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Annual report

2Belfius Bank

Contents

3Annual report 2021 - Belfius Bank

Profile of Belfius

Management report

Consolidated financial statements

Non-consolidated financial statements

Global Reporting Initiative (GRI) - table

UN Global Compact Progress Index

UNEP FI Principles for Sustainable Insurance reporting UNEP FI Principles for Responsible Banking reporting

Abbreviations

Additional information

Profile

of Belfius

BELFIUS INSURANCE

CREFIUS

BELFIUS AUTO LEASE

BELFIUS LEASE

BELFIUS

LEASE SERVICES

(2)

BELFIUS

INVESTMENT PARTNERS

BELFIUS

COMMERCIAL FINANCE

BELFIUS BANK

FHIC

5Annual report 2021 - Belfius Bank

— Profile of Belfius

Belfius is a Belgian banking and insurance group wholly owned by the Belgian federal state through the Federal

Holding and Investment Company (FHIC). At the end of 2021, the total consolidated balance sheet amounted to

EUR 192 billion.

Simplified group structure

(1)

Our main commercial subsidiaries

Our activities

6 Our staff members

7Annual report 2021 - Belfius Bank

— Profile of Belfius

(In millions of EUR) Impairments on financial instruments and provisions for credit commitments(33)(66)(111)(453)1 Impairments on tangible and intangible assets9(2)(7)(17)(2)

Tax (expense) income(357)(217)(252)(147)(290)

Non-controlling interests01(1)01

of which

Bank435445461319716

Insurance

(1)

171205207212219

(In millions of EUR)

Consolidated balance sheet

(In millions of EUR) of which

Cash and balances with central banks25,43431,640

Loans and advances due from credit institutions11,91210,411

Loans and advances98,108102,679

Debt securities & equity instruments28,84927,195

Unit linked products insurance activities3,8134,246

Derivatives12,1888,909

of which

Cash and balances from central banks14,17415,418

Credit institutions borrowings and deposits5,0083,591

Borrowings and deposits95,338104,404

Debt securities issued and other financial liabilities24,40223,145 Unit linked products insurance activities3,8134,246

Derivatives18,31014,019

of which

Shareholders" core equity9,81510,560

Gains and losses not recognised in the statement of income393403 of which

Total shareholders" equity10,20910,963

Additional Tier-1 instruments included in equity497497

Non-controlling interests2833

8Annual report 2021 - Belfius Bank

— Profile of Belfius

Return on equity (ROE)7.0%7.5%7.4%5.6%9.2%

Return on assets (ROA)0.35%0.39%0.40%0.29%0.48%

Cost- income ratio (C/I ratio)58.1%60.4%58.4%56.0%54.6%

Asset quality ratio1.99%2.05%1.96%2.02%1.95%

Coverage ratio63.3%61.6%62.3%60.0%60.4%

Liquidity Coverage Ratio (LCR)

(2)

132%135%130%158%195%

Net Stable Funding Ratio (NSFR)116%116%116%128%136%

CET 1- ratio

(1)

15.9%16.0%15.9%17.1%16.4%

Tier 1- ratio

(1)

15.9%17.0%16.7%18.0%17.1%

Total capital ratio

(1)

18.1%19.6%19.2%20.4%19.8%

Leverage ratio5.5%6.0%6.0%6.9%7.1%

Solvency II - ratio (before dividend)230%219%212%212%200% Solvency II - ratio (after dividend)219%203%212%200%190%

Ratings of Belfius Bank as at 24 March 2022

Fitcha-A-StableF1

Moody"sbaa1A1StablePrime-1

Standard & Poor"sa-AStableA-1

(In billions of EUR)

Total volume in funds of the future 1.112.11

Total volume of investments managed based on the Portfolio21 criteria under management 13.512.3 % art 8 & 9 in outstanding active investments offer submitted to SFDR (except mandates)-79%

