KBC Bank Capital Update - EU Wide Stress Test Results

Regulated information* - 15 July 2011 (After trading hours)
 
KBC  Bank was subject to the 2011 EU-wide  stress test conducted by the European
Banking  Authority (EBA), in cooperation with  the National Bank of Belgium, the
European  Central  Bank  (ECB),  the  European  Commission (EC) and the European
Systemic Risk Board (ESRB).
 
KBC Bank notes the announcements made today by the EBA and the National Bank of
Belgium on the EU-wide stress test and fully acknowledges the outcomes of this
exercise.
 
The EU-wide stress test, carried out across 91 banks covering over 65% of the EU
banking system total assets, seeks to assess the resilience of European banks to
severe shocks and their specific solvency to hypothetical stress events under
certain restrictive conditions.
 
The assumptions and methodology were established to assess banks' capital
adequacy against a 5% Core Tier 1 capital benchmark  and are intended to restore
confidence in the resilience of the banks tested.  The adverse stress test
scenario was set by the ECB and covers a two-year time horizon (2011-2012). The
stress test has been carried out using a static balance sheet assumption as at
December 2010. The stress test does not take into account future business
strategies and management actions and is not a forecast of KBC Bank's profits.
 
As a result of the assumed shock, the estimated consolidated Core Tier 1 capital
ratio of KBC Bank would change to 10,0% under the adverse scenario in 2012
compared to 10,5% as of end of 2010. This result incorporates the effects of the
mandatory restructuring plans agreed with the EU Commission before 31 December
2010.
 
Details on the results observed for KBC Bank:
 
The EU-wide stress test requires that the results and weaknesses identified,
which will be disclosed to the market, are acted on to improve the resilience of
the financial system. Following completion of the EU-wide stress test, the
results determine that KBC Bank meets the capital benchmark set out for the
purpose of the stress test. The bank will continue to ensure that appropriate
capital levels are maintained.
 
Jan Vanhevel, KBC Group CEO: 'KBC is satisfied that the outcome of the stress
tests proves, once again, that under these stress scenarios, the bank adequately
meets the solvency requirements. The fact that the EBA baseline and adverse
scenarios are challenging ones - even more challenging than last year -makes
KBC's result even more satisfying. This should also offer comfort to all
stakeholders placing their trust in our institution.'
 
* This news item contains information that is subject to the transparency
regulations for listed companies.
 
Stresstest2011_ENG: 
http://hugin.info/133947/R/1531060/466010.pdf
 
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Source: KBC Groep via Thomson Reuters ONE
 
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