Interim Financial Statements for the first half-year of 2010

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(1)Consolidated Interim Financial Statements. Your partner in Insurance Brussels | Utrecht. 25 August 2010. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. for the first half-year of 2010.

(2) WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5.

(3) Content Report of the Board of Directors of Ageas..........................................................................................................5 Report of the Board of Directors of Ageas .......................................................................................................................... 6. Consolidated Interim Financial Statements for the first half-year of 2010..........................................................9 Consolidated statement of financial position ..................................................................................................................... 10 Consolidated income statement ........................................................................................................................................ 11 Consolidated statement of comprehensive income........................................................................................................... 12 Consolidated statement of changes in equity.................................................................................................................... 13 Consolidated cash flow statement..................................................................................................................................... 14. General Notes...................................................................................................................................................15 1. 2. Summary accounting policies and principles of consolidation ............................................................................... 16 1.1. Basis of accounting ............................................................................................................................... 16. 1.2. Changes in accounting policies............................................................................................................. 16. 1.3. Accounting estimates ............................................................................................................................ 18. 1.4. Segment reporting ................................................................................................................................ 19. 1.5. Scope of consolidation .......................................................................................................................... 20. Acquisitions and disposals ..................................................................................................................................... 21 2.1. Disposals in 2010.................................................................................................................................. 21. 2.2. Acquisitions in 2009 .............................................................................................................................. 21. 2.3. Disposals in 2009.................................................................................................................................. 21. 3. Outstanding shares and earnings per share .......................................................................................................... 22. 4. Supervision and solvency ...................................................................................................................................... 24 4.1. Ageas consolidated............................................................................................................................... 24. 4.2. Insurance .............................................................................................................................................. 24. 4.3. General Account ................................................................................................................................... 24. 4.4. Ageas core equity target and total capital ............................................................................................. 24. 5. Cash and cash equivalents .................................................................................................................................... 28. 6. Investments ........................................................................................................................................................... 29. 7. 6.1. Investments available for sale............................................................................................................... 29. 6.2. Net unrealised gains and losses on Available for sale investments included in equity ......................... 31. 6.3. Investments held at fair value through profit or loss .............................................................................. 31. 6.4. Real estate............................................................................................................................................ 32. Loans ..................................................................................................................................................................... 33 7.1. Loans to banks...................................................................................................................................... 33. 7.2. Loans to customers............................................................................................................................... 33. 8. Royal Park Investments ......................................................................................................................................... 34. 9. Reinsurance and other receivables........................................................................................................................ 35. 10. Call option BNP Paribas shares............................................................................................................................. 36. 11. Liabilities arising from Life insurance contracts...................................................................................................... 38. 12. Liabilities arising from Life investment contracts .................................................................................................... 38. 13. Liabilities related to Unit-linked contracts ............................................................................................................... 38. 14. Liabilities arising from Non-life insurance contracts ............................................................................................... 39. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 3. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Explanatory notes to the Consolidated statement of financial position ............................................................27.

(4) 15. Debt certificates ..................................................................................................................................................... 39. 16. Subordinated liabilities ........................................................................................................................................... 40. 17. Borrowings ............................................................................................................................................................. 42 17.1. Due to banks......................................................................................................................................... 42. 17.2. Due to customers .................................................................................................................................. 42. 18. Deferred tax assets and liabilities .......................................................................................................................... 43. 19. RPN(I).................................................................................................................................................................... 44. Explanatory notes to the Consolidated income statement ...............................................................................47 20. Insurance premiums .............................................................................................................................................. 48. 21. Interest, dividend and other investment income..................................................................................................... 50. 22. Realised and unrealised gains and losses............................................................................................................. 50. 23. Insurance claims and benefits................................................................................................................................ 51. 24. Finance costs......................................................................................................................................................... 52. 25. Change in impairments .......................................................................................................................................... 52. Explanatory note on segment reporting............................................................................................................53. 27. 28. Information on segments ....................................................................................................................................... 54 26.1. General information............................................................................................................................... 54. 26.2. Belgium ................................................................................................................................................. 55. 26.3. United Kingdom (UK) ............................................................................................................................ 55. 26.4. Continental Europe ............................................................................................................................... 55. 26.5. Asia ....................................................................................................................................................... 55. 26.6. General Account ................................................................................................................................... 56. 26.7. Statement of financial position by operational segment ........................................................................ 56. 26.8. Income statement by operational segment ........................................................................................... 58. 26.9. Statement of financial position by product............................................................................................. 60. 26.10. Income statement by product................................................................................................................ 62. 26.11. Technical result insurance .................................................................................................................... 64. 26.12. Other segment information on Non-life insurance................................................................................. 67. Contingent liabilities ............................................................................................................................................... 68 27.1. Contingent liabilities relating to legal proceedings ................................................................................ 68. 27.2. Contingent liabilities for hybrid instruments of former subsidiaries........................................................ 71. Events after the date of the statement of financial position.................................................................................... 74. Statement of the Board of Directors .................................................................................................................................. 75 Review report .................................................................................................................................................................... 76. All amounts in the tables of these Financial Statements are denominated in millions of euros, unless stated otherwise.. 4 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. 26.

(5) CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 5. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Report of the Board of Directors of Ageas.

(6) Report of the Board of Directors of Ageas General On 28 and 29 April 2010 the respective General meetings of shareholders of Fortis SA/NV and Fortis N.V. approved the proposal submitted by the Board of Directors to change the company’s name from “Fortis” into “Ageas”. As of 30 April 2010, the company adopted the new name and as a consequence our listing and all formal communication are under the name “Ageas”. Ageas SA/NV and ageas N.V. are the two parent companies of Ageas which is now focused exclusively on the insurance activity and owns a number of subsidiary companies located in the following 4 business areas: Belgium, UK, Continental Europe and Asia.. Developments As of the first quarter Ageas reports its results in line with the new reporting and management structure organized along four distinct insurance business lines: Belgium, United Kingdom, Continental Europe and Asia. This should further enhance transparency and offer a better understanding of the business dynamics of the various activities. Ageas published pro forma accounts over 2009 in line with the new reporting structure including the changes in the local accounting principles applied to our partnership in China on 22 June 2010. Ageas decided to liquidate Brussels Liquidation Holding (formerly Fortis Brussels). Ageas former structure was designed to incorporate the banking activities (held through Fortis Brussels) and insurance activities (held through Fortis Utrecht). Following the sale of the banking activities, insurance has become our core business. The decision to liquidate Fortis Brussels as a sub-holding reflects this new structure. All the assets and liabilities from Brussels Liquidation Holding have been passed on to ageas SA/NV through a transfer of universality. The positive net tax impact related to the planned liquidation of Fortis Brussels, led to a positive second quarter’ net result in the General Account. Together with the announced divestment of our Turkish insurance operations, these. At the same time we continue to grow our business, both organically and through selective acquisitions, as evidenced by the recent acquisition of Kwik-Fit’s insurance business in our core UK market.. Results Ageas maintained its strong commercial performance in the 2nd quarter. Inflow levels were up more than 20% in the first six months. Ageas’ insurance net profit after minorities over the first six months of 2010 amounted to EUR 180 million broken down by EUR 88 million in Belgium, EUR 8 million in the UK, EUR 17 million in Continental Europe and EUR 67 million in Asia. This compares to a net profit of EUR 260 million over the first six months of 2009, including a positive result of EUR 32 million related to the restatement of the 2009 half year results for the new business segmentation and the implementation of the new Chinese Accounting Standards for the Chinese Associate. The net Life profit amounted to EUR 178 million while the Non-Life activities reported a net loss of EUR 6 million and other insurance realised a net profit of EUR 8 million.. 6 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. initiatives illustrate our deliberate and ongoing efforts to simplify and streamline our Group structure..

