pursuant to the Royal Decree of November 27, 1973, on the regulation of the economic and financial information to be provided to the works councils, on April 20, 2020, the management provided the works council with required annual information. The following have been deposited at the bureau. First, a text of the convocation letter sent to the registered shareholders, the directors and the statutory auditor; secondly, the proof of the publication of the convening notices in the Belgian Official Gazette and the newspapers in general, this is the Belgian Official Gazette of the 3rd of April 2020 and De Standaard and Le Soir of the 3rd of April 2020 as well; the text of the amendment to the convening notice of the Annual General Meeting was published on the 16th of April 2020 on KBC's website as well as the press release on the same day, and there's also the attendance list. These documents will be initialed and signed, respectively, by the members of the bureau. They will be kept together with the minutes of this meeting as well as the proxies and voting forms. The capital is represented by 416,394,642 shares without nominal value. Based on the entries on the attendance list, it is established that 315,456,480 shares with voting rights participate at this general meeting. This means 75.76% of the capital is represented here. So the meeting is thus regularly constituted. Some directors and their [ parallels ] also attend the general meeting by telephone conference. There is Mr. Roland Jeanquart, representative of the company's statutory auditor, attends the meeting in person; while Mr. Yves Vandenplas, also representative of the company's statutory auditor, attends the meeting via telephone conference. Anyone who is interested can, as has been said before, follow this webcast. I will now review the agenda. The Annual General Meeting was convened with the classic agenda. That means that the examination of -- the submission of the combined annual report of the Board of Directors, the statutory auditors' report on the company's consolidated financial statements and the consolidated financial statements for the year 2019; the approval of the company financial statements for the financial year 2019; the approval of the proposed publication of the results; the adoption of the remuneration report; the discharge from liability of the director and the statutory auditor of the company; and some statutory appointments. Furthermore, the adjustment of the remuneration of the statutory auditor for the financial 2019 is submitted for adoption. Then we will continue with the next part of this meeting. Mr. Johan Thijs, Chairman of the Executive Committee of KBC Group NV, will explain the annual report and the financial statements for the year at 2019. A prerecorded video of this explanation has been made and will also -- will now be shown.

Ladies and gentlemen, welcome to the explanation of the financial results of KBC. We're talking about the year 2019, and I will be using a number of slides for this presentation. First of all, we will have a look at the consolidated results per year. For 2019, we had almost EUR 2 billion. And if you are going to compare that with the past years, then you see that there is a line, this is a line we saw the last years. It fluctuates always around EUR 2.5 billion. But this means that 2019 was a very strong year. Now the way this year has been constructed and the impact of these results is shown on this slide. Balance has increased with 2%. That is due to, on the one hand, the increase of the activa and the -- with 6% and the deposits with 5%. KBC has an equity of EUR 20 billion. This is an increase of 5%. And it will not surprise that for 2019, we had a very strong common equity ratio of 17.1%. This is an enormous increase, especially if we're going to compare it with the year 2018 that was 16% and also a very stronger liquidity ratio, both in the short run as the long run. SCR, they are more than 130% in comparison with the legal minimums of 100%. So a very strong year for KBC last year. And if you're going to look at how this is composed, we are going to make a difference between the dark blue bars, the incomes, on the one hand; and the gray parts are the expenses. And you see that the most important contribution of the incomes is the interest-related products, a bit more than EUR 4.6 billion. And then if you -- then these are the other products that are going to diversify our incomes, net provision incomes, commission incomes, that is money that comes from asset management, from banking products, insurances with a commission where commission income is linked to, they get incomes from the technical incomes from the insurers. And then there's also a number of other incomes, those are instruments that are valued in comparison with the market activity, leasing activities, other kind of activities, so that is in total EUR 551 million. The total income of KBC is EUR 6.7 billion (sic) [ EUR 7.6 billion ] composed of what we just said. And you could look at these figures in a different way. These figures can be written this way. KBC is diversifying its income. If you can measure it, not as it's been presented here but if you look at it separate from IRS incomes because those are mainly directed to technical insurance income because you have a mix of income expenses, and if you're going to correct it, then you're going to see that the mix between the net interest-related products and the other products like asset management, life insurances, nonlife insurances, then you see that they have a -- KBC has seen a positive evolution, and that the importance is about 56%. In a general context, in Europe, this is a very good figure. This EUR 7.6 billion income, they have to be used to cover a number of expenses. On the one, we have about EUR 4.3 billion of costs. Those are made up of 2 different things. On the one hand, you have the [ expectation ] cost and the cost that we have to -- [ expectation ] costs to pay salaries, to pay for IT, for the buildings, et cetera. On the other hand, you have the bank taxes. They are about EUR 500 million. It's a mix of different bank taxes in all the different countries. It's about more than EUR 200 million depreciation. Depreciation is about credit loans, in essence. We'll get back to that later. There's an important tax [ imposed ], and this leads to a profit of more or less EUR 2.5 billion. This is the whole picture of the bank-insurance company, but now we'll go more into detail. We've already mentioned interest incomes are still the most important source of income for KBC Group. If you're going to look at the evolution, they're not very simple conditions, which is to say interest is still extremely low. It has a negative effect on our results. Well, the economic growth was good, but not very good. But even then, we were capable to get 2% more interest income in comparison to the year before, 2018. Where does it come from? Mainly, it comes from 2 big pillars. On the one hand, we have been able to sell more loans to the clients. So loans for the financing of the economy, a nice growth there. And we have been able to increase the margins on this loans. There's a lot of pressure on those margins. But we have been able to get them 195 points (sic) [ 1.95% ]. That is a slower decrease in comparison with the last year, but this is linked to the fact that there is a lot of liquidity, there's a lot of demand for pressure with a downward pressure on the margin. And we also see that a number of products also see -- have an increase of the margin, for example, mortgages in Belgium, but also in other countries. In Central Europe, for example, we see an increase of the margin. This has led to the fact that the volume, the number of loans multiplied by the margin that has led to the fact the income that we get from these loans, we have seen a slight increase in comparison to 2018. We've also seen that the financing cost, KBC has a good reputation. And because of that quality, because of that reputation, we have been able to reduce our financing costs also. And then the third pillar is that we have been able to generate more income by working on the interest difference between the European -- the euro and the Czech crown, for example. In that way, we have managed to get more income from the Czech Republic in comparison to 2018. But what is still a challenge is the low interest rates. They're very important for the transformation results, the transformation to obligations on the short term to the ones in the long term. We've seen that the ones that we have -- that those -- that we have a problem there. So they are a lot lower in comparison with the years 2015, 2016, 2014. And that has had negative to our results, and that has been translated into a downward pressure on those net interest results. But anyway, still a good result. The second important pillar is nonlife insurance. We see an increase of the premium income, a good results, 4% in Belgium, but mainly at Central Europe, where we see double-digit figures in most countries. And that means that the bank-insurance model is doing very well also in Central Europe. And now the [ damage ] cases, we see that there is an increase for 2018 (sic) [ 2019 ]. What does the quality mean? If you're going to translate it as a combined ratio, then we see the combined ratio for 2019 is 90%. That's a lot lower than the objective of 95%, and that's a very good result also if you're going to compare with the extraordinary year 2018, where the combined ratio was only 88%. So nonlife insurance, good protection, but also good quality there. Life insurances then, that was not an easy year. Low interest rates, again, a very important factor here, especially in Belgium. There's also the taxes that have to be paid on this product. It's 2%, and that means in reality that for 2019, we have seen a slight increase of about 2%, mainly due to Tak 23, not because of Tak 21. So these are the noninterest-related products, they remained flat. So the unit-linked products, we see an increase here of 4%. Now regarding another contribution pillar, very important for the incomes, those are the commission incomes. So the generation of fees of commissions on investment product, asset management, insurance, but all other kind of incomes we get from credit-paying facilities, and we see a very clear increase of 1%. And this is mainly due to something that happened in the beginning of 2019 -- or rather the end of 2018. I'll explain. 