Staff membersMaleFemaleTotalMaleFemaleTotal

9Annual report 2021 - Belfius Bank

10Belfius Bank

11Annual report 2021 - Belfius Bank

Message from the chairmen

2021 highlights

Strategy Inspire 2025:

a purpose and values driven strategy towards 2025

Sustainability Report 2021

Human resources

Financial results

Segment reporting

Capital management

Risk management

Corporate governance

General information

12Annual report 2021 - Belfius Bank

With a figure of EUR 935 million, in 2021 Belfius achieved its best net result since it came into existence ten years

ago. It is a result that enables Belfius to evolve into a very solid and sustainable partner for the Belgian economy

and for society in Belgium. Belfius has now more than doubled its net result in the space of ten years and for the

first time is approaching the profit milestone of EUR 1 billion. In 2021, Belfius Bank saw its contribution to this

splendid net result more than double, to EUR 716 million. The share of Belfius Insurance in the profit also continued

to rise, reaching EUR 219 million. Once again, this high net profit for Belfius is the result of a strong growth in

revenue, strictly controlled operating overheads and historically low cost of risk.

Overall, Belfius saw its total income rise by 3.4% to a record of EUR 2,703 million. The bank"s net interest income

and net commission income both increased, while revenue from the insurance activities remained virtually stable.

Even with its ambitious growth strategy and associated investments in Belgian talent, innovation and digital, Belfius

has always kept costs under strict control over the years. In 2021, that resulted in the lowest Cost-Income ratio

since the creation of Belfius: 54.6% compared with 64.5% in 2012.

In 2021, Belfius saw the cost of risk very positively influenced by the favourable macro-economic recovery and

the effectiveness of the policy measures taken. This enabled Belfius to reduce the Covid-19 provisions set aside

in 2020 from EUR 331 million to EUR 216 million. As a result of the release of this part of these Covid-19 provisions,

the overall cost of risk evolved from EUR -453 million in 2020 to EUR 1.4 million in 2021. Since the beginning of

the pandemic, Belfius has helped a total of 34,606 customers to keep their head above water in this time of crisis.

Of the customers who requested a moratorium on their payments, 97.1% of Business and Corporate customers,

more than 99% of Individuals and even 100% of public and social sector customers have resumed making repay-

ments on their loans (i.e. for moratoriums that have not been extended).

13Annual report 2021 - Belfius Bank

Marc Raisière

14Annual report 2021 - Belfius Bank

In terms of solvency, the Belfius CET 1 ratio of 16.4% remains at a robust and very high level. Whereas in 2011 it was still under 8%, ten years later and even after the latest EBA stress test, Belfius is now able to claim to be one of the best-capitalised bank and insurance companies in Europe. Belfius" Solvency II ratio is 190%. With a strong increase in its LCR ratio of 195% and a similarly higher NSFR ratio of 136%, Belfius amply exceeds the mandatory liquidity requirements. At the end of 2021, the liquidity reserve stood at EUR 42 billion, with the Group"s equity capital also higher, at EUR 11 billion, meaning that Belfius has seen its capital base more than double in ten years. Based on these solid results, Belfius intends to proceed with a dividend payment of 40% of the profit for the whole financial year 2021. Subject to approval at the next Shareholders" Meeting, a dividend totalling EUR

368.5 million will be paid to the shareholder. This brings the cumulative

dividends passed on by Belfius to Belgian society since 2012 to almost

EUR 1.7 billion.

With an increase of 12% in new long-term financing, to EUR 22.3 billion, Belfius provided more support than ever to all segments of the Belgian society in 2021. In the space of ten years, Belfius has seen its production of long-term loans virtually double. Total outstanding loans rose by 5% in 2021 to EUR 102.2 billion, exceeding the EUR 100 billion mark for the first time in

Belfius" history.

In the segment for Individuals, a total of EUR 8.7 billion of long-term financing was granted in 2021, which was an increase of 17%. This rise related mainly to a 20% increase in the production of housing loans, totalling EUR 7.7 billion. This sustained commercial dynamic generated a market share of 16.5% for new mortgages, while consumer lending rose slightly to EUR 708 million.

