KBC informs about impact on earnings of the dow...

Regulated information* - 29 December 2008 (8.00 a.m. CET)

Amid the deteriorating  outlook for  the global  economy, the  rating
agency, Moody's  Investor  Service  has further  downgraded  a  large
number of collateralised debt  obligations (CDOs), including  several
held by KBC. The negative impact  of the downgrading on the  modelled
('mark to  model') value  of  KBC's CDO  investments is  0.3  billion
euros, a  decline  which will  be  recorded  in full  in  the  income
statement (unlike  several other  financial institutions  which  mark
down the value against shareholders' equity in the balance sheet).

After having applied  the new  rating assumptions to  the entire  CDO
portfolio (including securities that  were not downgraded) and  while
maintaining the policy of bringing the value of all securities with a
credit rating below Ba3 to zero, the adverse impact on value for  KBC
came to  0.6 billion  euros. Another  0.3 billion  CDO mark-down  was
linked to the increased market value of financial guarantees (written
by monoline  insurers) on  the back  of the  rating downgrades.  This
brings the combined  pre-tax impact  to 0.9  billion euros.  Together
with the absence  of further  tax credits in  the US,  the impact  on
KBC's net earnings will be of the same magnitude.

The most  recent  credit  rating review  follows  series  of  reviews
earlier this  quarter,  the adverse  financial  impact of  which  had
already been anticipated in the third quarter.

Since the start of the financial  market crisis, KBC has opted to  be
highly transparent about the sensitivity  of its earnings to  changes
in the value of investments.

KBC will publish its fourth-quarter results on 12 February 2009 at  7
a.m.


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


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