KBC Bank's statement on the results of the exte...

Regulated information* - 23 July 2010 (06.00 p.m. CEST)

KBC  Bank NV  welcomes today's  publication of  the results  of the 2010 EU-wide
stress  testing  exercise  coordinated  by  the  Committee  of  European Banking
Supervisors  (CEBS), in  cooperation with  the European  Central Bank,  the CBFA
(Belgian supervisory authority) and the National Bank of Belgium.

The stress test focused on KBC Bank NV.

KBC  is satisfied that  the outcome of  the stress test  proves that, even under
these   stress  scenarios  the  bank  adequately  meets  the  legal  and  market
requirements  in  terms  of  solvency.   The  fact  that the CEBS benchmark  and
adverse scenarios are challenging ones, adds comfort to the result for KBC.

This  stress test complements the risk  management procedures and regular stress
testing  programmes set up in KBC Bank under the Pillar 2 framework of the Basel
II and CRD[1] requirements.

The  exercise was conducted using the scenarios, methodology and key assumptions
provided by CEBS (see the aggregate report published on the CEBS website[2]). As
a  result  of  the  assumed  shock  under  the  adverse  scenario, the estimated
consolidated  tier-1 capital  ratio would  change to  9.8% in 2011 compared with
10.9% at  the end  of 2009. An  additional sovereign  risk scenario would have a
further  impact of 0.4 percentage points on  the estimated tier-1 capital ratio,
bringing  it to 9.4% at the end of 2011, compared with the regulatory minimum of
4%.

This  last  result suggests  a buffer of  4.6 billion EUR of  the tier-1 capital
against  the  threshold  of  6% of  tier-1  capital  adequacy  ratio  as  agreed
exclusively for the purposes of this exercise. This threshold should by no means
be  interpreted as a  regulatory minimum (the  regulatory minimum for the tier-1
capital ratio is set at 4%), nor as a capital target reflecting the risk profile
of  the institution determined as a result  of the supervisory review process in
Pillar 2 of the CRD.

KBC  Bank has held rigorous  discussions of the results  of the stress test with
the CBFA and the National Bank of Belgium.

Given  that  the  stress  test  was  carried  out  under  a number of key common
simplifying  assumptions  (e.g.  constant  balance  sheet)  the  information  on
benchmark  scenarios is provided  only for comparison  purposes and should in no
way be construed as a forecast.

The  objective of the extended stress testing  exercise is to assess the overall
resilience  of the EU  banking sector and  KBC Bank's ability  to absorb further
possible shocks on credit and market risks, including sovereign risks.

In  the  interpretation  of  the  outcome  of  the exercise, it is imperative to
differentiate  between  the  results  obtained  under  the  different  scenarios
developed  for the  purposes of  the EU-wide  exercise. The  results of both the
benchmark  and adverse scenarios  should not be  considered as representative of
the current situation or possible present capital needs.

A  stress testing exercise does not  provide forecasts of expected outcomes, nor
does  it reflect  in any  way KBC's  own budgets  and forecasts.  It is rather a
"what-if  " analysis,  based on  a number  of plausible  but extreme assumptions
which  are therefore not very likely to  materialise, selected by CEBS, aimed at
supporting  the supervisory  assessment of  the adequacy  of the bank's capital.
Different stresses may produce different outcomes depending on the circumstances
of each institution.


More   information   on  the  scenarios,  methodology,  aggregate  and  detailed
individual  results is available from CEBS[3].  Information can also be obtained
from the website of the CBFA.

--------------------------------------------------------------------------------

[1] Directive EC/2006/48 - Capital Requirements Directive (CRD)

[2] See: 

http://www.c-ebs.org/EU-wide-stress-testing.aspx

[3] See: 

http://www.c-ebs.org/EU-wide-stress-testing.aspx



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



[HUG#1433718]





    KBCstresstest2010ENG: 

http://hugin.info/133947/R/1433718/379618.pdf



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