Management report - Message from the chairmen

15Annual report 2021 - Belfius Bank

Belfius also made full use of its strength to support the financing capacity of Belgian companies, as well as the public and social sector. To provide assistance where it was needed in the aftermath of the Covid-19 crisis and as an additional stimulus to help with the return of growth plans. With a total of EUR 10.9 billion in new long-term loans for Entrepreneurs and Enterprises (“E&E"), Belfius did 10% better than in 2020 and continued to play its role as a driving force in the Belgian economy. In parallel with its growth figures for lending, Belfius also saw its market share in loans outstanding increase again, for both the Business and Corporate segment, to an estimated level of 17.4% and 18.5% respectively. Belfius also remained the undisputed go-to partner for the public and social sector. In 2021, EUR 2.6 billion in long-term loans were granted to customers in this segment. In addition to traditional credit financing, Belfius is increasingly opening up alternative financing solutions to customers from these sectors. In 2021, Belfius placed EUR 2.6 billion of new short-term and long-term issues in the market for Corporate customers. The bank also provided EUR 4.9 billion of alternative financing for its (semi-)public customers. And in 2021, Belfius was voted “Euronext Best Bond Finance House of the Year" for the 6th consecutive year. Customers were also able to continue relying on Belfius for the day-to-day management of their cashflow, payments and receipts. This is an area of expertise for which Belfius also won awards in 2021 from the authoritative magazine, Global Finance, as “Best Treasury & Cash Mana- gement Bank" and “Best Trade Finance Provider". As part of its ongoing efforts to keep improving its service to customers and enhance society, Belfius also helps customers to invest in that society. Total outstanding savings and investments across all segments rose to EUR 179.5 billion, including an unprecedented 10% increase among Individuals to EUR 118.4 billion. After an exceptionally strong increase in savings and

Management report - Message from the chairmen

16Annual report 2021 - Belfius Bank

Management report — Message from the chairmen

investments among Individuals in 2020, organic growth of savings and investments for these customers

accounted for a further rise in 2021, reaching EUR 5.7 billion by the end of the year. This growth indicates the

sustained confidence of our customers and the successful transformation of Belfius into a bank for investors.

There was also strong growth in the segments for Private & Wealth Management, reflected by a 14% increase in

customer numbers to a total in excess of 145,000. Outstanding savings and investments in these segments

amounted to EUR 53.4 billion, representing a significant increase of 20% compared with the end of 2020 and an

increase in outstanding funds in circulation in the Wealth segment of 64%.

In 2021, the insurance business was put to the test even more than usual by the unprecedented floods of July

2021. Even under these extreme circumstances, Belfius more than ever proved itself to be a caring insurer. A great

many additional resources were deployed to assist affected customers in the best possible way and to provide

compensation for the damage suffered as quickly as possible. The financial impact for Belfius Insurance was

considerable, at EUR 181 million. However, thanks to the part born by the regional authorities and the sound

reinsurance policies taken out by Belfius Insurance over a number of years as part of its forward-looking risk

management policy, the impact on results was restricted to approximately EUR 24 million.

But these exceptional events did not prevent Belfius Insurance from achieving strong results in both Life and

Non-Life. Group Non-Life premium receipts were EUR 769 million (+4%). This increase was particularly the case

for Belfius Bank (+11%), which saw a rise for the sixth successive year, clearly demonstrating the strength of the

Belfius banking and insurance model. Life production exceeded the EUR 2 billion mark, up a strong 12% compared

with 2020.

2021 was also a year in which multiple milestones were passed in Belfius" evolution towards taking an innovative

and diversified approach to retail banking. After a 5-month trial, in October, Belfius launched the Beats digital flow

in the Belfius Mobile app. This launch was the next step in the strategic partnership between Belfius and Proximus.

October 2021 also saw the introduction of Banx, the fully digital and sustainable slow banking experience developed

in conjunction with Belfius. Digital acceleration also picked up speed in 2021. In total, 63% of the Individuals and

E&E customers became digitally active. At the end of 2021, the total number of users of the Belfius apps for

smartphones and tablets had risen to more than 1.79 million - up by 13% compared with 2020. Belfius also

continued to play the digital card in insurance. After the success of the “app-normal" home and family insurance

in 2020, Belfius added the new “app-normal" tenant insurance cover option in 2021 to its range of Non-Life

insurance products available in the Belfius app.

