Sale of KBL epb to Hinduja Group will not go th...

Regulated information* - 15 march 2011 (before trading hours)

                   KBC to examine various options for KBL epb
                               in the weeks ahead


On 21 May 2010, the KBC group announced that it had reached an agreement with
the Hinduja Group for the sale of its private banking subsidiary, KBL European
Private Bankers (KBL epb). As is customary, the Hinduja Group had submitted the
deal in recent months for approval to the Luxembourg regulator (the CSSF) and
the regulators in the nine other European countries where KBL epb operates.
Needless to say, KBC was not itself party to that approval process.
The CSSF yesterday confirmed that it was stopping its evaluation of the
acquisition, after concluding that its decision would have been to object to it.
The CSSF reached this decision based on application of the criteria set out in
the law governing the financial sector and after consulting with the other
competent authorities.
In practice, this means that the sale of KBL epb to the Hinduja Group will not
go ahead.

KBC takes note of this decision. Over the coming weeks, and in relation to
implementing its strategic plan, the group will thoroughly assess the various
options so that, given current market conditions, it can take the best decision
regarding the future of KBL epb.


Jan Vanhevel, KBC Group CEO: 'The Hinduja Group was selected last year based on
various criteria such as the price it offered, its industrial project and future
plans for KBL epb, the continued focus on private banking it was able to
guarantee both the clients and staff of KBL epb. To our surprise and regret, the
Hinduja group was unable to obtain approval for this deal from the regulators in
the ten European countries in which KBL epb is active. Although, naturally, we
were and are unable to do anything about the situation, there is no denying that
this is disappointing for us. However, it does not jeopardise implementation of
our strategic plan, because the European Commission has given us enough
flexibility to enable us to carry out our divestments under the best possible
conditions. We will, therefore, thoroughly assess the various options for KBL
epb over the coming weeks so that, given the current market conditions, we can
take the best decision regarding the future of KBL epb, and thus provide
security for its staff and clients. It is also most comforting to know that KBL
epb is in good hands. Despite the challenging market conditions, KBL epb's
management - under the leadership of CEO Jacques Peters - has continued rolling
out its efficiency improvement programme in various countries, strengthened its
balance sheet and reduced its cost base, and hence enhanced the overall quality
of the assets. All of which has prepared KBL epb for the challenges ahead.'

Jacques Peters, CEO of KBL epb: 'Of course we are disappointed that it had to
end this way. However, we are very pleased to note that, over the past months,
our clients and staff have continued to believe and have confidence in our
customer-focused model and forward-looking strategy. Moreover, we have succeeded
in attracting many new clients and private bankers in the various countries
where we are present. Despite the persistently difficult market conditions in
2010, our assets under management have increased, fee and commission income has
risen further and expenses have fallen. Consequently, KBL epb remains in an
excellent position to respond to the expanding market for private banking. Going
forward, our clients can continue to rely on a top-quality service from a highly
motivated and professional staff. We are, therefore, confident that, together
with the KBC group, we will take the right decision to safeguard our future."


Contacts
Wim Allegaert, General Manager, Investor Relations, KBC
Tel [phone]  [e-mail]
Viviane Huybrecht, General Manager, Group Communication & Spokesperson for KBC
Group NV
Tel [phone]  [e-mail]

Note for the editor:
At the end of 2009, KBC refocused its strategy and now concentrates on its core
activity as a bancassurer in its home markets in Belgium, the Czech Republic,
Slovakia, Hungary, Poland and Bulgaria, as well as on reducing its risk profile.
As part of this exercise, the group decided to divest certain activities,
including those of its European Private Banking Business Unit, which operated
with commercial autonomy and had lower-than-average synergies with the group's
bancassurance activities.

KBL epb boasts some of the strongest brands in leading European markets:
   Theodoor Gilissen Bankiers in the Netherlands
   Merck Finck & Co. in Germany
   Puilaetco Dewaay in Belgium
   Brown Shipley & Co in the UK
   KBLepb Luxembourg
   Puilaetco Dewaay Luxembourg
   KBLepb Richelieu Banque Privée in France
   KBLepb Switzerland
   KBLepb Monaco
   KBLepb has also started activities in Spain and Poland
   The life insurance subsidiary, VITIS Life, in Luxembourg

At year-end 2010, KBLepb had total assets under management of 47 billion euros.
The group employed  2 522 people, 418 of whom are private bankers.

KBC  also offers  private banking  services in  Belgium and  Central and Eastern
Europe under the KBC brand name. In Flanders and Brussels, KBC has more than 19
private  banking branches,  and KBC's  subsidiary, CBC,  caters for  its private
banking clientele through 7 private banking branches in Brussels and Wallonia.


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




KBLepb_2011_ENG: 


http://hugin.info/133947/R/1496839/432617.pdf




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