(7) In summary, our results demonstrate that we continue to manage our businesses vigilantly and proactively while being alert to opportunities to strengthen our group and boost our future profit capabilities.”. Dividend The General Meeting of Shareholders has approved the adoption of a gross dividend of 8 eurocent per share. This equals an expected payout ratio of 41% of the 2009 insurance profits, in line with the announced dividend policy end of September 2009. The dividend was payable as from 1 June 2010.. Ageas Board of Directors and Executive Committee At the General Meetings of Shareholders of 28 and 29 April 2010, the nomination was approved of Bart De Smet as executive director and Bridget McIntyre and Belén Romana as non executive directors until the end of the Ordinary General Meetings of Shareholders in 2013.. Outlook Evolution inflow Ageas maintained its strong commercial performance in the 2nd quarter with inflow levels up more than 20% in the first six months. Based on this result and taking into account the uncertain economic outlook, we remain confident and reconfirm our expectations that 2010 group inflows should exceed 2009 levels. Risks and uncertainties for the remaining months of the year As an insurer, risks, uncertainties and the timing of their possible realisation are embedded in our business. Within these we highlight the following:. Although our exposure to high risk sovereigns has been significantly reduced, we continue to monitor this risk closely. Yield Yield curves remain low despite expectations of increased inflation due to massive injections of money supply by the governments. A double dip recession and deflation even remains a potential scenario. While low interest rates present challenges to ongoing margins, higher interest rates can have negative impact on balance sheets, regulatory solvency and potentially the income statement.. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 7. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Sovereign debt.

(8) Contingent liabilities Without prejudice to any specific comments made in note 27 hereafter, given the various stages and continuously evolving nature as well as inherent uncertainties and complexity of the current proceedings and investigations, management is not in a position to determine whether any claims or actions brought against Ageas in connection with these proceedings and investigations are without merit or can be successfully defended or whether the outcome of these actions or claims may or may not result in a significant loss in the Ageas Consolidated Interim Financial Statements. Brussels/Utrecht, 24 August 2010.. 8 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Board of Directors.

(9) CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 9. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Consolidated Interim Financial Statements for the first half-year of 2010.

(10) Consolidated statement of financial position Note. 30 June. 31 December. 2010. 20091). Assets Cash and cash equivalents. 5. 4,588.0. 5,635.7. Financial investments. 6. 55,224.8. 53,070.1. Investment property Loans. 7. Investments related to unit-linked contracts Investments in associates Reinsurance and other receivables. 9. Current tax assets. 1,576.2. 1,652.7. 4,654.5. 4,132.3. 21,086.4. 20,694.8. 1,648.8. 1,403.6. 1,616.1. 1,263.7. 123.9. 102.8. Deferred tax assets. 18. 584.0. 53.0. Call option BNP Paribas shares. 10. 759.0. 880.0. Accrued interest and other assets. 1,997.4. 1,847.6. Property, plant and equipment. 1,081.4. 1,108.1. Goodwill and other intangible assets. 1,544.2. 1,376.4. Assets held for sale Total assets. 218.8. 103.2. 96,703.5. 93,324.0. Liabilities arising from life insurance contracts. 11. 23,662.5. 22,930.8. Liabilities arising from life investment contracts. 12. 25,925.1. 24,332.7. Liabilities related to unit-linked contracts. 13. 21,160.7. 20,772.8. Liabilities arising from non-life insurance contracts. 14. 5,262.5. 4,934.0. Debt certificates. 15. 896.0. 915.0. Subordinated liabilities. 16. 2,940.6. 2,850.3. Borrowings. 17. 1,995.3. 2,773.8. Current tax liabilities Deferred tax liabilities. 18. RPN(I). 19. Accrued interest and other liabilities Provisions Liabilities related to assets held for sale Total liabilities Shareholders' equity Non-controlling interests. 3. 84.1. 106.2. 1,248.0. 1,024.5. 340.0. 316.0. 2,112.5. 2,209.4. 28.8. 34.2. 211.8. 39.3. 85,867.9. 83,239.0. 9,153.1. 8,431.0. 1,682.5. 1,654.0. Total equity. 10,835.6. 10,085.0. Total liabilities and equity. 96,703.5. 93,324.0. 1). Adjusted for comparison reasons see note 1.2. 10 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Liabilities.

(11) Consolidated income statement Note. First. First. half-year 2010. half-year 2009 2). Income - Gross premium income 1). 5,113.9. - Change in unearned premiums. ( 144.3 ). - Ceded earned premiums. ( 122.9 ). 4,731.9 ( 97.3 ) ( 99.2 ). Net earned premiums. 20. 4,846.7. 4,535.4. Interest, dividend and other investment income. 21. 1,512.6. 1,649.2. Unrealised gain (loss) on Call option BNP Paribas shares Unrealised gain (loss) on RPN(I) Realised and unrealised gains and losses. 22. Investment income related to unit-linked contracts. ( 121.0 ). 730.0. ( 24.0 ). ( 344.0 ). ( 51.6 ). 865.0. 202.2. 712.0. Share of result of associates. 48.3. 22.2. Fee and commission income. 205.4. 176.8. Other income. 96.8. 94.4. Total income. 6,715.4. 8,441.0. Expenses ( 5,022.6 ). - Insurance claims and benefits, ceded Insurance claims and benefits, net. ( 4,696.3 ). 55.0 23. Charges related to unit-linked contracts. 39.5 ( 4,967.6 ). ( 4,656.8 ). ( 171.8 ). ( 705.2 ). Finance costs. 24. ( 143.6 ). ( 338.6 ). Change in impairments. 25. ( 24.0 ). ( 452.5 ). Change in provisions. 2.5. 13.1. Fee and commission expense. ( 522.9 ). ( 462.4 ). Staff expenses. ( 334.9 ). ( 320.9 ). Other expenses. ( 393.8 ). ( 426.0 ). Total expenses. ( 6,556.1 ). ( 7,349.3 ). Profit before taxation. 159.3. 1,091.7. Income tax expenses. 345.5. ( 161.2 ). Net profit for the period. 504.8. 930.5. Attributable to non-controlling interests Net profit attributable to shareholders. 49.8. 34.7. 455.0. 895.8. Per share data (EUR) Basic earnings per share. 0.18. 0.36. Diluted earnings per share. 0.18. 0.36. 1). Gross inflow (sum of gross written premiums and premium inflow of investment contracts without Discretionary Participation Features) can be calculated as follows.. 2). Adjusted for comparison reasons see note 1.2. First. First. half-year 2010. half-year 2009. Gross premium income. 5,113.9. 4,731.9. Inflow deposit accounting. 1,298.0. 1,188.7. Gross inflow. 6,411.9. 5,920.6. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 11. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. - Insurance claims and benefits, gross.

(12) Consolidated statement of comprehensive income. Net profit attributable to shareholders. First. First. half-year 2010. half-year 2009. 455.0. 895.8. Other comprehensive income Change in revaluation of investments available for sale, gross. 126.9. 111.0. Related tax. ( 67.1 ). ( 51.9 ). Change in revaluation of investments available for sale, net Change in foreign exchange differences, gross Related tax. 59.8 287.5. Share of other comprehensive income of associates, gross. 45.7. ( 0.9 ). Change in foreign exchange differences, net. ( 1.5 ) 286.6. 85.1. 44.2 ( 3.9 ). Related tax Share of other comprehensive income of associates, net. 59.1. ( 1.1 ) 85.1. Other changes. ( 5.0 ) ( 62.4 ). Other comprehensive income for the period, net of tax. 431.5. - Attributable to non-controlling interests. ( 26.8 ). 35.9 36.2. - Attributable to shareholders. 458.3. ( 0.3 ). Total comprehensive income for the period, attributable. 12 | first half-year 2010. 913.3. 895.5. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. to shareholders.