2018, at the end of that year, we had a period of 6 weeks with a lot of visibility for the financial markets, and these markets really dwindled. That means that the asset management products that were asset managed, that we manage, so where we get commission incomes, those had dropped a lot to EUR 200 billion. They had dropped. That is what you see on the right-hand side diagram. So in 2019, it then recovered. And this had an effect for the rest of the year because, as you can see, the asset management has increased a lot to EUR 216 billion. So this means that on the one hand, we have grown, but also that the financial markets have recovered during the year 2019. This means that the assets under manage are contributing to the generation of management commissions. And management fees, they have increased slightly. But on the other hand, we also see an increase in the entry fees for the same kind of products. Now banking products, banking services and loans, credits, we see an increase of the commission incomes, and we see also life insurance pillar, we see the same thing happening there. Now altogether, it was a very difficult start in 2019. Still, we have a good result for the whole of the year. If we look at other incomes, the lines that are contributing a bit less to the balance and losses statements of the KBC, we see a drop of the trading and real value (sic) [ fair value ] results with about EUR 50 million. Actual value results, it's about -- that is because of the lower value of a number of instruments. And those -- that is mainly linked to the fact that also the interest rates in 2019 dropped even further, while all those products were tailor-made for increase of the interest rates. Now on the other hand, the net income that are coming under the other incomes, there is -- the support to companies such as CMMS (sic) [ CMSS ]. We see an increase of about EUR 60 million. This is something that I should explain because most of those are contributed to by an added value in China -- in the Czech Republic of the things that we bought over there. This is an evaluation difference not rather a difference due to the income. So those other net incomes have remained stable for 2018, 2019, although an acquisition changed the situation slightly. Then the costs expenses, 2% increase. So you can have -- at the diagram in the left hand, you see all the different countries, all the countries with their costs, these are mainly linked to taxes. EUR 491 million, it's a big amount. We -- there's nothing we can do about that. And the costs have increased again here with 6% in comparison to 2018, so we cannot control. And that means to make an analysis of how good did we control our costs. I have to tell you the following: the cost that we have to pay to the National Belgian Bank (sic) [ National Belgium Bank ], the central Belgium bank, other countries, all those -- although costs increased with 10%, but if you then have a look at the cost base, and you take away the effects of CMSS, CMSS was a company that wasn't there before, then we see that the cost evolution 2018 compared to 2019, that is flat. That means that it is extremely stable. In other words, 2019, we were perfectly able to reduce the cost that were not linked with bank taxes. That had nothing to do with the supervision from the authorities, nothing to do with acquisition. We were able to keep those costs reduction. So we have to say that in 2019, we were totally in control of our costs. And this is a very important message. If you bring all of that tax in 2018, if you remove bank taxes from that, then that means that 58% becomes 51%, and that is the same figure as we saw in 2018. 2018, it was 50.7%; 2019, it was 50.6%, so more or less, the same. Depreciations. So depreciations on credits, as it has been explained this slide, and you also have depreciations on share, portfolios and others. Now this is something that we could actually neglect. If you look at the depreciation on loans then it -- that is EUR 203 million. That's a lot more than in 2018 where we have readmitted in our portfolio. Why is this? The figure in 2019 is normal if you're going to compare it with a figure of an abnormal year, 2018. We enter now an environment where we are giving loans and where, with time, we will have to depreciate these loans. Now what does this mean for the cost ratio? This EUR 203 million that were mainly for Belgium and core countries, that the credit cost ratio for the group, for KBC Group, is 0.12%. If you look at it on the long run, for example, the last 20 years, then you see that the average cost ratio is 0.41%, and you see that 0.12% for this year is low. 12 basis points on the group; in Belgium, it was 22 basis points; Czech Republic, 4; Ireland, it was minus 0.2. So that means that we were still readmitting. That was a lot than 2018. Hungary, slightly negative, while Bulgaria and -- so if you're going to -- we had a good control of the cost -- credit cost ratio over the whole group, the whole territory. And then if we are going to look -- if we're looking at the impaired credits, then that is now 3.5% for the group. If you are going to compare it for credits with a delay of -- an impairment of more than 90 days -- if we look at the taxes that were paid, 720 -- EUR 626 million (sic) [ EUR 627 million ]. This is a little bit less than last year, linked to 2 things: smaller profits, slightly smaller profits; and also the fact that the profits that we booked -- the part that we took over in Czech Republic that there has no -- no taxes have to paid on that because this is just an accountancy aspect. Now if you are going to look at the results per division, then you see that Belgium is the most important factor for cost, 54% of the total result is generated by Belgium. The other countries are generating the rest of the figure. I used to say, let's just assume that tomorrow, the day arrives that we have 50-50. In this case, this is something I would really like to see. If the nominal result in Belgium would remain stable, then it would be good to go to a 50-50 ratio. There are some values from here on [ 2007 ]. I'm not going to look through them. The main differences are the international market. This means that the readmittance in Ireland, they have reduced a lot. In Czech Republic, that was a top year, both for the operational production, for their loans, their credits and deposits, their insurance, their asset management products, but also they had luck for the redistribution of CMSS. So that had an effect on the account you see for these results. Now we have a very good P&L. We have been working on our risk weighted assets. We have been looking at our liquidity coverage ratio. So you see that, that ratio is 17 -- the common equity ratio is 17.1%. That's an increase in comparison with 2018. And this is linked also, I'll get back to that later, to the payment of dividends. The dividends, on the one hand, are -- dividend was paid out at an interim dividend for EUR 1. That all went as planned. But then the final dividend that should have been paid in 2020 in May, well, they were then influenced by what's going on in the world at this moment, the corona pandemic. And so another -- these decisions were changed. So the nonpayment of that dividend has led to a common equity ratio of 17.1%. That's a very good figure. If you look at the capital figure with the regular minimum, we have 2. 10.55% was the end of 2019. Now in the meantime, the authorities have -- because of the corona crisis, they have decided that certain buffers will be delayed. That means that 2.5% will be liberated, and this means that it will no longer be 10.55%, but 8.55 -- 8%. That means concretely that we have a buffer of about more than 9%, 9% on EUR 99 billion. Rounded up, that's about EUR 9 million -- EUR 9 billion of a buffer to tackle the corona crisis. So we are a very solid business. When we look at the liquidity ratio, well, that is 136% and 138% on the short term. Those are the same rates as 2018. So very stable, in other words, and very solid. Then if we look at our insurance business, if we look at the solvency, it's 208% at the end of the year. So that means that the insurance business is also very solid within KBC. That was about it for our figures. Then what happened in 2019 on other -- in other respects. So let's talk about our strategy and our realizations. Let's first take a look at our strategy. Nothing new. We always depart from our company culture that has been called PEARL for years. I think you know what it stands for by now. It stands for the integration of an entire company culture based on one fact, the customer that is put in the center of it all. You can see our values to the left here. These values are incorporated in our entire organization group-wide. As a company, we base ourselves on a certain strategy, and that means that nothing has changed there. It means that we work as a bank-insurance company that departs from sustainable growth to play its role in society, departing from the customer amidst all of our activities. And by combining all of those points, we become the reference in the bank-insurance business. Nothing new. In 2019, we applied this as well, and we achieved very strong and solid results. Regarding sustainability, this is something that KBC has been doing a number of years now. And also in 2019, we are taking the next step to sustainability and incorporating the sustainability in our company culture. What does that mean concretely? Well, it means that we, as a company, we incorporate our sustainability in our activities in 3 different ways. First of all, we try to limit the negative impact that we have on society. Concretely, that means what is our mission as a company, what are the loans that we sell, what are the consequences to the emissions in the world and if we sell funds to our customers well, to which extent are those sustainable funds or traditional funds, in other words, how can we tackle or reduce the negative impact that we all have as a company or as humans. Other -- on the other hand, how can we spread or increase the positive impact that we have, and we have defined 4 different domains for that. Of course, you can focus on everything, but that's just a waste of energy. It's better to focus on a limited number of points to really support that. And that is why we selected 4 points: financial literacy, environment, ecological aspects and then entrepreneurship and then health and graying (sic) [ aging ]. And also in this way, we try to increase our positive impact, and we are really focusing on this in the whole of the company. And then last but not least, the third pillar, stimulating responsible behavior in the entire group. And this is something that we have also incorporated in all of our daily activities, in all of our trainings, and we also spread this in a KBC University program. This is a training institute within the KBC Group, in which all of our managers, directors are trained according to this sustainable model, which is also very important is that we trigger our staff day-to-day -- on a day-to-day basis by means of a couple of dilemmas that we use: what has happened within this framework, what are the specific facts. I'm not going to talk about everything, but we have different dimensions in the different countries. Here on this slide, I'm just going to pick out a couple of them. We have the sale of durable -- sustainable funds to our customers. The goal was to have EUR 10 billion by the end of 2019. Well, we are now at EUR 12 billion. So we have overachieved. We have sold more 1 year in advance. So we have clearly met our goals and exceeded them. That is why we have adjusted them above. And then renewable energy, and we've also achieved our goal for 2030. 