KBC Group

KBC completes sale of KBC Bank Deutschland

Press release
Outside trading hours - Regulated information*

Brussels, 1 October 2014

KBC completes sale of KBC Bank Deutschland

Yesterday, KBC completed the sale of KBC Bank Deutschland AG to several investors linked to Teacher Retirement System (Texas), Apollo Global Management LLC, Apollo Commercial Real Estate Finance Inc. and Grovepoint Capital LLP. The deal will free up some 0.1 billion euros of capital for KBC, primarily by reducing risk-weighted assets. It will not have any material impact on KBC's financial results, but will improve KBC's solvency position by around 15 basis points. The sale of KBC Bank Deutschland also heralds the final operation to be completed under the divestment programme agreed with the European Commission in 2009.

Johan Thijs, CEO of  KBC Group NV had this to say on the deal: 'I am extremely pleased that this transaction finally brings down the curtain on the divestment programme that we had agreed with Europe. KBC can now fully focus on achieving its aim of becoming one of the best-performing, retail financial institutions in Europe and also the reference in bank-insurance in its core markets. I would like to thank our clients, shareholders, staff and all other stakeholders for the trust they have placed in KBC during this whole period. Due in part to this trust, we have succeeded in completing the entire divestment programme within the set deadline and in what in some cases were far from ideal market conditions. I am convinced that KBC Bank Deutschland will be able to successfully continue its business activities under its new shareholder structure. I would like to take this opportunity to thank all the staff for their dedication and commitment over the past few years and to wish them every success in the future.'

KBC has now met all its commitments to the European Commission

The sale of KBC Bank Deutschland heralds the end of the divestment programme for KBC. In accordance with the arrangements made with the European Commission and after receiving state aid during the financial crisis of 2008 and 2009, KBC significantly refocused its strategy primarily to include a major divestment programme, a comprehensive reduction in risk-weighted assets and a lowering of the company's risk profile.

25 entities were sold or wound down under this programme and the business focus was redirected to bank-insurance in Belgium, the four core countries in Central Europe (Czech Republic, Slovakia, Hungary and Bulgaria) and Ireland. Scaling back the international loan portfolio has contributed to the decrease of risk-weighted assets by more than one-third since 2008 and the reduction of 22% in KBC's total assets to date.