(13) Consolidated statement of changes in equity Share. Balance at 1 January 2009. Currency. Net profit. Unrealised. Share. Share. Premium. Other. Translation. attributable to. gains. holders'. Minority. Total. Capital. reserve. reserves. Reserve. Shareholders. and losses. Equity. Interests. equity. ( 818.6 ). ( 68.4 ). ( 28,021.5 ). 11,838.2. 23,508.4. Net profit for the period. 422.5. 895.8. Revaluation of investments. 6,860.6. 515.4. 7,376.0. 895.8. 34.7. 930.5. 17.9. 17.9. 36.2. 54.1. ( 62.4 ). ( 62.4 ). Reclassed to income statement due to sale of group companies Foreign exchange differences. 44.2. Total non-owner changes in equity. 44.2 ( 28,021.5 ). 895.8. ( 44.5 ). 895.5. ( 1.6 ) ( 9,724.2 ). ( 9,230.0 ). 966.4. 28,021.5. Dividend Reorganisation of capital. 44.2 70.9. ( 1.6 ). 18,954.2. Treasury shares. 0.2. 0.2. Other changes in equity. 3.6. 3.6. 738.9. 742.5. 0.2. Balance at 30 June 2009. 2,114.0. 14,278.4. ( 9,882.1 ). ( 24.2 ). 895.8. 378.0. 7,759.9. 1,323.6. 9,083.5. Balance at 1 January 2010. 2,114.0. 14,278.4. ( 9,871.0 ). ( 71.1 ). 1,209.8. 770.9. 8,431.0. 1,654.0. 10,085.0. 455.0. 49.8. 504.8. 171.7. ( 26.8 ). 144.9. Net profit for the period. 455.0. Revaluation of investments. 171.7. Foreign exchange differences. 286.6. Total non-owner changes in equity. 286.6. Transfer. 1,209.8. Dividend. ( 188.1 ). Treasury shares Other changes in equity Balance at 30 June 2010. 2,114.0. 14,278.4. 455.0. 171.7. 286.6. 913.3. 23.0. 936.3. ( 188.1 ). ( 0.4 ). ( 188.5 ). ( 1,209.8 ). 0.3. 0.3. ( 3.4 ). ( 3.4 ). ( 8,852.4 ). CONSOLIDATED INTERIM FINANCIAL STATEMENTS. 286.6. 215.5. 455.0. 942.6. 9,153.1. 0.3 5.9. 2.5. 1,682.5. 10,835.6. first half-year 2010 | 13. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Transfer. ( 62.4 ). 44.2.

(14) Consolidated cash flow statement First half-year 2010 Profit before taxation. First half-year 2009. 159.3. 1,091.7. 121.0. ( 730.0 ). Adjustments to non-cash items included in profit before taxation: Call option BNP Paribas shares RPN(I). 24.0. 344.0. (Un)realised gains (losses). 109.3. ( 867.1 ). Share of profits in associates. ( 48.3 ). ( 22.2 ). Depreciation, amortisation and accretion. 268.8. 211.0. Impairments. 24.0. 452.5. Provisions. ( 2.5 ). ( 13.1 ). Share-based compensation expense. 2.7. 4.5. Changes in operating assets and liabilities: 33.7. 102.7. Loans. ( 513.8 ). 11,902.5. Reinsurance and other receivables. ( 731.4 ). Investments related to unit-linked contracts. ( 508.6 ). ( 400.7 ). Borrowings. ( 794.4 ). ( 6,628.2 ). Liabilities arising from insurance and investment contracts. 2,374.7. ( 356.4 ). 2,010.0. Liabilities related to unit-linked contracts. 487.6. 428.3. Net changes in all other operational assets and liabilities. 180.4. ( 507.3 ). Dividend received from associates Income tax paid Cash flow from operating activities Purchases of financial investments Proceeds from sales and redemptions of financial investments. 4.6 ( 81.3 ) 1,109.8. ( 7,188.4 ). 14,006.2. 3,678.7. ( 53.3 ). Proceeds from sales of investment property. 139.3. Purchases of property, plant and equipment. ( 19.1 ). Acquisition of subsidiaries and associates. 6,988.1. ( 15,992.3 ). Purchases of investment property. Proceeds from sales of property, plant and equipment. 2.5 ( 36.6 ). 39.5 ( 129.4 ). ( 74.8 ) 0.3 ( 24.0 ) 0.7 ( 825.6 ). Divestments of subsidiaries and associates. 58.0. Purchases of intangible assets. ( 5.0 ). ( 8.0 ). ( 1,956.1 ). ( 3,066.1 ). ( 26.5 ). ( 3,701.9 ). Cash flow from investing activities Payment of debt certificates Payment of subordinated liabilities Proceeds from the issuance of other borrowings Payment of other borrowings Proceeds from sales of treasury shares Dividends paid to shareholders of the parent company Dividends paid to non-controlling interests Cash flow from financing activities Effect of exchange rate differences on cash and cash equivalents Net increase (decrease) of cash and cash equivalents. 1,375.0. ( 40.8 ) 14.6. 15.7. ( 29.1 ). ( 17.3 ). 0.3 ( 193.3 ). 0.2 ( 5.6 ). ( 0.4 ). ( 1.6 ). ( 234.4 ). ( 3,751.3 ). 33.0 ( 1,047.7 ). 14.9 185.6. Cash and cash equivalents as at 1 January. 5,635.7. 5,932.7. Cash and cash equivalents as at 30 June. 4,588.0. 6,118.3. 1,207.3. 1,452.7. Supplementary disclosure of operating cash flow information Interest received Dividend received from financial investments Interest paid. 14 | first half-year 2010. 30.7 ( 244.4 ). 27.1 ( 497.5 ). CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Derivatives held for trading (assets and liabilities).

(15) CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 15. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. General Notes.

(16) 1. Summary accounting policies and principles of consolidation. 1.1. Basis of accounting. The Ageas Consolidated Interim Financial Statements for the first half-year of 2010, including the 2009 comparative figures, has been prepared in accordance with IAS 34, Interim Financial Reporting, and includes condensed financial statements (statement of financial position, income statement, statement of changes in equity, cash flow statement), consolidated statement of comprehensive income and selected explanatory notes. Ageas applies International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’). The Ageas Consolidated Interim Financial Statements for the first half-year of 2010 should be read in conjunction with the audited Fortis Consolidated Financial Statements 2009 (including the accounting policies) which are available at: http://www.ageas.com/nl/Pages/index_en.aspx. 1.2. Changes in accounting policies. The accounting policies used to prepare the Consolidated Interim Financial Statements for the first half-year of 2010 are consistent with those applied in the Fortis Consolidated Financial Statements for the year ended 31 December 2009. A more extensive description of the accounting policies, including the policies that are applicable as from 1 January 2009, is included in the Fortis Consolidated Financial Statements 2009. On 12 May, Ageas announced its intention to publish 2009 pro forma financial information reflecting the Group’s new reporting structure. This updated information also includes a positive impact of EUR 18 million on the 2009 net result related to changes in local accounting principles applied to our partnership in China. The adjusted group net result for 2009 including the impact of the change in accounting principles amounts to EUR 1,210 million compared to EUR 1,192 million previously. Accordingly, this document includes these pro forma figures.. 1.. IAS 27 Consolidated and Separate Financial Statements. 2.. IFRS 3 Business Combinations. 3.. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. 4.. IFRIC 15 Agreements for the Construction of Real Estate. 1. IAS 27 Consolidated and Separate Financial Statements The IASB amended a revised IAS 27 (in a package with amendments to IFRS 3 Business Combinations) to reflect changes to the accounting for non-controlling interest (previously minority interest), which Ageas applied in all transactions from January 1, 2010. The amendments deal primarily with the accounting for changes in ownership interests in subsidiaries after control is obtained, the accounting for the loss of control of subsidiaries and the allocation of profit or loss to controlling and non-controlling interests in a subsidiary.. 16 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. From 1 January 2010 on the standards mentioned below are mandatory and relevant for Ageas:.