50% of our credit portfolio should be in renewable energy. We are now at 57%. So that makes a huge difference. On the other hand, we also focused on the reduction of our own greenhouse gases. We've also met that goal. Green electricity, there as well we have -- not met our goal, sorry, but we are very close to it, and we have adjusted our ambition as well as sustainable in its activities. And then last but not least, we have also -- we've also endorsed different pacts. We also collaborate with other banks. PCAF, for example. We also have the Collective Commitment for Climate Action (sic) [ Collective Commitment to Climate Action ], which we have endorsed. So these are all activities that will become more -- that will come more and more to the surface in our daily activities in the way in which we structure ourselves. The umbrella phenomenon of all of this is the Sustainable Finance program. Regarding the consequences of this all, well, this translates in a recent update of our policies. We have a couple of group-wide policies, both for the bank activities and for the insurance activities, and these policies are currently revised, updated. And that very concretely means that we focus on energy and biodiversity, that we take a couple of new measures for energy. We mainly focus at the coal production with our customers. We've applied more strict demands, and we have recently launched them. And our conditions have become more strict in this respect. The same can be said about biodiversity. There, too, we have made a couple of measures more strict, and there we went a bit further. We have just continued our operations in this respect. Also, the investment funds, we have a very strong commitment that all fossil fuels are completely excluded from our asset management. Regarding our presence in the different countries, well, nothing new here in the global spread. In other words, we are still active in the 6 core countries: Belgium, Czech Republic, Slovakia, Hungary, Bulgaria and Ireland. In those countries, we have banking and insurance activities. And in those countries, we want to continue growing. We want to become one of the references in banking and insurance, and we do that with the same strategy in the whole group, with the same conditions around capital and liquidity. In 2019, concretely, we did a couple of takeovers. As I've mentioned before, the acquisition of the remaining part of the CMSS building society (sic) [ construction savings bank ]. And in 2020 -- between 2019 and 2020, we also announced that we did an acquisition, a takeover in Slovakia, OTP Banka Slovensko. It's an addition to our existing activities. This process is currently being approved and should normally be finalized by the end of the second quarter. On top of that, we have a couple of activities that are no longer in our core activities, for example, the sale of NLB Vita, it's our insurance activity that we built up with the bank NLB in Slovenia. In life assurances, we are no longer active in that and are no longer interested in that, and that is why we divested this, and this process is currently ongoing. And then last but not least, in the course of 2019, we also realized the sale of the company credit portfolio in Ireland. This concretely means that we are now active in Ireland as a bank insurer, but mainly in retail and sale. And then last but not least, what we saw in the past years, digitization. This is something that can no longer been denied. We have been seeing this for years. Customers are changing their behavior, and we see that customers use digital applications more and more. KBC has invested a lot of time and means in the past few years, EUR 1.5 billion to be exact between 2017 and the end of 2020. That's a lot of money, but we see that it pays off. We see that KBC is one of the companies in Europe where we can really be at the forefront of the digital space. And I'm saying this on the basis of a couple of researches that were performed by a couple of external parties. What is very important is the way in which it is taking place. We are trying to see how our customers are dealing with this, how they are absorbing the rhythm of all of these applications. And on the basis of that, we determine whether we should continue our activities on this -- in this respect or not. 81% of the interactions that our customers had with KBC were digital, took place by means of digital instruments; and 19% of our customers do not use digital means. That is still 1 out of 5 customers that is not using the digital means. So the big majority is -- has shifted to digital interactions, but there is still a minority that does not communicate with us in a digital way. The dark blue line here, 54% of our customers exclusively works digitally with KBC. And if you compare that to the 19% that doesn't, then that's significantly more, it's 2.5x more. So in that respect, we do see that customers are shifting more and more to the digital approach. In the context in which I'm talking now, well, 56% of our customers have not visited a KBC office in the past 6 months. So 56% of our customers have not visited a physical KBC office in the past 6 months. So this is a very remarkable figure. And this is a figure pre-corona. And to put it differently, given the difficulties that we are all experiencing today to go outside, so this is a very strong figure, and this has only promoted, boosted the digital approach in 2020. So in other words before corona, it was more of a trend maybe, but now after corona, it will be irreversible. And KBC will, therefore, be focusing on that trend very heavily in the upcoming months. We will attract our customers to this digital story, and we will try to facilitate everything for them in this digital approach. And this encompasses everything. We have contactless payment. We have integrated them -- this in Apple Pay, Google Pay. We do smart banking in practically all countries. We have online cash loans in all countries. In the Czech Republic, we launched a very nice application recently, and we are focusing on this digitization very much. It's also a trigger for complexity in the organization. We want to reduce the complexity. We are trying to reduce the complexity that we have internally in our organization. And more specifically, we do not want to transfer this complexity onto the customers. We want to make it hassle and friction free. So in other words, we want to make it as easy as possible for the customers. Then the dividend for the financial year of 2019. The dividend policy of KBC is quite clear. We pay at least 50% of our profit, including the AT1 coupon. And this means that the Board of Directors can determine how much that is. And furthermore, an interim dividend is paid out of EUR 1 per share, normally in November of the year. For the financial year of 2019, the interim dividend was paid out in November 2019. And for the final dividend, which was supposed to be EUR 2.5 per share, plus a share buyback of 5.5 million shares, this was announced. And then the corona crisis hit. And this crisis has had an enormous impact not only on the health but also on the economy. And this has led the ECB to send out a recommendation, and this recommendation was quite straightforward. And it said that at least until 1 October 2020, no dividends will be paid out by banks or bank-insurance groups, such as us, and that there would not be a commitment to pay out dividends the financial year 2019 and 2020 and to refrain from purchasing shares to remunerate shareholders. Given these recommendations, the Board of Directors of the KBC Group has decided to proposal -- to withdraw the original proposal to pay a final dividend of EUR 2.5 per share and EUR 1 per share as an interim dividend. This has been postponed and the share buyback of 5 million of shares have been canceled. This feels like the right decision, and let's keep our fingers crossed for 2020. And then I would like to tell you something more in general about 2020. 2020 will, of course, be the years in the history books as the year in which we were faced with the virus of corona. And well, this has led to the situation in which we are today. We have a very big consequences for the world health, for the way of living in our world. This way of living does not really match with our social behavior. We are social human beings, so this is very hard. And of course, the impact on the world economy is very big as well. We have a couple of measures -- a couple of measures have been taken to mitigate that impact. But the concrete consequences, well, those are still to be expected, and we still have to wait to see what they will be. Different sources have painted a picture of the possible impact. You can see it here for the different core countries, the possible impact. So in essence, it means a deep fallback in 2020 and hopefully, a recovery in 2021. Regarding the situation specifically for KBC, what does this concretely mean for a company such as KBC? It means 2 things. First and foremost, it is very clear that we take our responsibility. We will do everything to safeguard the health of our staff and our customers. I think that's one of the most important criteria to begin with. So we have to do everything to protect the health of staff and customers. Secondly, we need to make sure that the normal service provision is maintained, and that is what we did in first months of the crisis. And then last but not least, you need to play your role in society, providing loans, providing credits and so on. You need to continue that, and you need to guarantee that for the society. You have to do that in your company but also together with the government, and this is what KBC focused on during the past few months where it took responsibility. And for the first quarter of 2020, so the publication of 14 May 2020, well, in that publication, it will be very clear that the impact of the corona crisis is represented in the results, albeit partly. But still, how can you see that? Well, first of all, we have to look at the impact of the financial markets in a couple of derivatives, depreciation of those products, the credit spreads, the interest rates and so on. And this led to a reduction of EUR 0.4 billion. On the other hand, the credit cost in the first quarter has not been impacted yet by the corona crisis. It's still too soon for that, and it's still too soon to do concrete statements on the concrete impact of this crisis. But we are looking into this, and we are trying to estimate this as accurately as possible, and we will try to finalize that in the course of the second quarter. And then I have one final thing that I want to tell you, my biggest hope, actually. I hope that you all stay healthy in this crisis because that's what really matters. That's the only thing that matters. And I would like to conclude. 2019 was a beautiful year. 2019 was a year in which we realized beautiful results, good commercial performance, strong capital position, strong liquidity. We paid a specific attention to our role in society. We worked very hard on sustainability and providing products, credits, insurances to our customers. We took up our central role not only in Belgium but in all countries in which we are active. And we would -- I would like to thank all of our customers, shareholders and all of our staff for the beautiful 2019. The start of 2020 was horrible, to say the least, but I think we can really overcome this. And let's hope that in a couple of years, we can look back on the horrible 2020 but a beautiful 2019.

