KBC Group: KBC to repay first instalment of state aid received from Flanders today, still ahead of schedule following successful transfer of a portion of shareholder loans
(Thomson Reuters ONE) -
Press Release KBC
Outside trading hours - regulated information*
Brussels, 3 July 2013 (before trading hours)
Monday morning before trading began, KBC announced that it would not repay the
first instalment of the aid received from the Flemish Regional Government in the
first half of this year, but in the second half, because it was still
investigating the transfer of a portion of the shareholder loans granted in the
past to KBC Ancora and/or Cera. This was because the National Bank of Belgium
would only approve the accelerated repayment of part of the aid from the Flemish
Regional Government provided a portion of the above loans were transferred.
Yesterday, KBC succeeded in reaching agreement on the transfer of 0.3 billion
euros' worth of loans to KBC Ancora to another international financial
institution. In doing so, KBC has met the condition recently set by the National
Bank. The transfer will boost KBC's capital position by a further 0.3 billion
euros and will generate added value for its shareholders.
In practice, this also means that KBC will repay 1.17 billion euros of state aid
plus the penalty of 0.58 billion euros - in total, 1.75 billion euros - to the
Flemish Regional Government today, still six months in advance of the deadline
agreed with the European Commission.
KBC to repay 1.17 billion euros plus penalty of 50% (0.58 billion euros) to
Flemish Regional Government today
On 10 December 2012, KBC announced its intention to repay 1.17 billion euros of
state aid (plus the penalty of 50%, which amounts to 0.58 billion euros)
received from the Flemish Regional Government in the first half of 2013, in
advance of the deadline of end-2013 agreed with the European Commission. This
repayment was subject to the customary approval of the National Bank of Belgium,
which has granted its approval.
Johan Thijs, KBC Group CEO: 'We intended to repay in the first half of this
year, and ahead of schedule, a substantial portion of the aid received from the
Flemish Regional Government. And we have succeeded in doing this, albeit three
days late. With a common equity ratio of 12% (at end-1Q13) under full and early
application of the new Basel III capital requirements (i.e. fully loaded Basel
III), our solid capital position, together with meeting the National Bank's
additional condition regarding the shareholder loans, has made this possible.
I would like to take this opportunity to express our deep gratitude and
appreciation to the Flemish Regional Government for its support at a crucial
moment during the worst financial crisis in decades. After years of working
hard, and with the loyal support of our staff, clients and shareholders, we are
now in a position to fulfil the commitments we entered into. We are happy to be
able to announce today that we will fulfil our commitment to the Flemish
Regional Government by repaying 1.17 billion euros in principal, plus a penalty
of 0.58 billion euros, six months ahead of schedule. In addition, we reconfirm
our undertaking, as agreed with the European Commission, to repay the
outstanding balance of 2.33 billion euros to the Flemish Regional Government in
seven equal instalments of 0.33 billion euros (plus penalty) to be paid between
2014 and 2020. However, we may opt to accelerate these repayments, too, if our
capital position so allows and the National Bank grants its approval.
Despite the persistent macroeconomic uncertainty and volatile market conditions,
our core activities and bank-insurance model have proved throughout the crisis
how solid they are. KBC is now one of the best-capitalised and most liquid banks
in Europe. Repaying a large portion of the aid received from the Flemish
Regional Government will allow us to focus fully on our core activities, on
implementing our new strategy and on achieving operational excellence. Our
client-focused and integrated bank-insurance model in Belgium, the Czech
Republic, Slovakia, Hungary and Bulgaria, and our strong market positions form
the foundations for profitability and growth in the interest of our clients,
shareholders and staff and the communities we serve.'
In addition to the full repayment to the Belgian Federal Government at the end
of 2012, today's repayment brings the total in repayments, coupon payments and
fees for the CDO guarantee to 8.9 billion euros. And by the time KBC has repaid
all the aid it received, the total amount in repayments, coupon payments and
fees for the CDO guarantee will rise to more than 13 billion euros, compared to
an amount of 7 billion euros in principal borrowed in 2008 and 2009 from the two
governments.
KBC transfers a portion of the loans granted to shareholder, KBC Ancora
Under Basel III capital rules (fully loaded), shareholder loans must be deducted
in full from the bank's equity. The loans KBC granted to KBC Ancora in 2007 fall
under this definition.
KBC has concluded an agreement to transfer 0.3 million euros' worth of the loans
to KBC Ancora to another international financial institution. As part of the
agreement, KBC has taken over a limited amount in interest rate swaps on the
Belgian governments from the bank involved at market rates.
The transfer of the KBC Ancora loans will create added value for shareholders
and positively impact KBC's capital position (adding 0.3% to the group's common
equity ratio, which came to 12% at the end of the first quarter of 2013 (fully
loaded Basel III)).
Contact details
Wim Allegaert, General Manager, Investor Relations, KBC Group
Tel + 32 2 429 40 51 E-mail wim.allegaert(at)kbc.be
Viviane Huybrecht, General Manager, Corporate Communication & Company
Spokesperson, KBC Group
Tel + 32 2 429 85 45 E-mail pressofficekbc(at)kbc.be
* This press release contains information provided in compliance with European
transparency legislation for listed companies
KBC Group NV Havenlaan 2 - 1080 Brussels
COM_ECL_repayment Flanders_1_ENG:
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Source: KBC Groep via Thomson Reuters ONE
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