(17) 2. IFRS 3 (revised) Business Combinations The IASB issued a revised version of the business combinations standard with some significant changes, which Ageas applied in all acquisitions starting from January 1, 2010. The definition of a business combination has been revised to focus on control. All items of consideration transferred by the acquirer are measured and recognised at fair value at the acquisition date, including contingent consideration. Transaction costs incurred by the acquirer in connection with the business combination (finder’s fees, advisory, other consulting fees) do not form part of the business combination and will be expensed. 3. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations The amendments specify that if an entity is committed to a plan to sell a subsidiary (involving the loss of control), then it would classify all of that subsidiary’s assets and liabilities as held for sale when the held for sale criteria in paragraphs 6 to 8 of IFRS 5 are met; this applies regardless of the entity retains an interest (other than control) in the subsidiary. 4. IFRIC 15 Agreements for the Construction of Real Estate This interpretation provides guidance on the accounting for revenue arising from agreements for the construction of real estate. The interpretation addresses the applicable accounting standard (IAS 11 Construction Contracts or IAS 18 Revenue) and the timing of revenue recognition. In addition to the above the following standards are endorsed by EU and mandatory from 1 January 2010, but less relevant for Ageas: 1.. Improvements to IFRSs (2009), including a number of minor amendments to 12 different standards and. 2.. Amendment to IFRS 2 Share Based Payments (Group cash settled and share based payment transactions). 3.. Amendment to IAS 32 Classification of Right Issues. 4. IAS 39 Financial Instruments:. interpretations. a. Eligible Hedged Items 5.. IFRIC 16 Hedges of a Net Investment in a Foreign Operation. 6.. IFRIC 17 Distributions of Non-cash Assets to Owners. 7.. IFRIC 18 Transfers of assets from customers. 8.. IFRIC 19 Extinguishing financial liabilities with equity instruments. The following standards, interpretations and amendments have been issued by the IASB with an effective date for annual periods beginning on or after 1 January 2010 or later years, but were not endorsed by EU before 30 June 2010:. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 17. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. b. Embedded Derivatives (related to changes in IFRIC 9 Reassessment of embedded Derivatives).

(18) Standards:.  01-01-2013 IFRS 9 Financial Instruments (issued 12-11-2009) Interpretations:.  01-07-2010 IFRIC 19 Extinguishing financial liabilities with equity instruments (issued 26-11-2009)  01-01-2011 Amendments to IFRIC 14 Prepayment of a Minimum Funding Requirements (issued 26-11-2009) Amendments:.  01-01-2010 IFRS 1 (revised) First time adoption of IFRS – additional exemptions (issued 23-07-2009)  01-07-2010 Amendment to IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (issued 28-01-2010).  01-01-2011 IAS 24 Related Party Disclosures (revised, issued 04-11-2009)  01-01-2011 Improvements (non urgent but necessary amendments) to IFRS 1, 3 and 7 (issued in May 2010). 1.3. Accounting estimates. The preparation of the Consolidated Interim Financial Statements in conformity with IFRS, requires the use of certain measurement estimates at the end of the reporting period. In general these estimates and the methods used are consistent since the introduction of IFRS in 2005. Each estimate by nature introduces a significant risk of material. 18 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. adjustments (positive or negative) to the carrying amounts of assets and liabilities within the next financial year..

(19) Ultimo 30 June 2010 Assets. Estimation Uncertainly. Available for sale securities - Corporate dept securities - Structured credit instruments Level 2. - The valuation model - Inactive markets. Level 3. - The valuation model - Use of not market observable input - Inactive markets. Investment property. Determination of the useful life and residual value. Associates. A mix of uncertainties depending on the asset mix. Goodwill. - The valuation model - Financial and economic variables - Discount rate. Other intangible assets. - The inherent risk premium of the entity - Determination of the useful life and residual value. Liabilities Liabilities for Insurance contracts Life. - Actuarial assumptions - Interest rate used in liability adequacy test. Non-life. - Liabilities for (incurred but not reported) claims - Claim adjustment expenses. Pension obligations. - Actuarial assumptions - Discount rate The likelihood of a present obligation due to events in the past. For more detailed information on the application of these estimates, reference is made to the applicable notes in the Consolidated Financial Statements 2009.. 1.4. Segment reporting. Operating segments The primary format for reporting segment information is based on operating segments. Ageas’s reportable operating segments represent groups of assets and operations engaged in providing financial products or services, which are subject to different risks and returns and whose operating results are regularly reviewed by the CEO. Ageas announced in September 2009 a new organisational structure based on a lean Executive committee and a Management Committee including the CFO and CEO of four geographical regions. This structure is operational from 1 January 2010 onwards.. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 19. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Provisions.

(20) Ageas is now organised into five operating segments (for details see below):.     . Belgium United Kingdom (UK) Continental Europe Asia General Account. To align the reporting structure with the management structure Ageas has adapted the reporting structure. From 1 January 2010 the reporting segments were changed in accordance with IFRS 8 Operating Segments. Ageas decided that the most appropriate way of reporting operating segments under IFRS is per region in which Ageas operates, meaning Belgium, United Kingdom, Continental Europe and Asia. In addition, Ageas will report activities not related to the core insurance business such as group finance and other holding activities within the General Account that will be presented as a separate operating segment. Following the change of the composition of the reportable segments Ageas have restated the corresponding items of segment information for earlier periods. Ageas’s segment reporting reflects the full economic contribution of the businesses of Ageas. The aim is direct allocation to the businesses of all statements of financial positions and income statement items for which the businesses have full managerial responsibility. Segment information is prepared based on the same accounting policies as those used in preparing and presenting Ageas’s Consolidated Interim Financial Statements for the first half-year (as described in note 1) and by applying appropriate allocation rules. Transactions between the different businesses are executed under standard commercial terms and conditions.. 1.5. Scope of consolidation. The Consolidated Interim Financial Statements for the first half-year includes ageas SA/NV and ageas N.V. (the ‘Parent applies consortium accounting in order to reflect its activities in the most reliable manner in accordance with the EU 7th Directive, dated 13 June 1983 (83/349/EEC). Investments in associates – investments whereby Ageas has significant influence, but does not control – are accounted for using the equity method.. 20 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Companies’) and their subsidiaries. In combining the financial statements of ageas SA/NV and ageas N.V., Ageas.

(21) 2. Acquisitions and disposals. The following major acquisitions and disposals were made in 2010 and 2009. Details on acquisitions and disposals, if any, which took place after the date of the statement of financial position are included in the note Events after the date of the statement of financial position.. 2.1. Disposals in 2010. 2.1.1. Fortis Luxembourg Non-vie. On 6 October 2009, Ageas announced the sale of its Luxembourg Non-Life activities to La Bâloise, for a total consideration of EUR 23.0 million. The sale took effectively place in January 2010. The realised capital gain amounts to EUR 12.4 million.. 2.2. Acquisitions in 2009. 2.2.1. Royal Park Investments SA/NV. As a result of the transactions closed on 12 May 2009, Ageas acquired, for the total sum of EUR 760.0 million, a 44.7% stake in Royal Park Investments (RPI), a special purpose vehicle that acquired part of the structured credit portfolio of Fortis Bank. This stake has been accounted for using the equity method. More information about RPI is given in note 8. 2.2.2. Acquisition of 50% + 1 share of UBI Assicurazioni. Ageas and BNP Paribas Assurance acquired 50% + 1 share of UBI Assicurazioni from UBI Banca at year-end 2009. UBI Assicurazioni is active in the Italian market for non-life insurance, especially in the motor and property business, primarily through distribution through the bank channel of UBI Banca. The transaction was executed through a holding company (F&B Insurance Holdings), which is owned by Ageas (50% + 1 share) and BNP Paribas Assurance (50% -1 share). UBI Banca will keep 50% - 1 share. Ageas and BNP Paribas Assurance have paid a consideration of EUR 122.7 million in cash on completion. An additional consideration currently estimated at approximately EUR 40 million (net present value) future. Including the additional payments, the acquisition price was EUR 162.7 million resulting in goodwill of EUR 126.2 million. 2.2.3. Other acquisitions. Further to the investments mentioned above Ageas concluded some minor acquisitions, especially in real estate funds and the parking business in 2009.. 2.3. Disposals in 2009. Ageas sold on 12 May 2009 a stake of 25% + 1 share in AG Insurance to Fortis Bank for EUR 1,375.0 million. The sale generated a capital gain of EUR 697.0 million, which is included in the result for 2009.. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 21. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. will be payable to UBI Banca over a 10 year period, dependent upon the achievement of certain volume thresholds in the.