17Annual report 2021 - Belfius Bank

Chris Sunt

18 The climate and our planet need a different way of doing business. Belfius aims to be a pioneer in this transition by inspiring customers and by firmly embedding sustainability as part of our financing and investment offering. For example, in 2021, Belfius took on a senior role in the issue of ten green, social or sustainable bonds, scoring a bull"s eye with the successful initial launch of its own “Green Senior Bond". Belfius also demonstrated its financing capabilities in the public and social sector in 2021 with its involvement in sustainable infrastructure projects worth EUR 1.7 billion, approximately EUR 300 million of which was financed by Belfius. And Belfius helped local authorities in the sustainable renovation of their buildings with the Smart Building & Renovation Solution product, providing funding of EUR 140 million. With the launch of “meaningful investing", Belfius also gives customers the opportunity to make meaningful investments in a better and more sustainable world. Some of the stand-out products here are the Belfius Future Funds, with new subscriptions to these funds climbing by 28% in 2021 to EUR

934 million. This means they now represent more than 20% of total subscriptions

to investment funds. Since mid-2021, customers have also been able to make meaningful investments on the new Re=Bel stock market platform. Re=Bel informs customers about the sustainable nature of their transactions. By the end of 2021, there were already 40,000 customers on the platform, conducting a little over 100,000 transactions totalling EUR 348 million. Just how attractive the platform has proved can be seen from the fact that 73% of share transactions conducted met the sustainability criteria set by Belfius. Belfius Bank is also setting a good example in the transition to a more sustainable economy. For instance, Belfius is firmly committed to making its fleet of vehicles greener, with electric or plug-in hybrid cars now accounting for over 60% of new orders of ‘flex" and company cars within the Belfius Group. Also, Belfius is and remains carbon-neutral for its own activities. In addition, the Belfius policy on diversity continues to bear fruit and the balance between men and women at all levels of the organisation is gradually improving. The proportion of women compared to men in managerial roles rose from

33.7% in 2020 to 36.7% in 2021, taking us another step closer to our target

of 44% by 2025.

19Annual report 2021 - Belfius Bank

Management report — Message from the chairmen

For ten years now, Belfius has been living up its commitment to be a meaningful and inspiring bank-insurer for the

Belgian society. This is no coincidence and is the result of a successful blend of a sustainable business model and

the correct long-term strategy. It is a strategy based on providing unconditional support for the Belgian economy,

focusing on innovation and Belgian talent and always putting the customer first in every situation. Our excellent

results allow us to look to the future with ambition and commitment. To a sustainable future in which we will

continue to invest in Belgian society and the economy, with strong profitability, a prudent risk policy and powerful

capital reserves.

In the year in which Belfius looks back with pride on ten years of hard work, we would like to thank our customers

for their trust in us - a trust that inspires us every day to give the best of ourselves. We are also grateful to our

shareholder and to the members of our Board of Directors for their confidence and support in developing our

ambitious strategy. Finally, we extend our sincere gratitude to our thousands of staff members and to our indepen-

dent agents and their employees for their ongoing efforts and commitment. And for the Love of our customers,

which has already been the case for 10 years or more - and will continue to be so in the future.

Brussels, 24 March 2022

Chairman of the Management Board

Chairman of the Board of Directors

Belfius Bank Belfius Bank

2021
highlights

Management report - 2021 highlights

21Annual report 2021 - Belfius Bank

Sustained commercial activity in all

segments in 2021

Management report - 2021 highlights

22Annual report 2021 - Belfius Bank

Excellent financial performance in

2021

Management report - 2021 highlights

23Annual report 2021 - Belfius Bank

All in all, the combination of strong income dynamics, favourable financial markets and the lower-for-longer interest rate environment, together with contained operating expenses, notwithstanding continuing investments in commercial activities, ESG, IT and digitalization, led to an increase of 7% in

Continued investment in the future,

with a focus on sustainability

Management report - 2021 highlights

24Annual report 2021 - Belfius Bank

Perhaps for the first time in history, Belgium experienced a close encounter with climate change. Severe floods occurred back in July 2021, mainly in Wallonia and

Limburg

Banx Beats

Green bond

CET 1 ratio

pay-out ratio total capital ratio leverage ratio

Solvency II ratio

LCR of 195%

total shareholders' equity

25Annual report 2021 - Belfius Bank

Strategy Inspire 2025:

a purpose and values driven strategy towards 2025

“Belfius" integrated

business model will continue its expansion into Asset Management and Financial Markets."

27Annual report 2021 - Belfius Bank

As such, today, Belfius is a digital leading integrated bank-insurer, present in all segments of the Belgian economy, committed to customer satisfaction and the creation of societal value, with strong commercial and financial results.

