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KBC Groep : KBC reaches agreement with the Republic of Slovenia regarding the sale of its remaining 22% stake in NLB

KBC Groep : KBC reaches agreement with the Republic of Slovenia regarding the
                    sale of its remaining 22% stake in NLB

Regulated information* -28December 2012 (08.00 a.m. CET)

Brussels, Ljubljana

Remaining divestment files ongoing

Yesterday, KBC Group and the Republic of Slovenia reached an agreement whereby
KBC will sell its remaining 22% stake in NLB to the Republic of Slovenia for a
total consideration of 2,765,282 euros, which represents 1 euro per share.  In 
doing so, KBC will fully exit NLB and comply with the strategic plan which  it 
agreed with the European Commission in November 2009. In this strategic  plan, 
KBC repeated that its non-strategic stake in NLB was earmarked for divestment.

On Monday, 24 December,  KBC announced the divestment  of its Russian  banking 
subsidiary, Absolut Bank,  to a  group of Russian  companies representing  the 
pension reserves of the Russian  non-state pension fund Blagosostoyanie.  This 
deal - for a total  consideration of 0.3 billion  euros plus repayment of  all 
KBC funding that is currently placed within Absolut Bank and which amounts  to 
0.7 billion euros - will free up around 0.3 billion euros of capital for KBC,
primarily by  reducing risk-weighted  assets by  2 billion  euros, which  will 
ultimately improve KBC's tier-1 ratio by around 0.4%.

For three  of  its  remaining  divestment files,  i.e.  Antwerp  Diamond  Bank 
(Belgium), KBC Banka (Serbia) and KBC Bank Deutschland (Germany), KBC is still
in discussions with a number of interested parties, while Kredyt Bank (Poland)
is in a merger process with BZ WBK  which is ongoing. For all four files,  KBC 
is also  maintaining  an open  and  constructive dialogue  with  the  European 
Commission.

The Republic of Slovenia decided to take over KBC's stake in NLB to be able to
control  the  process  of  finding  new  long-term  shareholders  for  NLB  in 
accordance with the  decisions taken  by the  relevant Slovenian  authorities. 
This transaction gives rise  to a negative impact  on KBC's earnings of  -0.1 
billion euros reflected  in the  4Q2012 results,  whilst the  impact on  KBC's 
capital is negligible. 
KBC's representatives on the Supervisory Board  of NLB, John Hollows and  Riet 
Docx, and KBC's  representative on the  Management Board of  NLB, Guy  Snoeks, 
resigned from their positions at NLB, effective 31 December, 2012.
Completion of the agreement is expected  early 2013 after the approval of  the 
Slovenian Competition Authority has been obtained.

KBC will  continue  its  open  and constructive  dialogue  with  the  European 
Commission,  with  whom  certain  timings  and  procedures  have  been  agreed 
regarding the  signing  of  some  remaining  divestments  agreements  (Antwerp 
Diamond Bank, KBC Bank Deutschland, stake in Kredyt Bank, and KBC Banka by the
end of 2012).
Johan Thijs, CEO of KBC Group commented: "Following the approval on 4 December
2012 of the Polish regulator, KNF, of  the merger of Kredyt Bank with BZ  WBK, 
the European  Commission  agreed  to  extend the  deadline  to  complete  the 
divestment process so that it still  remains on track. The divestment  process 
for KBC Banka (Serbia) is also well  under way as negotiations with a  number 
of bidders are ongoing. For this  reason, the Commission also agreed to  grant 
KBC an extension in order to finalise the process, provided certain behavioral
commitments are  also prolonged.  As a  rule and  on principle,  KBC will  not 
reveal further details on  these files in order  not to hinder the  divestment 
process.
In view  of  the ongoing  turbulent  climate  on the  financial  markets,  the 
acquisition of  Antwerp Diamond  Bank  and KBC  Bank Deutschland  by  external 
strategic  investors  is  more  challenging.   A  number  of  parties   remain 
interested, however,  in acquiring  these  companies. Consequently,  KBC  will 
continue to  explore  further  divestment  possibilities  for  them  in  close 
collaboration with a Divestiture Trustee, as provided for under the  agreement 
with the European Commission."
A divestiture  trustee receives  a  mandate from  the European  Commission  to 
continue the divestment process  beyond the deadlines imposed  on KBC and,  as 
such, make  use of  possible future  market opportunities  to the  benefit  of 
Antwerp  Diamond  Bank   and  KBC  Bank   Deutschland  and  their   respective 
stakeholders. In the meantime, both entities , with KBC's support remain fully
committed to continuing their business activities and serving their  customers 
who can still count on the same high-quality service.

Background information on NLB

When KBC (Bank)  acquired a 34%  minority interest in  NLB Bank (Slovenia)  in 
2002, it officially undertook in the shareholder agreement not to increase its
investment until the end of 2005. In 2006 it became clear that differences  of 
opinion existed between  NLB and  the other major  shareholders regarding  the 
long-term plans for NLB Bank and  KBC's role in its future. Consequently,  KBC 
decided in 2006 to reassess  its investment in the  Slovenian NLB Bank and  to 
limit its responsibility towards NLB to  that of a purely financial  investor. 
KBC did not see itself remaining a  minority shareholder in NLB Bank over  the 
long term, without having sufficient  say in NLB's operational management.  In 
2009, as part  of KBC's strategic  plan agreed with  the European  Commission, 
KBC's stake in NLB was earmarked for divestment.

KBC held  22% in  NLB, while  the  rest of  the shares  are held  directly  or 
indirectly by the Republic  of Slovenia and  several smaller shareholders.  In 
June 2012 the Slovenian  Parliament adopted a decision  by which it  empowered 
the government to find long-term partners for NLB. Since then, the  government 
has proposed several measures, which, once in force, will make it possible  to 
exit faster from  the financial crisis  the Slovenian economy  is facing,  and 
will make investments in the Slovenian banking sector more attractive. As  NLB 
is an important systemic bank in Slovenia, the Republic of Slovenia has strong
interest in controlling  the process  of finding  new long-term  shareholders. 
This led the government to accept the proposal to purchase the NLB shares from
KBC.

NLB is the leading bank in Slovenia and also holds strong retail franchises in
Macedonia and Kosovo.

For further information, please contact:

Wim Allegaert, General Manager, Investor Relations, KBC Group
Tel +32 2 429 40 51 E-mail wim.allegaert@kbc.be

Viviane Huybrecht,  General  Manager, Group  Communications/Spokesperson,  KBC 
Group
Tel +32 2 429 85 45 E-mail pressofficekbc@kbc.be

* This news item contains information that is subject to the transparency
regulations for listed companies.

KBC - NLB

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Source: KBC Groep via Thomson Reuters ONE
HUG#1667452
 
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