(22) 3. Outstanding shares and earnings per share. The following table shows the number of outstanding shares.. Number of shares as at 31 December 2009. Shares. Treasury. Shares. issued. shares. outstanding. 2,516,657,248. Balance (acquired)/sold. ( 41,629,830 ). 2,475,027,418. 108,500. Number of shares as at 30 June 2010. 2,516,657,248. ( 41,521,330 ). 108,500 2,475,135,918. Shares issued and potential number of shares In addition to the shares already outstanding, Ageas issued options or instruments containing option features, which could upon exercise lead to an increase in the number of outstanding shares. The table below shows an overview of the shares issued and the potential number of shares as at 30 June 2010. Number of shares as at 30 June 2010. 2,516,657,248. Shares that may be issued: - in connection with option plans. 30,232,000. - in connection with convertible securities related to the MCS. 106,723,586. Total potential number of shares as at 30 June 2010. 2,653,612,834. Fortis Bank has issued a financial instrument called CASHES in 2007. One of the features of this instrument is that it can only be redeemed through conversion of the instrument into 125,313,283 Ageas shares. Fortis Bank has acquired all necessary Ageas shares to redeem the CASHES (consequently they are included in the number of shares outstanding of Ageas). However, Fortis Bank and Ageas have agreed that these shares will not receive dividend nor will they have voting rights as long as these shares are pledged for the CASHES (see Earnings per share and note 27 Contingent liabilities). The number of shares issued includes also shares that were issued related to the convertible instrument FRESH (39,682,540). The FRESH is a financial instrument that was issued in 2002 by Ageasfinlux. One of the features of this Ageasfinlux has acquired all necessary Ageas shares to redeem the FRESH (consequently they are included in the number of shares outstanding of Ageas). However, Ageasfinlux and Ageas have agreed that these shares will not receive dividend nor will they have voting rights as long as these shares are pledged for the FRESH. As Ageasfinlux is a subsidiary of Ageas, the shares related to the FRESH are treated as treasury shares and eliminated against shareholders’ equity (Earnings per share and note 16 Subordinated liabilities). The MCS will be converted mandatorily on 7 December 2010 into Ageas shares the exact number of which will depend on the then prevailing share price, with a minimum of 88,928,413 and a maximum of 106,723,586 Ageas shares (the reported number of outstanding shares at 31 December 2009 does not include these shares yet). According to agreements entered into between the parties, Fortis Bank Nederland N.V. should compensate Ageas by issuing new shares at conversion; this compensation is disputed by the Dutch State, after it took over control of Fortis Bank Nederland N.V. (see Earnings per share and note 27 Contingent liabilities).. 22 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. instrument is that it can only be redeemed through conversion of the instrument into 39,682,540 Ageas shares..

(23) At conversion of the MCS, Ageas will record a EUR 2 billion increase in its equity against a EUR 2 billion receivable for new Fortis Bank Nederland N.V. shares to be received from Fortis Bank Nederland N.V. In the event that the Dutch State successfully disputes this claim, Ageas will need to record an impairment on this receivable, depending on the level of compensation that will be agreed. Earnings per share The following table details the calculation of earnings per share. First half-year 2010. First half-year 2009. Net profit attributable to shareholders. 455.0. 895.8. Net profit used to determine diluted earnings per share. 455.0. 895.8. 2,475,108,943. 2,474,960,794. Weighted average number of ordinary shares for basic earnings per share Adjustments for: - restricted shares. 457,401. 738,895. 2,475,566,344. 2,475,699,689. Basic earnings per share (in euro per share). 0.18. 0.36. Diluted earnings per share (in euros per share). 0.18. 0.36. Weighted average number of ordinary shares for diluted earnings per share. In the first half-year of 2010 weighted average options on 32,036,277 shares (first half-year of 2009: 42,277,221) with a weighted average exercise prices of EUR 21.61 per share (first half-year of 2009: EUR 22.29) were excluded from the calculation of diluted EPS because the exercise price of the options was higher than the average market price of the shares. During 2010 39,682,540 Ageas shares (first half-year of 2009: 39,682,540) arising from the FRESH, were excluded from the calculation of diluted earnings per share because the interest per share saved on these securities was higher than the basic earnings per share. The Ageas shares to be issued related to the MCS (106,723,586) have been excluded from the calculation of diluted earnings per share because Ageas expects that the issuance of these shares will not have a dilutive effect (see also note 27 Contingent liabilities).. the ordinary shares although they do not bear dividend nor voting rights until the moment of conversion of the CASHES (see also note 27 Contingent liabilities).. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 23. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Ageas shares totalling 125,313,283 (first half-year of 2009: 125,313,283) issued in relation to CASHES are included in.

(24) 4. Supervision and solvency. After the sale of the banking operations in October 2008, Ageas has been considered an Insurance Group. As such Ageas is subject to supervision on the operating company level as well as on the consolidated level.. 4.1. Ageas consolidated. At the Ageas consolidated level, Ageas is supervised by the Belgian Banking, Finance and Insurance Commission (BFIC). Their prudential supervision includes semi-annual verification that Ageas on a consolidated basis meets the solvency requirements. The subsidiaries of Ageas are supervised by the regulators in the countries in which they are located.. 4.2. Insurance. Ageas’s insurance subsidiaries are required to maintain a minimum level of qualifying capital relative to the premiums received for Non-life insurance contracts and relative to the Life insurance liabilities arising from insurance and investment contracts. The consolidated regulatory solvency requirements of Ageas’s insurance subsidiaries are EUR 2,907.3 million as at 30 June 2010 (31 December 2009: EUR 2,743.4 million) and are covered by the available qualifying total capital.. 4.3. General Account. The General Account includes the so called legacy related issues. For Ageas Reinsurance a capital requirement of EUR 10.4 million (31 December 2009: EUR 12.1 million) has been defined to cover the risks.. 4.4. Ageas core equity target and total capital. General Account. Ageas is of the opinion that the capitalisation levels appropriately reflect the specific characteristics of the businesses including the commitments resulting from agreements with its partners. Ageas expects to maintain a minimum aggregate solvency ratio of 200% of the minimum regulatory requirements. Ageas will review minimum targets at the time of introduction of Solvency II. A strong capital base in the individual insurance operations is deemed necessary on the one hand as a competitive advantage and on the other hand as being necessary to fund the significant organic growth that is planned while satisfying the local rating and solvency requirements.. 24 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Ageas reassessed during its recent strategic review the current capitalisation levels of its insurance activities and the.

(25) Capital ratios Ageas’s core equity amounted to EUR 8.9 billion at the end of the first half-year of 2010 (31 December 2009: EUR 8.7 billion). Core equity exceeds the total minimum requirement of the insurance activities by EUR 6.0 billion (31 December 2009: EUR 5.9 billion). The core equity of the insurance operations stood at EUR 6.4 billion (31 December 2009: EUR 6.1 billion), while total available capital at the insurance entities amounted to EUR 6.6 billion (31 December 2009: EUR 6.4 billion), 226.4% of the legally required minimum (31 December 2009: 233.9%). The solvency ratio of Belgium amounted to 195.0% (31 December 2009: 205.2%). Based on local accounting and regulatory supervision, the solvency ratio for Belgium was even 207.1% (31 December 2009: 223.4%). Key Capital Indicators. 30 June 2010 In EUR million. Continental Belgium. UK. Europe. Asia. Insurance. General. Total. Total. (incl. elim). Ageas. Core equity. 3,488.1. 563.4. 1,291.1. 1,039.9. 6,382.5. 2,515.1. 8,897.6. Total available capital. 4,094.8. 563.4. 1,319.1. 604.6. 6,581.9. 2,282.9. 8,864.8. Minimum solvency requirements. 2,100.4. 186.3. 555.3. 65.3. 2,907.3. 10.4. 2,917.7. Amount of total capital above minimum. 1,994.4. 377.1. 763.8. 539.3. 3,674.6. Core solvency ratio. 166.1%. 302.4%. 232.5%. 1,592.5%. 219.5%. Total solvency ratio. 195.0%. 302.4%. 237.5%. 925.9%. 226.4%. 31 December 2009. Core equity. 3,511.7. 472.4. 1,297.6. 843.0. 6,124.7. 2,536.3. 8,661.0. Total available capital. 4,120.0. 472.4. 1,325.6. 498.4. 6,416.4. 2,316.3. 8,732.7. Minimum solvency requirements. 2,007.8. 153.8. 529.5. 52.3. 2,743.4. 12.1. 2,755.5. Amount of total capital above minimum. 2,112.2. 318.6. 796.1. 446.1. 3,673.0. Core solvency ratio. 174.9%. 307.2%. 245.1%. 1611.9%. 223.2%. Total solvency ratio. 205.2%. 307.2%. 250.3%. 953.0%. 233.9%. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 25. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. In EUR million.