As of December 2021, it is the

second largest integrated Belgian bank-insurer, serving 3.7 million customers, with an overall satisfaction of 95% and a recognized digital leader with the 2nd best banking app worldwide, ahead of many fintechs and neobanks. Belfius' is growing its franchise in Private & Wealth; developing its position as Bank for Investors with a 11.4% growth in clients and 15.3% growth in savings and investments products within this segment in 2021. Also our Business and Corporate Banking is continuously expanding its market position, reaching a market share of >17% and serving over 0.36 million Entrepreneurs and Enterprises as at the end of December 2021. In the Public sector it remains the reference bank in Belgium, with almost 100% penetration.

Belfius is also

one of the most solid banks in Europe, ranking in the top-10 of most resilient banks in 2021 EBA stress tests. As a result of this, at the end of 2020, the time was right for Belfius to define an inspiring new ambition for the future: Belfius' Inspire 2025 strategy. This strategy is built on a clear and inspiring purpose that is our guide in all important choices and decisions we make: Belfius, meaningful and inspiring for Belgian society. Together. Under this Inspire 2025 strategy, Belfius remains a universal, integrated bank-insurer that generates a positive contribution to all segments of the Belgian economy and Society thanks to its robust “risk management" and strong “financial management". Belfius' integrated business model, based on creating and leveraging synergies across its client segments, as well as its products and businesses, will continue its expansion into Asset Management and Financial Markets.

Belfius continues to put

the customer at the heart of everything. For each customer segment, we go the last mile in terms of customer satisfaction. To underline this further, also within our financial reports, we are adjusting our Belfius' segmentation, in order to “start from the customer". As such, our segmentation for our financial and commercial results will be reported centered around two new “commercial segments": the individual customers (“Individuals", abbreviation IND) and the business, corporate and institutional customers (“Entrepreneurs, Enterprises and Public", abbreviation E&E&P). Individuals and Entrepreneurs, Enterprises and Public will be the two main cornerstones that replace the previous Retail and Commercial segment (RC) and Public and Corporate segment (PC). The Group Center, containing the residual results not allocated to the two commercial segments will remain as is. This consists mainly of results from Bond and Derivative portfolio management.

“We put the customer at

the heart of everything."

“Belfius is committed

to the deployment of its strategy ‘Bank

For Investors 2025"."

28Annual report 2021 - Belfius Bank

In the Individuals segment, our segmentation has always been based on the customer's financial footprint, both in terms of loans and assets. These days, we understand that the customer's behaviour and aspirations are equally important. In practical terms, this means that the previous Retail and Privilege customers will be subdivided into Savers and Investors, not based on their assets, but on their behaviour.

Savers are individuals

who do little or no investing and who mainly seek a safe haven in their savings booklet. An Investor, on the other hand, is someone who mainly invests, who has a certain amount of knowledge about investing and who has a minimum of EUR 7,500 of investments with Belfius. The Savers and Investors segment remains fundamental for Belfius, in which we focus on an innovative mix of digital and human, through own channels and via strategic partnerships, and a continued support to the most vulnerable in society (e.g. via social accounts, accessible services for elderly/less digital people, etc.). For our top segments, we have chosen a member ship approach where clients consciously choose to opt in. The Private Membership is a paying membership while the Wealth membership is upon invitation only. Belfius will continue to develop a stronger position for the

Private & Wealth segment,

inter alia by its strong position in meaningful investing with a tangible impact on society. Within the new Entrepreneurs, Enterprises and Public segment, we have indicated three sub-segments, starting with Business. The Business segment brings together the self-employed, the liberal professions (inter alia lawyers, doctors, accountants, etc.) and SMEs with a turnover up to EUR

10 million. This segment is mainly served by our branch network.

The Corporate Banking segment brings together medium and large Belgian companies with a turnover of more than EUR 10 million. This segment is served by our network of corporate bankers. Within the Corporate Banking segment, a new subsegment “Local Corporates" is created, that serves all clients that balance on the border between the Business and Corporate Banking, with a turnover between EUR 10 and 25 million. This segment is served by both our branch network and our corporate network. A special feature of this segment is that is characterized by the merge of the Wealth Management and Corporate Banking sales force into one single team, with Wealth leads provided by

Corporate Bankers and vice versa.

Last but not least, the E&E&P segment consists of the

Public and Social Banking which

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