KBC Receives Final Approval And Closes Acquisition Of Istrobanka, thus Capturing 10% Of High-growth Slovakian Market

KBC Groep (KBC.BR) Regulated information* - 1 July 2008 (after trading hours)

Having already received the necessary approval of the Central Bank of Slovakia and the Anti-Trust Commission for KBC to acquire full ownership (100%) of Istrobanka and Istro Asset Management, BAWAG P.S.K. and KBC closed the sale-purchase of ISTROBANKA today. The acquisition of ISTROBANKA, the tenth largest bank in terms of assets in Slovakia, was announced on 20 March 2008 and the deal valued the bank at 350 million euros, 3.5 times its book value.

KBC was already present in Slovakia through its subsidiary CSOB Bank, and the consolidation of ISTROBANKA and CSOB Bank will create the fourth largest banking operation in Slovakia, with a market share of approximately 10%.

In the coming months, both ISTROBANKA and CSOB Bank will fully concentrate on preparations for the introduction of the euro and on the merger of both banks (second half of 2009).

Commenting on the deal, André Bergen, KBC Group CEO, had this to say: 'Together, CSOB and ISTROBANKA will form the fourth largest banking operation in the country. KBC has now strengthened its position in the attractive and increasingly consolidating Slovakian market, one which offers enormous potential for the further penetration of banking and insurance products. The future merger of both banks will offer considerable cross-selling potential in both retail and corporate banking and lead to economies of scale, thus creating significant value and benefits for shareholders, employees and customers.'

Daniel Kollar, CEO of CSOB Bank and Country Manager of CSOB Group in Slovakia added: 'ISTROBANKA is a quality bank, with a professional management team, highly experienced and dedicated staff, and a clear commercial strategy and business plan that focuses on organic growth. Since the announcement of the acquisition a few months ago, we have been working to carefully and efficiently prepare for the merger, which will create a single legal entity and uniform processes, systems and services. In the months to come, we will work together to strengthen and consolidate our fourth place in the Slovakian market. Our customers will be able in the near future to capitalise on this close co-operation, which will bring them new benefits and opportunities mainly in the area of bancassurance.'

David Roberts, CEO of BAWAG P.S.K. said: 'We are very pleased about KBC's investment in ISTROBANKA, which represents the best avenue for ISTROBANKA's future growth and development. This transaction brings material benefit to the customers, employees and shareholders of ISTROBANKA. KBC is a committed, long-term owner, who will bring real value to ISTROBANKA, whilst BAWAG P.S.K. will re-invest the sale proceeds in supporting it's ambitious growth agenda inside and outside of Austria.'

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



LINK: http://hugin.info/133947/R/1232819/262275.pdf

KBC Groep

http://www.kbc.com

ISIN: BE0003565737

Stock Identifier: XBRU.KBC

US: KBC.BR