(26) Reconciliation from net equity to total capital Ageas’s reconciliation from net equity to total capital is presented below. 30 June 2010 Share capital and reserves. 31 December 2009. 7,755.5. 6,450.3. Net profit attributable to shareholders. 455.0. 1,209.8. Unrealised gains and losses. 942.6. 770.9. Shareholders' equity. 9,153.1. 8,431.0. Non-innovative hybrid capital instruments. 1,496.9. 1,496.4. Non-controlling interests. 1,682.5. 1,654.0. Revaluation of real estate to fair value Revaluation of debt securities, net of tax and shadow accounting Revaluation of equity securities, net of tax and shadow accounting. 554.5 ( 1,043.0 ). 558.7 ( 809.9 ). ( 0.9 ). ( 9.9 ). Goodwill. ( 700.3 ). ( 649.7 ). Participation Royal Park Investments. ( 839.6 ). Expected dividend. ( 760.0 ) ( 201.0 ). Expected dividend, related to Call option BNP Paribas shares. ( 759.0 ). Other. ( 646.7 ). ( 467.6 ). Core equity. 8,897.5. 8,661.0. 495.0. 494.7. Innovative capital instruments Subordinated liabilities. ( 581.0 ). 29.1. 29.1. Other prudential filters and deductions on total capital. ( 556.8 ). ( 452.1 ). Total capital. 8,864.8. 8,732.7. Participating interests in financial institutions that are not fully consolidated are deducted from total capital. The core equity instruments issued by Ageas and on-lent to Fortis Bank SA/NV (NITSH I and part of NITSH II for a total amount of EUR 992.5 million; 31 December 2009 EUR 900.1 million) are excluded from the core equity. Unrealised gains on real estate after tax within Belgium are included in core equity for 90%, the remainder for 100% in accordance with local. 26 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. regulation..

(27) CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 27. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Explanatory notes to the Consolidated statement of financial position.

(28) 5. Cash and cash equivalents. Cash includes cash on hand, current accounts and other financial instruments at central banks with a term of less than three months from the date on which they were acquired. The composition of cash and cash equivalents is as follows:. Cash on hand Due from banks Other Total cash and cash equivalents. 28 | first half-year 2010. 31 December 2009. 1.7. 1.9. 4,515.4. 5,480.2. 70.9. 153.6. 4,588.0. 5,635.7. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. 30 June 2010.

(29) 6. Investments. The composition of Investments is as follows: 30 June 2010. 31 December 2009. Financial investments - Available for sale - Held at fair value through profit or loss - Derivatives held for trading Total, gross. 55,155.4. 52,910.9. 178.8. 189.5. 78.7. 150.3. 55,412.9. 53,250.7. Impairments: - of investments available for sale. ( 188.1 ). ( 180.6 ). Total impairments. ( 188.1 ). ( 180.6 ). Total. 6.1. 55,224.8. 53,070.1. Investments available for sale. The fair value and amortised cost of available for sale investments including gross unrealised gains and gross unrealised losses are as follows: Historical/. Gross. Gross. amortised. unrealised. unrealised. cost. gains. losses. Fair Impairments. value. 30 June 2010 Government bonds. 32,291.0. 1,556.6. ( 849.4 ). Corporate debt securities. 18,838.8. 1,141.7. ( 136.9 ). ( 2.6 ). 470.4. 20.1. ( 16.4 ). ( 17.1 ). 457.0. 51,600.2. 2,718.4. ( 1,002.7 ). ( 19.7 ). 53,296.2. Available for sale investments in debt securities Private equities and venture capital. 19,841.0. 3.5. 0.5. ( 1.3 ). 2.7. 1,806.0. 90.1. ( 66.4 ). ( 167.1 ). 1,662.6. 1,815.3. 90.6. ( 66.4 ). ( 168.4 ). 1,671.1. 53,415.5. 2,809.0. ( 1,069.1 ). ( 188.1 ). 54,967.3. Government bonds. 32,564.0. 1,202.2. ( 330.9 ). Corporate debt securities. 16,658.9. 720.7. ( 70.6 ). ( 3.6 ). 17,305.4. Equity securities Other investments Available for sale investments in equity securities and other investments Total investments available for sale. 5.8. 5.8. 31 December 2009. Structured credit instruments Available for sale investments in debt securities Private equities and venture capital Equity securities Other investments Available for sale investments in equity securities and other investments Total investments available for sale. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. 33,435.3. 462.8. 13.7. ( 17.9 ). ( 27.0 ). 431.6. 49,685.7. 1,936.6. ( 419.4 ). ( 30.6 ). 51,172.3. ( 1.2 ). 2.1. 154.3. ( 13.3 ). ( 148.7 ). 1,551.2. 1,567.0. 154.3. ( 13.3 ). ( 149.9 ). 1,558.1. 51,252.7. 2,090.9. ( 432.7 ). ( 180.5 ). 52,730.4. 3.3 1,558.9 4.8. 4.8. first half-year 2010 | 29. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Structured credit instruments. 32,998.2.

(30) Government bonds detailed by country of origin. Historical/. Gross. amortised. unrealised. Fair. cost. gains (losses). value. 30 June 2010 Belgian national government. 9,625.2. 561.0. 10,186.2. Dutch national government. 1,266.0. 87.6. 1,353.6. German national government. 2,890.2. 282.4. 3,172.6. Italian national government. 3,726.3. 23.0. 3,749.3. French national government. 3,811.9. 203.8. 4,015.7. 513.7. 19.6. Great Britain national government. 533.3. Greek national government. 1,934.0. ( 623.4 ). 1,310.6. Spanish national government. 1,739.9. ( 46.7 ). 1,693.2. Portuguese national government. 1,500.4. ( 82.1 ). 1,418.3. Austrian national government. 2,200.3. 140.5. 2,340.8. Finnish national government. 769.8. 33.5. 803.3. Irish national government. 598.7. ( 6.7 ). 592.0. Slovenian national government. 375.6. 25.8. 401.4. Czech republic national government. 357.4. 21.4. 378.8. Slovakian national government. 211.3. 13.0. 224.3. United States of America national government. 312.1. 37.7. 349.8. Other national governments. 458.2. 16.8. 475.0. 32,291.0. 707.2. 32,998.2. 6,572.2. 369.0. 6,941.2. 663.6. 17.6. 681.2. 1,632.3. 42.9. 1,675.2. Italian national government. 8,598.0. 314.9. 8,912.9. French national government. 1,638.5. 80.2. 1,718.7. Total. 31 December 2009 Dutch national government German national government. Great Britain national government. 545.6. 7.7 ( 240.6 ). 553.3. Greek national government. 4,317.8. 4,077.2. Spanish national government. 1,943.9. 58.5. Portuguese national government. 2,962.8. 109.4. 3,072.2. Austrian national government. 1,527.2. 29.3. 1,556.5 186.9. 2,002.4. Finnish national government. 181.1. 5.8. Irish national government. 580.2. 17.6. 597.8. Slovenian national government. 511.5. 28.9. 540.4. Czech republic national government. 317.6. 12.0. 329.6. Slovakian national government. 138.4. 8.9. 147.3. United States of America national government. 269.0. 3.5. 272.5. Other national governments. 164.3. 5.7. 170.0. 32,564.0. 871.3. 33,435.3. Total. There were no impairments on government bonds in the first half-year of 2010 and 2009.. 30 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Belgian national government.