Thank you, Johan, for that clear explanation. As the Chairman of the Remuneration Committee, I will also explain the remuneration report, and this will also be done via a recorded video. It will be shown now. The remuneration policy of KBC in 2019 was based on a couple of pillars. First of all, we need to comply with the requirements and -- of the supervisory authority. A lot of demands for that remuneration policy. That means, secondly, we try to apply a balanced remuneration policy in which we focus on the long term as well. And last but not least, we try to have a motivating remuneration policy that allows us to attract a high-quality management. Those are -- these are the most important figures for last year. For the Board of Directors, everything remained unchanged, so the fees remained unchanged compared to the year before. That means that the directors all get a fixed fee of EUR 20,000. On top of that, an attendance fee per meeting of EUR 5,000, plus EUR 2,500 for directors -- foreign directors. For the members of the AC, we have an additional fee, EUR 30,000 fixed. And then for the Chairman of that committee, there is an extra fee. For the other committees that do not take as much time, that are less intense, we don't have an extra fee. For the Chairman, we have a fixed fee that has remained unchanged for years, it's EUR 500,000 per year. The total fee for the entire Board of Directors for the group in 2019 is EUR 1.6 million, more or less. Regarding the remuneration of the CEO and the members of the Direction Committee (sic) [ Executive Committee ]. In 2019, we had a fixed remuneration of EUR 1,250,000 for the CEO and EUR 853,000 for the members of the Direction Committee. As always, we have a variable remuneration. 60% of that fee is not directly paid out but is spread out. It's paid out in installments of a period of 7 years. The variable fee is -- has an upper limit, is calculated based on individual performance of the member of the Direction Committee of -- or of the CEO. And secondly, it's also based partly on the collective performance of the Direction Committee -- of the Executive Committee for which we define a couple of criteria. These collective goals have been kept quite constant in the past few years. They are formulated in 4 big blocks. First of all, 25% is about the implementation of the strategy that we have defined together, and it also encompasses elements such as the sustainability. Another 25% is about the financial figures, the financial planning on the short term. So the planning that has been fixed for the year. If those criteria are met, then another 25% of the variable fee can be paid out. And then another 25% is about risk management. So there, the different risk parameters are looked at: are they respected and so on, are they complied with. And then the last 25% has to do with the satisfaction of the different stakeholders, the satisfaction of the staff, the customers and the relation with the society. We have specific meetings for that. So that, all in all, designs our remuneration policy, our balanced remuneration policy. The maximum amounts of the variable fee can be -- that can be allocated, well, you can see them here, for the CEO, that's EUR 450,000. For the collective performance and for the individual performance, there's another EUR 175,000. And for the members of the Direction Committee, you can see the figures as well. As mentioned, 60% of the variable remuneration is paid out in installments over a period of 7 years and is subjected to a penalty -- a possible penalty. It can be completely withdrawn if that appears to be necessary. And half of the money that is paid out is only paid out for half in cash, and the other half is paid out in phantom stocks, so instruments that make sure that the payment is again postponed for 1 year in order to take into account the evolution of the KBC share on the stock market. So that means that only 20% of the total amount that is calculated is directly paid out. The rest is postponed and is subjected to a possible penalty. The real amounts that are allocated, not paid out but allocated, in 2019, you can see them here, it's about EUR 600,000 for the CEO and about EUR 350,000 for the members of the Direction Committee. For 2020, in the beginning of this year, we decided to adjust the fees on the basis of the indexation. So we did the same thing as we do for the rest of this staff. So we did an inflation adjustment. So the amounts that will be paid out in 2020 as fixed fees, you can see them here on the slide, it's about 2% higher than the past year. And then lastly and -- well, I've also mentioned it, we also look at the broader market. Are we sufficiently competitive to attract strong managers? And for that, we do 2 things. So first of all, we work together with the big Belgian companies, so the companies that are represented in the BEL 20. And we do that as well on the basis of an international peer group of 28 European financial institutions, so institutions that are more or less of the same dimension as KBC. And on this slide, you can see, circled in red, the position of KBC within this universe. The upper 2 slides are a comparison between the CEO remuneration, whereby KBC is circled in red. On the one hand, we have the peers, so the other financial institutions; and on the other hand, the BEL 20. There, you can see that we are slightly above or below the average. Of course, taking into account that KBC as to performance is one of the best. So in that sense, I think it also reflects that we are not striving for extreme remunerations, but correct remunerations. And you can see the same comparison for the members of the Direction Committee. So here, you can get an idea of how the remuneration policy of KBC can be compared to other comparable companies. Then we will now proceed to answer the written questions that were sent to us. In doing so, the following rules will be applied. The directors will only have to answer the questions that are put to them in relation to their reports or the items on the agenda of the shareholders' meeting. They will also refuse to answer if the communication of certain information or facts is likely to damage the company or is in breach with the confidentiality agreements entered into by the directors or by the company and in the event of a manifest abuse of the right to ask question. There were 3 shareholders who submitted their written questions. Those were written -- they were posted on the website of KBC on the 4th of May. We will successfully answer the questions from Mr. Barberien, Mr. Musschoot and Mr. Prelovszky. The questions under Mr. Prelovszky by the -- will be answered by Mr. Jeanquart. As we have already said, he's taking part in this meeting.

So I will start with questions that were submitted by Mr. Barberien. All the questions can also be read at the website, so I will not just read them completely. So first of all, the first question is about the fact that if we -- it would have been better to postpone the general shareholders' meeting instead of the format that we are using now. We opted to hold the meeting at the planned date because we thought that was the best option because that way, we could close the financial statements. We could approve the allocated results. We could deal with the appointment report. So that's why we made this choice. The second question is a question for Johan.

