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2018 EU-wide Transparency Exercise Summary for KBC Group NV

Core Content

The document presents the results of the 2018 EU-wide Transparency Exercise for KBC Group NV, including capital adequacy, risk exposure, and profit and loss (P&L) data. It outlines the bank's capital structure and risk metrics according to regulatory frameworks, such as the Capital Requirements Regulation (CRR), and provides a breakdown of various capital components and risk exposures across different categories.

Key Financial Metrics

Capital Structure

• Own Funds (Transitional period):

  • As of 31/12/2017: 18,728 mln EUR
  • As of 30/06/2018: 19,336 mln EUR

• CET1 Capital:

  • As of 31/12/2017: 15,134 mln EUR
  • As of 30/06/2018: 14,715 mln EUR
  • CET1 Capital Fully loaded:
    • As of 31/12/2017: 15,107 mln EUR
    • As of 30/06/2018: 14,715 mln EUR

• Additional Tier 1 Capital:

  • As of 31/12/2017: 1,418 mln EUR
  • As of 30/06/2018: 2,400 mln EUR

• Tier 1 Capital:

  • As of 31/12/2017: 16,552 mln EUR
  • As of 30/06/2018: 17,115 mln EUR

• Tier 2 Capital:

  • As of 31/12/2017: 2,176 mln EUR
  • As of 30/06/2018: 2,221 mln EUR

Capital Ratios

• Common Equity Tier 1 (CET1) Ratio (Transitional period):

  • As of 31/12/2017: 16.46%
  • As of 30/06/2018: 15.83%

• Tier 1 Capital Ratio (Transitional period):

  • As of 31/12/2017: 18.00%
  • As of 30/06/2018: 18.42%

• Total Capital Ratio (Transitional period):

  • As of 31/12/2017: 20.36%
  • As of 30/06/2018: 20.81%

Risk Exposure Amounts

• Total Risk Exposure Amount (As of 31/12/2017): 91,971 mln EUR
• Total Risk Exposure Amount (As of 30/06/2018): 92,931 mln EUR

Breakdown of Risk Exposure Amounts

• Credit Risk:

  • As of 31/12/2017: 75,348 mln EUR
  • As of 30/06/2018: 76,044 mln EUR

• Securitisation and Re-securitisation in Banking Book:

  • As of 31/12/2017: 329 mln EUR
  • As of 30/06/2018: 148 mln EUR

• Contributions to the Default Fund of a CCP:

  • As of 31/12/2017: 199 mln EUR
  • As of 30/06/2018: 158 mln EUR

• Market Risk:

  • Traded Debt Instruments: 416 mln EUR (31/12/2017) to 350 mln EUR (30/06/2018)
  • Equities: 69 mln EUR (31/12/2017) to 87 mln EUR (30/06/2018)
  • Foreign Exchange Risk: 117 mln EUR (31/12/2017) to 124 mln EUR (30/06/2018)
  • Commodities Risk: 1 mln EUR (31/12/2017) to 0 mln EUR (30/06/2018)

Profit and Loss (P&L)

• Total Operating Income, Net:

  • As of 31/12/2017: 6,732 mln EUR
  • As of 30/06/2018: 3,179 mln EUR

• Profit or (Loss) Before Tax from Continuing Operations:

  • As of 31/12/2017: 3,382 mln EUR
  • As of 30/06/2018: 1,260 mln EUR

• Profit or (Loss) After Tax from Continuing Operations:

  • As of 31/12/2017: 2,476 mln EUR
  • As of 30/06/2018: 998 mln EUR

• Profit or (Loss) for the Year:

  • As of 31/12/2017: 2,476 mln EUR
  • As of 30/06/2018: 998 mln EUR

Capital Adequacy and Leverage Ratio

• Leverage Ratio:
  • Using transitional Tier 1 capital: 6.1% (31/12/2017) to 6.0% (30/06/2018)
  • Using fully phased-in Tier 1 capital: 6.1% (31/12/2017) to 6.0% (30/06/2018)

Capital Components and Deductions

• CET1 Capital Deductions:

  • Intangible assets (including goodwill): -1,080 mln EUR (31/12/2017) to -1,102 mln EUR (30/06/2018)
  • TFA that rely on future profitability: -672 mln EUR (both periods)
  • IRB shortfall of credit risk adjustments: -265 mln EUR (31/12/2017) to -89 mln EUR (30/06/2018)
  • Other deductions: 0 mln EUR (both periods)

• Additional Tier 1 Capital Deductions:

  • Excess deduction from T2 items over T2 capital: 0 mln EUR (both periods)
  • Other deductions: 0 mln EUR (both periods)

• Tier 2 Capital Deductions:

  • Other Tier 2 capital components and deductions: -184 mln EUR (31/12/2017) to -140 mln EUR (30/06/2018)
  • Tier 2 transitional adjustments: -26 mln EUR (31/12/2017) to 0 mln EUR (30/06/2018)

Key Regulatory References

• CET1 Capital: Articles 4(118) and 72 of CRR
• Additional Tier 1 Capital: Article 61 of CRR
• Tier 2 Capital: Article 71 of CRR
• Leverage Ratio: Article 429 of CRR and Delegated Regulation (EU) 2015/62
• Risk Exposure Amounts: Articles 8(3), 95, 96, and 98 of CRR

Summary of Capital Elements and Adjustments

• Transitional adjustments to CET1:

  • Total: 27 mln EUR (31/12/2017) to 0 mln EUR (30/06/2018)
  • Other transitional adjustments: 27 mln EUR (31/12/2017) to 0 mln EUR (30/06/2018)

• CET1 Capital Elements:

  • Capital instruments eligible as CET1: 6,828 mln EUR (both periods)
  • Retained earnings: 9,779 mln EUR (31/12/2017) to 9,710 mln EUR (30/06/2018)
  • Accumulated other comprehensive income: -696 mln EUR (31/12/2017) to -1,162 mln EUR (30/06/2018)
  • Adjustments to CET1 due to prudential fibers: 1,214 mln EUR (31/12/2017) to 1,234 mln EUR (30/06/2018)

Risk Exposure Categories

• Credit Risk:

  • Standardised Approach:
    • Total: 41,328 mln EUR (31/12/2017) to 33,813 mln EUR (30/06/2018)
    • Corporates: 2,966 mln EUR (31/12/2017) to 1,044 mln EUR (30/06/2018)
    • Retail: 2,234 mln EUR (31/12/2017) to 2,313 mln EUR (30/06/2018)
    • Exposures in default: 773 mln EUR (31/12/2017) to 652 mln EUR (30/06/2018)

• Market Risk:

  • Total: 416 mln EUR (31/12/2017) to 350 mln EUR (30/06/2018)

• Other Risk Exposure Amounts:

  • As of 31/12/2017: 1,716 mln EUR
  • As of 30/06/2018: 2,345 mln EUR

Conclusion

The 2018 EU-wide Transparency Exercise highlights KBC Group NV's capital adequacy and risk exposure under various regulatory frameworks. The bank's CET1 capital slightly decreased from 15,134 mln EUR to 14,715 mln EUR, while Tier 1 and Tier 2 capital increased. The leverage ratio remained stable, and the total risk exposure amount increased slightly from 91,971 mln EUR to 92,931 mln EUR. The data reflects the bank's compliance with regulatory standards and provides insight into its financial stability and risk management practices.