(31) 6.2. Net unrealised gains and losses on Available for sale investments included in equity 30 June 2010. 31 December 2009. Available for sale investments in debt securities: Carrying amount. 53,296.2. 51,172.3. Gross unrealised gains and losses. 1,715.7. 1,517.2. - Related tax. ( 539.0 ). ( 482.9 ). Shadow accounting. ( 265.3 ). ( 302.5 ). - Related tax Net unrealised gains and losses. 73.5. 80.7. 984.9. 812.5. 1,671.1. 1,558.1. Available for sale investments in equity securities and other investments: Carrying amount Gross unrealised gains and losses. 24.2. 141.0. - Related tax. ( 12.6 ). ( 14.7 ). Shadow accounting. ( 23.0 ). ( 41.7 ). - Related tax Net unrealised gains and losses. 8.4. 14.7. ( 3.0 ). 99.3. Available for sale investments in equity securities and other investments also include private equities and venture capital and all other investments, excluding debt securities.. 6.3. Investments held at fair value through profit or loss. The following table provides information about the Investments that are held at fair value and for which unrealised gains or losses are recorded through profit or loss.. Government bonds Corporate debt securities Structured credit instruments Debt securities Equity securities. 10.4 90.4. Total investments held at fair value through profit or loss. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. 82.3. 80.6. 90.8. 171.0. 183.5. 7.8. Other investments Equity securities and other investments. 31 December 2009. 3.4 2.6. 7.8. 6.0. 178.8. 189.5. first half-year 2010 | 31. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. 30 June 2010.

(32) 6.4. Real estate. The fair value of Real estate, held as investment as well as for own use, is set out below. 30 June 2010. 31 December 2009. Fair value: Investment property. 2,111.6. Land and buildings held for own use. 1,414.2. 2,205.4 1,425.6. Total fair value. 3,525.8. 3,631.0. Investment property. 1,576.2. 1,652.7. Land and buildings held for own use. 1,002.1. 1,035.1. Total carrying amount. 2,578.3. 2,687.8. Gross unrealised gain / loss Taxation Net unrealised gain / loss (not recognised in equity). 32 | first half-year 2010. 947.5. 943.2. ( 308.8 ). ( 299.9 ). 638.7. 643.3. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Carrying amount:.

(33) 7. Loans 30 June 2010. 31 December 2009. Loans to banks. 2,292.0. 1,817.2. Loans to customers. 2,373.4. 2,325.3. Total. 4,665.4. 4,142.5. Less impairments: - specific credit risk - incurred but not reported (IBNR) Total loans. 7.1. ( 10.0 ) ( 0.9 ) 4,654.5. ( 9.4 ) ( 0.8 ) 4,132.3. Loans to banks. Loans to banks consists of the following. 30 June 2010 Interest-bearing deposits Subordinated loans. 31 December 2009. 1,187.0. 901.7. 992.5. 900.1. Other. 112.5. 15.4. Total. 2,292.0. 1,817.2. Less impairments: - specific credit risk Loans to banks. 7.2. ( 1.6 ) 2,290.4. ( 1.4 ) 1,815.8. Loans to customers. Loans to customers is as follows. 30 June 2010. Residential mortgage Consumer loans. 0.2 1,620.2. 1,594.7. 5.3. 7.2. Commercial loans. 119.4. 113.2. Policyholder loans. 159.3. 148.0. 469.0. 397.3. 2,373.4. 2,325.3. Financial lease receivables Other loans Total. 64.9. Less impairments: - specific credit risk. ( 8.4 ). - incurred but not reported (IBNR). ( 0.9 ). Loans to customers. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. 2,364.1. ( 8.0 ) ( 0.8 ) 2,316.5. first half-year 2010 | 33. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Government and official institutions. 31 December 2009.

(34) 8. Royal Park Investments. As a result of the transactions closed on 12 May 2009, Ageas acquired, for the total sum of EUR 760.0 million, a 44.7% stake in Royal Park Investments (RPI), a special purpose vehicle that acquired part of the structured credit portfolio of Fortis Bank. This stake has been accounted for using the equity method. RPI acquired from Fortis Bank on the closing date a portfolio of structured credits for an agreed purchase price of EUR 11.7 billion. The corresponding face value of the portfolio amounted to EUR 20.5 billion at 12 May 2009. This purchase was funded by EUR 1.7 billion equity, EUR 5 billion super senior debt and EUR 5 billion senior debt; the senior debt includes a loss absorption mechanism. The senior debt was provided by BNP Paribas and by Fortis Bank. The funding provided by Fortis Bank is guaranteed by the Belgian government. Any cash generated by RPI will first be used to repay the super senior debt. The initial recognition of the investment under the equity accounting method is at cost, followed by an impairment test of the carrying amount. Ageas has requested RPI to draw up financial information based on Ageas IFRS accounting policies. RPI has recorded the acquisition of the portfolio, related funding and people and processes as a business combination under IFRS. At acquisition the asset portfolio is recorded at market value (EUR 8.2 billion) and the difference between the purchase price (EUR 11.7 billion) and the market value amounting to EUR 3.5 billion was recorded in the IFRS statement of financial position of RPI as a deferred tax asset (EUR 1.2 billion: 33.9% of 3.5 billion) and goodwill of EUR 2.3 billion. RPI manages the portfolio to maximise the value for its shareholders as defined in the management guidelines drawn up by the RPI Board. In the current circumstances, this implies a run off scenario. In such case IFRS requires amortised cost as subsequent measurement of the asset portfolio. IFRS requires for variable rate instruments, an instrument by instrument re-computation of the amortised cost based on actualised cash flow information per asset. However, RPI does not have such information available and to produce this information would require undue cost and efforts. In the absence of such information and taking into consideration that management is also using fair value information in the context of periodically monitoring the asset portfolio, Ageas decided to use for subsequent measurement of the asset. To determine the cash flows of the portfolio and related funding several assumptions were made such as loss given default, probability of default, pre-payment speed, housing price evolutions, additional sector and geographical data when needed. Given the fact that the uncertainties were taken into consideration when determining the cash flows, and the fact that the funding of RPI is guaranteed, the expected cash flows have been discounted at 7.8% being the risk free interest rate for Belgium plus the normal equity premium. Since RPI is in fact a portfolio in run-off, the profits included in the portfolio and related funding will be realised over time and will not be replaced by profits from new transactions, the goodwill will need to be impaired in the period the portfolio runs off. The goodwill recognised by RPI represents for a significant part the future profits of this business.. 34 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. portfolio the fair value through profit or loss..

(35) Using the above mentioned Ageas accounting principles, for the first half 2010, the RPI’s net result under IFRS, at 100%, amounted to EUR 51 million. As per 30 June, RPI performed an impairment test on the goodwill recognised by RPI on the acquisition of the loan portfolio and related funding. The outcome was that no impairment of goodwill was necessary in the first half year of 2010. As a consequence, Ageas could account a positive contribution of EUR 22.5 million (31 December 2009: EUR 0.6 billion, before goodwill impairment) into the net result, in line with its stake in RPI, and reported under ‘share in result of associates’. In addition, RPI concluded a number of interest rate swaps early 2010, exchanging variable interest streams into fixed interest streams. Ageas decided to apply cash flow hedge accounting on these swaps. All fair value movements flow through equity (EUR 57 million for the first half year of 2010). As a result of both events, Ageas’ equity investment in RPI increased from EUR 760 million to EUR 840 million. At the end of the first half-year of 2010 the fair value of the investment portfolio under IFRS amounts to EUR 7.6 billion (31 December 2009: EUR 7.2 billion), the goodwill EUR 1.7 billion (31 December 2009: EUR 1.7 billion) and the deferred tax asset EUR 1.0 billion (31 December 2009: EUR 0.9 billion). The funding measured at amortized cost, amounts to EUR 8.6 billon (31 December 2009: EUR 8.2 billion) and the equity amounts to EUR 1.9 billion (31 December 2009: EUR 1.7 billion). Total net interest payments and principal collection for the first half year of 2010 amounted to EUR 110 million (EUR 91 million as of 31 December 2009 since the acquisition date) and EUR 0.9 billion1 (EUR 1.1 billion as of 31 December 2009 since the acquisition date) respectively.. 9. Reinsurance and other receivables. Included under Reinsurance and other receivables is the Claim amounting to EUR 367.0 million on Fortis Capital Company Limited, Fortis Bank Nederland N.V. and the Dutch State. This claim is for full compensation for the payment made by Ageas to Fortis Capital Company Limited (a subsidiary of Fortis Bank Netherlands N.V.) to allow it to pay the above amount to the holders of preference shares. Due to the fact that the claim is contested by the counterparty, the.  1). Amounts converted at currency rates of 30 June 2010.. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 35. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. amount was fully impaired in 2009..