So also very welcome to the general meeting, as the Chairman already said, I received another number of questions of Mr. Barberien, and I will give some answers. So the first question is about the share positions of KBC in the share packet of the National Bank that at the end of the 31st -- of the -- for the year 2019 and the difference compared to the same period, 2018. Now at the moment, we hold [ 6,044 ] shares of the National Bank, and that's the same number as we had in 2018, as we had in 2017 as well. The next question is a question about granting credit at KBC where credits are granted with a variable or a fixed interest rate. This question was asked in different aspects. How percent -- how much of the percentage is variable? How much of the percentage is in fixed? And what's the ratio towards Belgium but also in all the other countries where KBC is active? It's a very long question. I do understand really well that it's not always very easy to follow this through our website. So -- and furthermore, we're going to publish these figures. But let's start with Belgium. Belgium, we have everything, all the credits that are granted by KBC Bank and CBC Banque. There's the portfolio of mortgages. It's divided as [ 56% ] fixed rates and 23% of variable interest rates. We should have one comment here, and that is the fact that in Belgium, we also have variable interest rates for 5 years. And I know that, for example, in other markets, for example, in Eastern Europe, Central Europe but also in the U.K., for example, that those are shorter periods of fixed. They are regarded as variable. So then other loans, so consumer loans, for example, they are always fixed rate. Company loans, prepayment loads, shorter maturity, always fixed rates. And then there's a real investment loans for enterprises. 57% has an interest -- fixed interest rate and 43% variable. There's a bit of a difference between SMEs and the corporate segment. In the corporate segment, we see a little bit more variable interest rate, 55%. In the SME segment, we see a little bit more fixed interest rates, 70%. Now this is something that's nice. That is how it is for Belgium. It differs for the Central European countries. Country per country, we see a lot more variable interest rates: Slovakia, 100%; Czech Republic, 100%; Hungary, 87%; in Bulgaria, 100%; and in Ireland, which is now Central European country, also almost 100% variable rent -- interest rates. This is for mortgages. And if I look at the other countries, regarding company credits, all their forms and the variability fluctuates around 60% for Czech Republic, Slovakia, Hungary, and Bulgaria. And for Ireland, we have a bigger ratio of fixed interest rates of about 2/3. So now for the whole of KBC, as a resume, we could say that all loans, credits -- company credits, mortgages, et cetera, 50% variable and 48% fixed interest rates. Or we could sort of go into this in a lot more detail, but I don't think it's very useful during this meeting. It's also very difficult to understand through our webcast. And there's another asked question about interest rate risk. How many of those interest rate risks are covered by derivative? And what exactly is covered? What's percentage of the loan portfolio is covered by this coverage? And then the second one, what are the parties that are used for the swaps, the interest rate swaps? It's a very pertinent question that is -- KBC has many different coverages. So interest rate could arise in very different ways. On the way -- on the one hand, it's by granting loans companies, to individuals, mortgages, et cetera, but also by the buying of bonds. Usually, all interest rate risks are followed up by KBC and, per definition, also controlled. And this doesn't make a lot of difference if they are bonds on the short term or in the long term, for example, 3 months or 10 months. We're looking at all kinds of rent -- interest rate risk. Now the second one, how do we look at it if interest rate risk is managed on the basis of the overall balance sheet, the portfolio level? We look at the overall balance sheet of both side of passive and the liabilities side. And of course, you have compensate effects of both sides. The interest rate risk on the assets is partly compensated by the liabilities side. If we have some kind of mismatch in between those 2 pillars, well then we have to deal with this via swaps. We're going to correct this with -- these are swaps for the whole of the portfolio, more or less, about 10% on the basis of external interest swaps with another party, external party. On the other hand, the other party that have the swaps, they are only professional parties. What are those professional parties? Well, in essence, they are major banks, other major banks, institutional players, major players that have developed their activities in this field. They take over this interest rate risk, and they will hedge them with swaps. And this is -- so this is all being accounted for in the hedging book by KBC. So that's about interest rate risk and swaps. Now in the same field, Mr. Barberien asked a question about Table 4.8.1. This is about derivative held for trading objections. You can find it on the Page 229 of the annual report. There's 2 parts of this question. What is the purpose of the swaps? And secondly, to which shares do they actually relate now? In a sense, the answer is the following. The swaps are related to KBC asset management activities or private banking KBC or -- so that means that within those asset management, et cetera, they are going to develop products, tailor-made some products for clients. And especially there, they deal with this kind of interest rate swaps. These products are related to shareholders. Per definition, I'll give you an example just to give you some more explanation. We're mainly talking about funds, funds that are working with a capital protection, which says that the performance of the funds is way based on shareholders' basket of the biggest 50 companies in Europe, for example. So how does this work in practice? The fund is composed -- they look at the performance of the parties that are -- at the basis of this. But the fund itself is not going to take a position for these shares necessarily. And so that's where they are working these share and swaps. That's where they're working with the structures that you can find at the table on that Page 229. And the swaps are therefore bought by KBC. They're covered by the market with the professional parties. As a consequence, it is very logical that we're not always talking about specific shares. Of course, there are different funds that work in that same way, and they have different objectives. And in that context, we're always going to hedge those shares and are being tailored on the basis of the underlying products. So we're talking about share baskets, indexes. And they are then managed by those investment funds, as I've already explained. And the next question is again about shares but then about the insurance company with the question, KBC has 1.4 billion shares (sic) [ 1.34 billion shares ] in its portfolio. Is it possible to give a complete list of the shares? So overview of different shares and the size of the position. Now to give you an idea, we have share positions, and we're talking about the structural investments with a specific objective, 390 companies. We're talking about 390 companies, a big list. And that investment portfolio is taken into our accountancy. There are investments in the long term that take into account the passive accounts of our books, the activities that we do on a daily basis within KBC. Those 390 lines, they fluctuate over time. And therefore, they are influenced continuously by changes. So what we can give you is a snapshot. Now to go into too much detail, we were talking about the different -- too much detail about the several share positions. I can tell you that the investment that we are doing are done based on a certain benchmark. It is MIC Europe and MIC World. MIC -- yes, for example, there's a ratio of about 70-30. From the moment that we take a fixed participations in certain companies and strategic participations, then this, of course, will be reported separately in the yearly report, the annual report. And you can find the information on Page 111 of the annual report. The next question of Mr. Barberien was about insurance activities. Again, if they -- we have investment in material fixed assets so, for example, retail shops, for example, in Antwerp. The answer is no. We do not have any properties or [ part in ] properties in Antwerp. So that's the second part. And the first part of that question answered then. We also received a question from Mr. Barberien about the capital increase for its staff members at KBC. That is something that we see appearing every year. This is something that's explained in a lot of detail in Page 166, 164 and 212 of the annual report. There were 3 more questions from Mr. Barberien. What conditions does the staff have to meet in order to participate? How many of the staff member participated in 2019? And then the subscription price was set at EUR 55.83, how did you establish that price? Now answered quite easily, we have 2 criteria. You have to be employed by KBC Group or defined institutions at the 18th of May 2019. That also means that if people are working towards their pension and they have a temporary scheme, they can still take part in this scheme. And then there was -- you have to be at least 6 months employed at the time of the start and you still have to be an employee at payment of the shares. So it's November 18 and December 19 of the year 2019. Those are the payment dates. In total, there was [ 5,500 or so ] members of staff that registered. And how do we come to that price, EUR 54 -- EUR 55.83? This is something that's established based on the same pattern that's used every year. Just to give you a short resume, this is something that the Board of Directors gives the mandate to members of the management committee, I'm one of those people, where we are going to observe the share prices. That's the highest at 2 points and closing point at a discount at 60.6%. And on the other hand, the actual net value per share depending on how it is -- there's 2 technical modalities here. The closing price is determined on the KBC share price on Euronext Brussels. So November 14, 2019, this was done. The net asset value per share is calculated on the 30th of September of 2019. And if you carry out those calculations and if you then add a correction for a discount of 66.67%, then we get this figure, EUR 55.83 per share. And then the following questions are for the Chair.

