KBC Groupe NV

Capital/Financing Update • Feb 19, 2019

Brussels, 18 February 2019 – 6 p.m.

KBC discloses new ECB capital requirements

KBC's capital remains well above the minimum requirements

KBC has been informed by the European Central Bank (ECB) of its new minimum capital requirements, which bring the combined CET1 requirement for KBC (under the Danish Compromise) to 10.7%.

At the close of the fourth quarter of 2018, KBC's CET1 ratio came to 16%, well above the new CET1 requirement.

Following the Supervisory Review and Evaluation Process (SREP) performed for 2018, the ECB has formally notified KBC of its decision to maintain

• the pillar 2 requirement (P2R) at 1.75% of CET1
• the pillar 2 guidance (P2G) at 1.0% of CET1

The capital requirement for the KBC group is determined not only by the ECB, but also by the decisions taken by the various local competent authorities in KBC's core markets, namely to:

• increase the countercyclical capital buffer in the Czech Republic from 1.25% to 1.50% effective from 1 July 2019
• increase the countercyclical capital buffer in Slovakia from 1.25% to 1.50% effective from 1 August 2019
• introduce a countercyclical capital buffer in Bulgaria (0.5% in 2019 and 0.75% in 2020)
• introduce a countercyclical capital buffer in Ireland (1.0% effective from 5 July 2019)

That corresponds to an additional CET1 requirement of 0.45% at KBC group level (up from 0.35%).

The National Bank of Belgium had already announced its capital buffers for Belgian systemic banks last year. For KBC, the capital buffer requirement is 1.5%, while the capital conservation buffer is 2.50% as from 2019. These buffers are held on top of the minimum CET1 requirement of 4.5% under Pillar 1.

For KBC, this brings the overall CET1 requirement (under the Danish Compromise) to 10.7% (10.6% last year), with an additional Pillar 2 guidance of 1%. KBC clearly exceeds this requirement, as illustrated by its CET1 ratio of 16% at the close of the fourth quarter of 2018.

Johan Thijs, KBC Group CEO, had this to say: 'The ECB's decision reaffirms KBC's low risk profile and its resilience to adverse economic conditions. Our capital position is an extremely solid one and that sends out a reassuring signal to all stakeholders placing their trust in us.

KBC will continue to pursue a policy of maintaining a dynamic buffer above the legally required minimum. That reflects a number of factors, including our attitude towards potentially adverse economic conditions, any new capital requirements and our position relative to our peers. We've set our 'own capital target' at 14% of CET1 and want to keep a flexible buffer of up to 2% of CET1 for potential mergers and acquisitions that would strengthen our position in our core markets. The aggregate figure of 16% of CET1 represents the 'reference capital position'.

We will also continue to concentrate on our sound fundamentals of having a dynamic client-driven bankinsurance business model, a healthy risk profile, a robust liquidity position supported by a very solid and loyal customer deposit base in our core markets, and a comfortable solvency position that enables us to continue to increase lending to our clients and actively support the communities and economies where we operate.'

More details on the composition of the new capital requirements can be found in the table attached to this press release and at www.kbc.com.

For more information, please contact:

Kurt De Baenst, General Manager, Investor Relations, KBC Group Tel.: +32 2 429 35 73 – E-mail: kurt.debaenst@kbc.be

Viviane Huybrecht, General Manager of Corporate Communication/KBC Group Spokesperson Tel.: + 32 2 429 85 45 – E-mail: pressofficekbc@kbc.be

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

KBC Group NV Havenlaan 2 – 1080 Brussels Viviane Huybrecht General Manager Corporate Communication /Spokesperson Tel. +32 2 429 85 45

Press Office Tel. +32 2 429 65 01 Stef Leunens Tel. +32 2 429 29 15 Ilse De Muyer Tel. +32 2 429 32 88 Pieter Kussé E-mail: pressofficekbc@kbc.be

KBC press releases are available at www.kbc.com or can be obtained by sending an e-mail to pressofficekbc@kbc.be

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Fully loaded figures		Previous targets	NEW targets
Pillar 1 minimum requirement (P1 min)	CET1	4,50%	4,50%
	AT1	1,50%	1,50%
	T2	2,00%	2,00%
Pillar 2 requirement (P2R)	CET1	1,75%	1,75%
Total SREP Capital Requirement (TSCR)	CET1	6,25%	6,25%
	Tier 1	7,75%	7,75%
	Total capital	9,75%	9,75%
Combined Buffer Requirement (CBR)
Conservation buffer	CET1	2,50%	2,50%
O-SII buffer	CET1	1,50%	1,50%
Countercyclical buffer	CET1	0,35%	0,45%
Overall capital requirement (OCR) = MDA threshold	CET1	10,60%	10,70%
	Tier 1	12,10%	12,20%
	Total capital	14,10%	14,20%
Pillar 2 Guidance (P2G)	CET1	1,00%	1,00%
OCR + P2G	CET1	11,60%	11,70%