(36) 10 Call option BNP Paribas shares Description of the options Under the agreement signed on 12 May 2009, Ageas was granted a cash-settled call option by the Federal Holding and Investment Corporation (Société Fédérale de Participations et d'Investissement / Federale Participatie- en Investeringsmaatschappij – SFPI/FPIM) that allows Ageas to benefit from any appreciation in the value of 121,218,054 BNP Paribas shares held by the SFPI/FPIM. These shares were acquired by the SFPI/FPIM in return for selling 75% + 1 share of Fortis Bank. This option entitles Ageas to the difference between the strike price of EUR 68 and the market price of the BNP Paribas shares at the time of exercise, or the selling price of the underlying BNP Paribas shares, at the discretion of SFPI/FPIM. These rights have replaced the ‘coupon 42’. After the Rights Issue of BNP Paribas on 29 September 2009 the exercise price was reduced to EUR 66.672. The granted rights include some non-standard features that differ from standard ISDA based option protocols, such as restrictions on transferability, limitations on freedom of exercise, forced exercise under specific circumstances and specific adjustment mechanics such as dilution and claim issues. After the expiration of a lock-up period on 10 October 2010, Ageas can exercise the options for a period of six years ending 10 October 2016. Ageas also investigated various options to monetize the options, but decided now to move to a gradual exercise strategy in accordance with a disciplined methodology, once they are in the money. The option is recorded at fair value, with subsequent revaluations recorded in the income statement under unrealised gain (loss) on Call option BNP Paribas shares. Value calculation The theoretical value of an individual option can be calculated based on Black-Scholes option valuation techniques. Besides market observable data on the reporting date, such as interest yield, actual and strike price of the share and the remaining duration of the option, the calculation needs to include assumptions regarding future dividend and volatility. Non-standard features should also be taken into account.. (previously EUR 68.00) due to the rights issue of BNP Paribas at the end of September 2009:. BNP Paribas shareprice Volatility Dividend yield Price per option up to 10 October 2016 Theoretical value of 121.2 million options Estimated value, after adjustment for non standard features (30%). 36 | first half-year 2010. 30 June 2010. 31 December 2009. EUR 44.77. EUR 55.85. 39%. 27%. 5.21%. 3.57%. EUR 8.95. EUR 10.37. EUR 1,085 million. EUR 1,257 million. EUR 759 million. EUR 880 million. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. The following data used for 31 December 2009 and 30 June 2010 are based on an adjusted strike price of EUR 66.672.

(37) Volatility Given the very large number of options on BNP Paribas shares carried by Ageas, representing 10.24% of the BNP Paribas outstanding shares, the monetisation of the options is expected to have an effect on the value of traded options and hence the implied volatility. The volatility used in the valuation at year end 2009 therefore included a size-discount of 7%. Ageas has now decided to move to a gradual exercise strategy in accordance with a disciplined methodology, in order to minimize the impact of the implied volatility of the shares on the value of the call option. Following the move towards a gradual exercise strategy, Ageas decided to use volatility per 30 June based on extrapolated implied volatility observed in the market at that date, without applying a discount for valuing the call option. The value of the call option at the end of June amounted to EUR 759 million, after adjustment for non-standard features. When taking into account the 7% discount on the volatility the value of the option would have amounted to EUR 528 million. Sensitivity valuation for assumption changes Both the applied volatility and the dividend yield assumption have a significant influence on the value of the options: a change in the volatility of 5% on 30 June 2010 results in a 22% change in the theoretical value of the option. A decrease of the dividend yield to 4%, keeping other input variables equal, results in an 8% increase of the theoretical value, while an increase of the dividend yield to 6%, all other input variables kept equal, results in a 5% decrease of the theoretical value of the options. Adjustment for non standard features Given the unusual features of the option, professional market parties will apply a significant discount to the theoretical valuation. Ageas has decided to lower the theoretical value by 30% for these non-standard features, based on indications from professional market parties ranging from 10% to 50%. Pay out of proceeds Ageas has undertaken to propose to pay out as dividend the benefits of exercises, monetisation or any other contemplated structure, to the extent permitted by law and taking into account practical constraints. The Belgian Ruling Commission has confirmed that the grant of the BNP Paribas option is not itself a taxable event for able to achieve a situation in which it will not have to pay corporate income tax when the gains on the option are realised and thus be able to propose, to the extent permitted by law, to dividend out the gross proceeds.. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 37. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. ageas SA/NV. Given the progress made with the liquidation of Brussels Liquidation Holding, Ageas believes it will be.

(38) 11 Liabilities arising from Life insurance contracts The following table provides an overview of the liabilities arising from Life insurance contracts. 30 June 2010. 31 December 2009. Liability for future policyholder benefits. 23,195.6. 22,466.2. Reserve for policyholder profit sharing. 310.6. 297.3. Shadow accounting adjustment. 159.8. 170.8. 23,666.0. 22,934.3. Before eliminations Eliminations Gross Reinsurance Net. ( 3.5 ). ( 3.5 ). 23,662.5. 22,930.8. ( 36.7 ). ( 27.5 ). 23,625.8. 22,903.3. 12 Liabilities arising from Life investment contracts The following table provides an overview of the liabilities arising from Life investment contracts. 30 June 2010. 31 December 2009. Liability for future policyholder benefits. 25,714.9. Reserve for policyholder profit sharing. 81.9. 194.0. 128.3. 173.2. 25,925.1. 24,332.7. 25,925.1. 24,332.7. Shadow accounting adjustment Gross. 23,965.5. Net. 13 Liabilities related to Unit-linked contracts The liabilities related to Unit-linked contracts are broken down into insurance and investment contracts as follows: 30 June 2010. 31 December 2009. Insurance contracts. 1,635.3. 1,646.7. Investment contracts. 19,525.4. 19,126.1. Total. 21,160.7. 20,772.8. 38 | first half-year 2010. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. Reinsurance.

(39) 14 Liabilities arising from Non-life insurance contracts The following table provides an overview of the liabilities arising from Non-life insurance contracts. 30 June 2010. 31 December 2009. Claims reserves. 4,201.0. 4,048.3. Unearned premiums. 1,146.1. 960.0. Reserve for policyholder profit sharing Before eliminations Eliminations Gross. 3.9. 8.6. 5,351.0. 5,016.9. ( 88.5 ). ( 82.9 ). 5,262.5. 4,934.0. Reinsurance. ( 281.0 ). ( 255.0 ). Net. 4,981.5. 4,679.0. 15 Debt certificates The following table shows the types of Debt certificates (EMTN) issued by Ageas and the amounts outstanding. 31 December 2009. Held at amortised cost. 653.5. 660.8. Held at fair value through profit or loss. 242.5. 254.2. Total debt certificates. 896.0. 915.0. CONSOLIDATED INTERIM FINANCIAL STATEMENTS. first half-year 2010 | 39. WorldReginfo - ba4fa773-d949-497d-8d19-676b420024c5. 30 June 2010.