Joint Press Release
                Outside trading hours - Regulated information*

Prague, Brussels, 15 April 2019 – 8 a.m. CEST

ČSOB to become the sole owner of Czech building savings bank ČMSS after acquiring the 45% stake held by Bausparkasse Schwäbisch Hall

This morning, ČSOB, the Czech division of KBC Group, and Germany’s Bausparkasse Schwäbisch Hall (BSH) reached agreement for ČSOB to acquire BSH’s 45% stake in the Czech building savings bank Českomoravská stavební spořitelna (ČMSS) for a total consideration of 240 million euros, representing a 1.54 multiple of the 2018 standalone net book value and a 9.20 implied multiple of 2018 net profit including discounted 2024 synergies.  Parties have agreed that dividends from 2018 and 2019 profits fully accrue to ČSOB.

The transaction will have an impact of approximately - 0.30 percentage points on the KBC Group’s strong CET1 ratio - which stood at 16% (fully loaded, Danish compromise) at the end of 2018 and as a result, it will lower KBC Group’s 2% M&A buffer to 1.70%. Furthermore, the revaluation of KBCs 55% stake in ČMSS (in conformity with IFRS 3) will lead to a one-off gain for KBC on the date of the closing of the transaction, estimated at  approximately 80 million EUR .

As a result of this transaction, ČSOB will hold 100% of and becomes the only shareholder of ČMSS and consolidates its position as the largest provider of financial solutions for housing purposes in the Czech Republic. The agreement is still subject to anti-trust approvals and is expected to close before the end of the second quarter of 2019.

Johan Thijs, KBC Group CEO welcomed the transaction as follows: “I am very pleased with this transaction, which confirms our position as a strong market leader in the Czech Republic. Leveraging our market experience and our product and service offering together with ČMSS to accommodate our clients’ housing needs will help us to become the reference on the Czech housing market. This acquisition marks our ambition to grow in our core markets and forms an excellent business opportunity in terms of strengthening our Czech retail franchise. At the same time, it is fully in line with our strategy to focus on our strong fundamentals: a healthy client-driven bank-insurance business model, a strong risk profile, a robust liquidity position supported by a very solid and loyal client 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 in which we operate.”

Full press release attached.