The following question is about the nonpayment of the final dividend, what we -- this is something that we published on the 13th of February. The question, is this based on the recommendation of the ECB? Or is it a legal obligation? What would have happened if we wouldn't have taken into account this recommendation? Mr. Barberien said that maybe we could have come to a compromise, come to a final dividend of EUR 1 per share. And then he also asked why we did not ask the shareholders, why we did not put it on the agenda and let them decide? Maybe why didn't we not give the shareholders the chance to vote another proposal? It is. We are indeed dealing with the recommendation of the ECB. But KBC didn't think it a good idea not to follow the recommendation of the ECB. Now to comply with the recommendation of the ECB, it was impossible to come to a compromise. So the shareholders that -- at least 3% of shares at KBC, they could have put an alternative proposal on the agenda. This is something that has not happened. And people could also cast a vote about the allocation of the results. They could have voted against the allocation, they could have abstained. So they could have made their voices heard. And then the last question or one of the last questions coming from Mr. Barberien was my succession by Mr. Koenraad Debackere. He asked when Mr. Debackere will take up this function. And how long will the provisional mandate last by Mr. Philipp Vlerick? What kind of remuneration will the new Chairman receive? Will it be at the start at the beginning of the year? Does Mr. Vlerick get a remuneration for the provision for -- the temporary chairmanship? Why does KBC granted chairmanship to a person who cannot commit to becoming a Chairman immediately on the starting date? And why has Mr. Vlerick not being chosen as a Chairman? He has the perfect profile and is also an important shareholder. One by one, I'm going to answer this question. It can be expected that Koenraad Debackere will take up his mandate in the course of October. He'll no longer work as the General Manager of the University of Leuven. The remuneration of Koenraad Debackere will be discussed in the Remuneration Committee, and the proposal will be submitted for adoption to the Executive Board, to the Board of Directors. And of course, remuneration for the year 2020 will be pro-rated starting at the time that he takes up his mandate. Mr. Philipp Vlerick will not receive any additional remuneration for the temporary chairmanship. And then the choice of Mr. Debackere, the Board of Directors is convinced on the advice of the Nomination Committee that Koenraad Debackere is the best candidate to assume the chairmanship. He's someone -- later availability does not change this at all. Those 2 or 3 or 4 months are not really going to make a difference. We believe that Mr. Debackere, because of competences, because of expertise, because he is independent, he will be a perfect chairman for KBC. Of course, Mr. Vlerick would have been a perfect choice as well. But we hold on to a tradition that our Chairman has to be independent for the governance code, so he has no structural relations with the shareholder. That's why we did not select Mr. Vlerick. And then the following question coming from Mr. Barberien was about the possibility with the fractional shares, on the one hand, in Belgium; on the other hand, maybe also with KBC. If people don't know what the fractional share is, well, it means that a share is divided in different pieces, different fractions. And that an individual investor does not have to buy the whole of the share but can buy several fractions of the share. And this will be carried out by a broker, by a manager. He will keep in the accounts who holds what. And then this then lowers the threshold for investor to buy certain shares. Now is that kind of system allowed by Belgian legislation? There's no explicit -- there's nothing that explicitly prohibits this system. There is nothing that says that it cannot be applied. But that doesn't also mean that you can apply it. What is certain in that, especially on Anglo-Saxon markets that people certainly do work with fractional shares. We see that -- if we look at BFX, they gave the possibility to the Board of Directors to omit this fractional shares. But there's nothing that really stops it from being possible. But on the other hand, we say also that there's a number of articles in the association -- Articles of Association that says it will not be possible, but we will have to investigate this further. The second element, as KBC, will we be offering that kind of system through Bolero, for example? As I've already said, this is something that happens a lot in Anglo-Saxon countries, a certain group of clients who do like to use that system -- with Bolero. And we do not really have the intention at the moment to do this in the future, mainly because we're not getting a lot of demand to getting this function developed. But on the other hand, we do offer a number of parallel products on Bolero that are not that different from shares, this kind of shares. For example, this allows people to spread their investment in different shares, different indexes. And it's also because ETF becomes more and more important on the funds market, and that's the reason why KBC has launched an artificial intelligence app on the market. This means that an investor with as little as EUR 1,000 can start investing in ETF. I think that was the last question of Mr. Barberien.

Then we go to the questions of Mr. Musschoot. The first question was the fact that because of the coronavirus crisis, the shares in banks have dropped a lot. And so the question is, are we going to make use of this to make acquisitions? I would like to say we haven't changed our position regarding acquisition. We've been looking for acquisition opportunities in our core countries, but we do adhere to very strict criteria, look at the strategic fit. Is this possible acquisition a good fit for KBC? Will it reinforce KBC in a certain country? Is a good integration possible? And of course, the price is, of course, also an element in the whole of this consideration. We will continue with that kind of a policy. We will continue to go looking for opportunities for acquisitions. As you know, in the last few years, especially in Slovakia or in the Czech Republic, we have made a certain acquisition. We will keep on looking for opportunities. But I cannot really tell you anything more about the future. Then the second one, if KBC sticks to the strategy to only -- to be only active in Slovakia, Belgium, Ireland, Czech Republic, Bulgaria and Hungary. This is -- these are our core countries. This is how it will remain for now. But later during the year, KBC will communicate about an update of its strategy that will be taking place in a few months. Then the next question. All European banks face a difficult macroeconomic environment. What effort is KBC making to make the policy more favorable to the banks? That's the first question. And the second question is -- this question covers both the fiscal policy of the national government and the monetary policy of the ECB. As you all know, the monetary policy of the ECB, this low interest rates has an enormous impact on the profitability of financial institutions. I'll answer this question quite generally. Now the functioning of banks has been influenced -- and also perception has been influenced by what happened in 2008, 2009 financial crisis. As we all know, this has not led to an increase of the popularity of banks. And a number of essential elements have been changed since that era. I would like to talk about 2 points here. There's a quality like the reinforcement of financial institutions, amongst others, inspired by own initiatives of shareholders. This is something I can certainly emphasize for KBC. It's very clear that our core shareholders really have guided us to a better solvability, et cetera. This translated into the stronger institution that KBC is today. And then there's another one coming in the noise pushing for more capital. Now over time, KBC has been taking up a very clear role. We have improved our Articles of Association. We are client-focused. The focus is central. That's our basic principle. And this is how we want to influence public opinion in a positive way as well. This means, of course, that, for example, the savings of our clients -- if we get those into our banking clients, ask for them and then we make sure that they are there, that they are available. On the other hand, we want to convert these savings in credits, so in loans in the society as it's so. And that's what we have been doing since 2018 and 2019. It also made sure that the banks in general and the KBC as well got a better perception in society and gained more influence. In the whole process, regarding the measures that were taken by the government, measures that are taken for financial institutions and so on, one of the measures that is most remarkable, and I've also discussed it during the results discussion of 2009, are the bank taxes that need to be paid and that have a significant impact on the profitability of the banks. These bank taxes are still there. And with the corona crisis, it has become very clear that these bank taxes were focused on the fact that the governments should have supported the banks in 2008 and that they have gained a completely new meaning. The corona crisis is a crisis that hits us in general, that hits the economy in general and that hits our SMEs. The banks, especially in Belgium, together with the government, are used to support these customers, these SMEs. And that's all included in a bank plan. Of course, KBC endorses this bank plan, but the environment is completely different than in 2008. So it only seems logical to try and see whether we can review these bank taxes in the future. So in other words, it's a positive way of influencing by taking up that role in society day to day. Second question was more about the ECB. More specifically, the impact of the policy of ECB on the profitability of the banks. I will keep this short because I think then we had unseen circumstances. The governments and the ECB applied a new monetary policy with lowering the interest rates and so on. Seeing the context of the circumstances back then, there were not many alternatives. It's a fact that this has had a negative impact on the financial institutions. But of course, we have evolved through time, and there is a difference between the way of the American federal banks and the European banks. And today, in the corona crisis, we see that the advantages from back then have a negative impact today. But again, I think we have made very clear to the government and the central bank that we are worried via the European Banking Federation, via other councils and committees. What the future will tell, we will have to see. I just wanted to mention one more thing. If you really look at the role that KBC plays in society, if you really want to dig into this, then I can advise you to read the report on that, which was published together with the annual report of 2019. There was another question from Mr. Musschoot. He refers to an opinion piece that was published in the newspaper De Tijd on the 5th of March 2020. And he quotes the chief economist Jan Van Hove, "The fact that the corona crisis will cause business casualties is regrettable at micro level. But at the macro level, it gives new oxygen to the global economy reflected by more market opportunities or more staff. The global economy will be stronger after all of this." And the question of Mr. Musschoot is, are these statements also the official position of the KBC Group because, after 2 months, it appears that without the support from the government, the companies would not able to survive? Now in answer to this question, well, this question actually consists of 2 sentences from the entire article, and the entire context of the article is not reflected entirely in these 2 sentences. So Mr. Jan Van Hove tried to make a very clear statement. If you look historically, well, then crisis has come and go, and every crisis has its unity. But in essence, the conclusion is that in crisis, companies survive, but other companies fail and disappear. And this, in a historic perspective on the long term means that growth of companies, failing of companies is impacted by this, that we also have a revamping of the economy at times, and that economy can recover. That's the historic perspective. And within this perspective, the statement of Mr. Van Hove is, of course, correct. But in the context here, the corona crisis is a crisis that has a lot of details. It's very intricate. It hits every country in the world. And the pattern that we see in this historic critical evolution is something that also comes back in the corona crisis. At this point in time, the repercussions are not entirely clear yet, but we think that the repercussions will be even bigger than the previous crisis. Regarding the revamping, well, this will depend on the possible scenarios that we can have: will we have a quick recovery of our economy, or will we have a second fallback, will we have a second lockdown and so on. So again, here, the history will -- well, it will appear after a couple of years, which scenario will take place. So I would like to conclude here.

