KBC acquires full ownership of Istrobanka, thus...

Regulated information * - 20 March 2008 (after trading hours)

Brussels, Bratislava  -  KBC and  BAWAG  P.S.K., the  shareholder  of
Istrobanka, today reached agreement for KBC to acquire full ownership
of Istrobanka, the 10th largest bank in terms of assets in Slovakia.

The deal values the bank at  ¤350 million, 3.5 times its book  value.
KBC is already present in  Slovakia through its subsidiary CSOB,  and
the combination will result in  the 4th largest banking operation  in
Slovakia, with a market share of approximately 10%.

The deal is  subject to regulatory  approval by the  Central Bank  of
Slovakia and the Anti-Trust  Commission. KBC expects  the deal to  be
closed during the third quarter of 2008 at the latest.

André  Bergen,  KBC  Group   CEO,  commented:  'The  acquisition   of
Istrobanka  constitutes  a  logical  and  important  step  in   KBC's
expansion in Central and Eastern Europe, which started a decade  ago.
KBC has been present in Slovakia since 1999, when it became  majority
shareholder of  CSOB. The  combination of  CSOB and  Istrobanka  will
create the 4th largest banking operation in the country, allowing KBC
to  strengthen  its  position  in  the  attractive  but  increasingly
consolidating Slovakian  market, which  offers significant  potential
for the  further  penetration  of  banking  and  insurance  products.
Istrobanka will allow KBC to unlock important cross-selling potential
in both  retail and  corporate banking  and to  realise economies  of
scale, thus creating significant shareholder value.'

Daniel Kollar,  CEO of  CSOB and  Country manager  of CSOB  Group  in
Slovakia welcomes today's agreement : 'We look forward to cooperating
closely with the  new colleagues  at Istrobanka.  The acquisition  of
Istrobanka will allow  KBC to substantially  strengthen and  solidify
its current position on the Slovak market and will immediately  boost
CSOB's market  share in  total  lending from  7.6%  to 10.5%  and  in
deposits from 6.5% to 8.5%.'

Jan Vanhevel, CEO of KBC's  Central and Eastern European and  Russian
operations added  "KBC  will also be able  to share its know-how  and
extensive experience in the field  of asset management and  insurance
and  implement   its  successful   bancassurance  concept.   We   are
consequently convinced that both the  employees and the customers  of
CSOB and Istrobanka will benefit significantly from close cooperation
and a future merger between the two companies.'

Volker Pichler, CEO of  Istrobanka, added :  'The management team  of
Istrobanka is  extremely pleased  and  looks forward  to  cooperating
closely with CSOB,  especially given their  commitment to  supporting
the expansion of  our banking and  insurance business and  increasing
the focus on retail banking, both  in terms of finance and  know-how.
We are convinced  that both the  employees and the  customers of  the
bank will benefit significantly  from the involvement  of one of  the
leading bancasssurance groups in Europe.'

David Roberts, CEO of BAWAG P.S.K.,  said : 'BAWAG P.S.K. AG  decided
last year to concentrate on its Austrian core business and to  follow
a  product  lead  approach  in  its  foreign  activities.  Thus   the
divestiture of its subsidiary in the Slovak Republic represented  the
best avenue  for Istrobanka's  future growth  and development.  BAWAG
P.S.K. AG are very pleased about KBC's investment in Istrobanka. This
will give Istrobanka  access to one  of the leading  networks in  the
region and  will therefore  bring new  opportunities for  growth  and
development to Istrobanka's customers and employees.'

Slovakia  :   strong   macroeconomic  fundamentals   and   increasing
consolidation in the banking market

KBC is  convinced  that Slovakia's  macroeconomic  fundamentals  will
remain strong. In  2007, Slovak  GDP grew by  13.1%, amply  exceeding
forecasts. Growth is expected to remain  strong in 2008 and 2009  and
will figure among  the highest  in the Central  and Eastern  European
region. Slovakia's expected adoption  of the euro  on 1 January  2009
will further enhance the country's economic convergence.
Slovakian  banks  are  primarily  owned  by  foreign,   international
financial institutions, and the sector is characterised by increasing
concentration, with the top 5 banks holding approximately 70% of  the
market in loans and deposits.

KBC's presence in Slovakia (www.csob.sk)

In 1999, KBC became the majority shareholder of CSOB. The CSOB  group
in Slovakia  comprises  the  following  companies:  CSOB  Bank,  CSOB
Insurance, CSOB  Asset  Management,  CSOB  Pension  Funds  Management
Company, CSOB Leasing, CSOB Building Society and CSOB Factoring.
CSOB in Slovakia, which had been a branch of the Czech CSOB Bank  for
42 years,  became an  independent  legal entity  on 1  January  2008.
Currently, it is one  of the largest banks  (top 4) operating in  the
Slovak market.
The bank serves its retail, SME and private banking clients through a
network of over 100  branches. CSOB is a  universal bank, focused  on
home finance  and savings.  The bank  offers the  most  comprehensive
range of financial services on  the market, using the successful  KBC
distribution model  for  bancassurance and  asset  management.  Since
2004, it has experienced six-fold growth in mortgages and doubled the
size of its mutual fund sales.

Istrobanka : a player offering  a platform for expansion and  synergy
(www.istrobanka.sk)

Istrobanka was established in  1992 and acquired  by BAWAG P.S.K.  in
2002. The bank is the eighth largest lender in Slovakia, holding 2.2%
of the deposit market and 3.2%  of the loan market. Istrobanka,  with
750 employees, offers  retail and SME/corporate  banking services  to
around 125 000 customers across the  country through a network of  51
fully fledged  branches and  9 bank  'shops'. Istrobanka  also has  a
subsidiary offering asset management  services. Istrobanka had  total
assets of around  ¤1.22 billion and  ¤100.5 million in  shareholders'
equity as at the end of 2007.

Lehman Brothers acted as the sell-side advisers, while buy-side
advisors included JP Morgan and Patria, the Czech subsidiary of KBC
Securities.


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