And then let's take a look at the last list of questions, questions from Mr. Prelovszky. We got a whole range of questions. It's a document of 11 pages and 59 questions. You can find this document on our website. As you know, the people who were here during the past meetings, Mr. Prelovszky has already told his story, to a large extent, at the annual meetings of 2018 and '19. And I would, therefore, like to repeat for the third time that the general meeting of KBC is not a forum to ask personal questions, questions regarding the personal relationship of the client with the KBC. Questions from shareholders may only relate to the agenda and the report. The personal or individual dossiers cannot and will not be discussed, and personal data cannot be shared during meetings like this. Consequently, none of the questions that relate directly or indirectly to these customer relationships will be answered today. This is all the more the case now that many of the points raised are the subject of disputes in court and before administrative authorities. I would like to repeat, however, that it is KBC's goal to meet the expectations of its stakeholders and its customers and to comply with all of its contractual obligations. We have policies that we apply very strictly and that we monitor constantly as to compliance. I would, therefore, also like to contest the allegation that these complaints would demonstrate that the internal control functions within the KBC Group should be strengthened. Furthermore, a couple of questions will not be answered because they do not have anything to do with the agenda of the meeting. And for reasons of transparency, the KBC Group has decided to publish all of the questions of Mr. Prelovszky, so also those that will not be answered today for the reasons that we've just mentioned. Furthermore, we do not want to respond to Mr. Prelovszky's request to read out all of his questions nor to his new request to have his specific questions answered by the specific directors. The same applies, for obvious reasons, to his request to answer again to the questions that he already asked during the meetings of 2018 and 2019. Our first question, which will be answered here, is aimed to Roland Jeanquart, and I would like to give him the floor.

Thank you, Mr. Chairman, and also good morning to you all. And so first of all, I would like to thank Mr. Prelovszky for his questions, the 12 questions that he aimed at myself. And I would like to repeat that I will not read out all of these questions out loud. I agree with what you, Mr. Chairman, have just mentioned. And secondly, second thing that I would like to say to Mr. Prelovszky, questions from shareholders may only relate to the agenda points that are reported on by the statutory auditor. And in my case, that's the annual accounts and the annual report of the Board of Directors. And in this respect, I would like to refer to Article 7:139 of the Code for Companies and Associations. If I look at the questions of Mr. Prelovszky, so 12 in total. For questions 1 until 11, I can refer Mr. Prelovszky to the opinion of PwC company advisers represented by myself, so Roland Jeanquart and my colleague, [ Jean Mullemont ]. So the opinion at the KBC Group NV closed at 31st of December 2019. It's an opinion for the consolidated annual accounts and the company annual accounts. You can see that these opinions are dated back to the 1st of April 2020 and are therefore a good declarations. So a judgment without reservations with an additional paragraph regarding events after balance date. I think that this opinion is sufficiently clear and also sufficiently specifies what the responsibilities are of the statutory auditor, what the responsibilities are of the Board of Directors and clearly describes what the scope is of the activities of the statutory auditor. I can confirm that our activities have been done in accordance with the International Standards on Auditing, the ISA. And I could also say that our opinion contains a very detailed description of the core points of the audit. Another thing that I would like to say to Mr. Prelovszky is that in my capacity as statutory auditor, I am subject to a professional secrecy, for which I can get penalized on the basis of Article 458 of the criminal code. And that is why I cannot answer to personal questions or to discuss personal dossiers. And all of those 11 questions were about personal questions. So that is why Mr. Chairman, I cannot provide an answer to question #1 to 11. I can only refer to the opinion. The last question, question #12 of Mr. Prelovszky is about the insurance of PwC. I can only refer Mr. Prelovszky to Article 24 Paragraph 2 of the Act of 7 December 2016 on the organization of the profession and the public supervision of company auditors. On the basis of this law, all the statutory auditors in Belgium are obliged to have a civil professional liability insurance, which needs to comply with a couple of conditions. First of all, a coverage of at least EUR 3 million per year. And this amount is increased to EUR 12 million for tasks, assignments that are carried out in public organizations, public interest organizations, for example, KBC. Secondly, the policy needs to cover all the assignments that are reserved by the law for auditors. So I can only confirm to Mr. Prelovszky that PwC, so company auditors in Belgium, that PwC has taken up the necessary insurance contracts to apply with all of our legal obligations. If Mr. Prelovszky desires more information, then I can refer him to the transparency report of PwC because we are obliged to draw up an annual report every year. So I would like to refer to that report, to the transparency report of PwC dated on the 30th of October 2019. It is available on the website of PwC Belgium.

Thank you, Mr. Jeanquart, for your answers. Then we had a couple of questions directed at Mr. Koenraad Debackere. They relate to his qualifications as an independent director and also relate to the total number of independent directors on the company's Board of Directors. Mr. Koenraad Debackere meets the criteria of independence laid down in Article 7:87 of the Belgian Companies and Associations Code and the Belgian Governance Code 2020. Until the 1st of December 2019, he was not an executive director in Cera, and he represented Cera on the Board of Directors of KBC Group NV. His mandate in Cera has now ended, and therefore, he can now function as an independent director in KBC. His academic background and his focus on integrity guarantee that he will perform his mandate fully independently. The Board is, therefore, convinced that he will perform his duties in complete independence. Then a question about the number of independent directors for listed companies, such as KBC Group, and there's the obligation to have 3 independent directors. This is also mentioned in the Companies and Associations Code. The number of independent directors on the Board of Directors of the KBC Group meets these legal requirements. The choice of governance model is up to the company. The KBC Group believes in the strength of the governance model. This is explained in Article 151 of the annual report. In this respect, we want to refer to the role of the shareholders syndicate concluded between Cera, KBC Ancora, MRBB and the other permanent shareholders. This agreement was concluded in order to protect the stability of the shareholding and long-term focus of the group and to coordinate the policy of the group. To this end, the core shareholders act in concert at the general meeting of the KBC Group, and they were represented on the Board by 9 directors on the 31st of December 2019. And as of 7 May 2020, the Board will have 16 members, including 3 independent directors; 3 members of the Executive Committee; the Direction Committee, so the Group CEO, the Group CFO and the Group CRO; and 10 representatives of the core stakeholders. Then we had a couple of questions for Ms. Papirnik in connection with her status as an independent director and her activities as a member of the Audit Committee and the Risk and Compliance Committee. Mr. Val Papirnik, whose reappointment is on the agenda today, has been an independent member of the Board of Directors since the 3rd of May and also of the Audit, Risk and Compliance Committee. At the time of her appointment as an independent director, Ms. Papirnik met the criteria of Article 526ter of the Belgian Companies Code and Corporate Governance Code. Ms. Papirnik is today proposed to be reappointed as an independent director, meeting the criteria of Article 7:87 of the Belgian Companies Code, which is applicable to the KBC Group since the 1st of June 2019, and also in accordance with the new Belgian Corporate Governance Code, which is applicable to KBC as of the 1st of January 2020. She will remain a member of both the Audit Committee and the Risk and Compliance Committee of KBC Group NV. With regard to the concrete activities of these specialized committees, I would like to refer to the report -- reporting in the KBC's annual report. And then another question was posed regarding the pending court case before the criminal court in Ghent. And here, I would like to deny that the file is pending for the criminal court in Ghent. Well, the fact that this would be kept a secret, I clearly deny this. In this respect, I would like to refer to the press release of the 27th of June 2019, which can still be consulted on our website. As also stated in this press release, KBC is convinced of its innocence but wishes to conduct the debate before court and not in public, and so not during this annual meeting. And then Mr. Prelovszky has asked a couple of questions about the anti-money laundering approach by KBC. The fight of money laundering and the fight against terrorism is -- or terrorist financing is high on the agenda of the top management of KBC. In the past years, KBC has made considerable efforts to implement the new regulations that change constantly the way in which KBC investigates suspicious transactions that are reported to the authorities, are carried out in accordance with rules and with all legal provisions. KBC continuously invests in technological support for its teams and has regularly expanded these teams with specialized staff. The money laundering policy and the internal guidelines are regularly updated based on the changed legislation and regulations and also other changes and evolutions in that respect, so things that evolve very quickly. The compliance department reports at least quarterly to the group Executive Committee and to the group Risk and Compliance Committee. Every year, we also draw up an annual report on the fight against money laundering, and this is submitted to the group Executive Committee, the Board of Directors and the supervisor. The group Compliance Officer also has direct access to the Chairman of the Board of Directors and the Risk and Compliance Committee. Transfers to and from countries that are classified as high risk by the National Bank of Belgium are reported annually to the NBB. Switzerland is not included. However, we do not wish to give any further details on this. And then a number of questions are asked about the shareholder structure of the KBC Group and about the representation of the core shareholders on the Board of Directors and the specialized committees. First of all, we want to say that KBC Group NV is not a party to the shareholders' agreement entered into between the company's core shareholders. The annual report, and I refer to Pages 164 to 168, contains information about the purpose of this agreement, the main provisions and the composition of the shareholder syndicate consisting of KBC Ancora, its parent company, Cera, MRBB and a group of legal entities and natural persons. The shareholder agreement is not published on the website. It is an agreement between the core shareholders, to which, as stated above, KBC Group is not a party. The KBC Group has to comply with its legal obligations by the statements included in the annual report. The independent directors must comply with the legal criteria and the criteria set out in the Belgian Governance Code. As explained in the governance model in the annual report on Page 151, KBC places a strong emphasis on the selection of high-level independent directors at the level of KBC and at the level of the Board of Directors of KBC Bank and KBC Insurance. And I've invested a lot of energy in this myself personally in the past years. These individuals have a very good reputation, and they bring specific financial and managerial expertise and expertise and the diversity of backgrounds to the Board. As is the case for the Board of Directors, the group also takes into account the specificity of the shareholder structure and, in particular, the presence of the core shareholders. The Board considers it desirable in the light of their long-term commitment to involve them in an appropriate manner in the work of the committees. In response to the question regarding the participation of the core shareholders and the total number of shareholders present at KBC Group's annual meeting, the following indicative figures are provided: Annual General Meeting of the 4th of May 2017, 54.6%; on the 3rd of May 2018, 52.6%; on the 2nd of May 2019, 54.2%; and today, it's at 53.1%. I have now answered all of Mr. Prelovszky questions, at least the ones I could answer. And then we would like to continue with the agenda. We will now discuss the results of the votes. As explained, the shareholders were able to exercise their voting rights by using a voting form or by giving a proxy to the KBC Group. Pursuant to Article 23 of the Articles of Association, each share entitles its holder to 1 vote. Decisions are taken by a simple majority of the vote. In order to process the votes that were given in the voting forms and in the proxies, an electronic voting system will be used. The equipment and the procedures used were thoroughly tested under the supervision of the ICT audit team of corporate audit, which confirmed the correct operation and integrity of the voting system. KBC Group NV has entered the votes that were received in time in advance into the database of this voting system. KBC Group NV has also taken into account, obviously, the specific voting instructions that it received in the valid proxies of which the ultimate proxy holder is not KBC Group NV. Votes or abstentions expressed in these proxies are taken into account without the proxy holder being present at this annual meeting. KBC Group NV, as the sole proxy holder of the shareholders represented at the Annual General Meeting, explicitly confirms the votes of those shareholders that were registered in advance. The result of the votes will be recorded in the minutes of this meeting. The exact totals of all votes cast will be included in an appendix to these minutes, which form an integral part thereof. The first point of the agenda do not require a vote, the acknowledgment of the combined annual reports of the Board of Directors KBC Group, the acknowledgment of the statutory auditor's report on the corporate and consolidated financial statements of the KBC Group NV. In his report on the consolidated financial statements, the statutory auditor's opinion is that the consolidated financial statements give a true and fair view of the group's net worth and consolidated financial position as of the 31st of December 2019 and of its consolidated results and its consolidated cash flows for the year then ended in accordance with the International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. The statutory auditor has, therefore, issued an opinion without reservations. The statutory auditor's report on the company financial statements contains a similar opinion without reservations. And then we also had the acknowledgment of the consolidated financial statements of KBC Group NV. I shall then now proceed to the items of the agenda that do require a vote. The proposal is adopted if there are more votes in favor than against. The result of the voting instructions are shown on the screen for each proposal. In accordance with the voting instruction, the result of the votes is as follows. Proposal to approve the company financial statements of KBC Group NV for the financial year ended 31st of 2019, the proposal, as you can see, was adopted by 99.2% of the votes. The proposal relating to the allocation of the results of KBC Group NV for the financial year ended 31st of 2019, the first proposal was an allocation of EUR 10,289,215.22 as a categorized profit premium as stipulated in the collective bargaining agreement of the 9th of February 2018 with regard to the categorized profit premium for the financial year 2019, the proposal has been adopted with 100% of the vote. The second proposal then, an allocation of EUR 416,155,676 as a gross dividend. This means a gross dividend of EUR 1 per share. Following the payment of an interim dividend of the same amount, it is therefore proposed not to pay a final dividend. The proposal has been adopted with 99.95% of the vote. The proposal to approve the remuneration report of KBC Group for the financial year ended on 31st of December 2019 as included in the combined annual report of the Board of Directors of KBC mentioned in item #1 of this agenda, this proposal has been adopted with 89.37% of the votes. The proposal to discharge the directors of KBC Group NV from liability for the performance of their duties during the financial year 2019, this proposal has been adopted by 93.76% of the votes. The proposal to discharge the statutory auditor of KBC Group NV from liability in respect to the performance of his duties for the financial year 2019, accepted with 98.70% of the votes. And then at the request of the statutory auditor and after a favor opinion of the Audit Committee, a proposal to increase the statutory auditor's fee for the financial year 2019 to the amount of EUR 252,134, the proposal is adopted by 99.60% of the votes. Then the statutory appointments, a proposal to appoint Mr. Koenraad Debackere as an Independent Director for the remainder of his directorship, this means until after the general meeting of 2023, in line with and in accordance with the criteria set out in Article 7:87 of the Belgian Companies and Associations Code and the Belgian Corporate Governance Code 2020, the proposal has been adopted with 99.81% of the votes. The proposal to appoint Mr. Eric Clinck as a director for a period of 4 years, this means until after the Annual General Meeting of 2024, accepted by 75.52% of the votes. And the proposal to appoint Mrs. Liesbet Okkerse for a period of 3 years -- 4 years as a director, this means until the end of the annual meeting of 2024, accepted by 65.61%. The proposal to reappoint Mr. Theodoros Roussis as a director for a period of 4 years, this means until the end of the Annual General Meeting 2024, adopted with 66.81%. And the proposal to reappoint Sonja De Becker as a director for a period of 4 years, this means until after the Annual General Meeting of 2024, the proposal was adopted with 59.25% of the votes. And the proposal to reappoint Mr. Johan Thijs as a director for a period of 4 years, this means until after the General Meeting of 2024, adopted by 90.77% of the votes. Proposal to reappoint Mrs. Vladimira Papirnik as an independent director in line with and in compliance with the criteria set out in the Article 7:87 of the Companies Code and the Belgian Corporate Governance Code to a period -- for a period of 4 years, this means until the end of the Annual General Meeting of 2024, the proposal is adopted by 92.98% of the votes. The secretary will now review the minutes of this meeting. This will be signed by the members of the bureau and by KBC Group NV.

Good afternoon. The minutes, this is the special circumstances for the Annual General Meeting, taking into account this situation of the corona, the notifications made in the media, with the establishment that the meeting is convened regularly into documents that have to be signed: that the 315,000,756 (sic) [ 315,456,480 ] voters, this is 70% (sic) [ 75.76% ] of the capital; the agenda that Johan Thijs have explained; the results, the strategy and realization of the company, KBC Group, and the remuneration report, this is presented by a video; the oral answering of the questions of Mr. Barberien, Musschoot and Prelovszky; the adoption after the consolidated financial statements and results of the votes, so all proposals have been adopted in the report, the percentage of the majorities have been mentioned; and also, the absolute numbers are in the appendix; and then recognizing of the meeting.

Then the other thing that I have to do is to thank you for your trust that you have shown me as the President of KBC Group for the last 9 years. It was a great honor. And so I would like to thank KBC, its employees, its staff and my successor, Mr. Vlerick and Debackere. And I would wish them all the best for the future.