KBC sells Life Settlement Portfolio (USA)

(PresseBox) ( Brussels, New York, )
On 10 November 2010, KBC signed an agreement with certain funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG) to sell them the US life settlement portfolio held by KBC Financial Products. The transaction is not material to KBC Group's results and does not impact KBC's Tier-1 ratio.

- KBC Insurance Derivatives is a New York-based specialised business line of KBC Financial Products that stopped originating premium finance loans and acquiring new assets in the life settlements space in September 2008. Premium finance loans provide funds to owners of life insurance policies to pay the premiums on their life insurance policies. The portfolio was earmarked at the end of 2008 for divestment.
- While reducing KBC's risk profile, the transaction has no impact on KBC's Tier-1 ratio and is not material to KBC Group's results.
- Closing of the transaction is subject to US regulatory approval and is expected to be completed in the next months.

Luc Popelier, CEO of KBC Group's Market Activities is pleased with today's transaction:

"The agreement announced today is part of KBC's strategic refocus of its Merchant Banking activities. Within its updated strategy, KBC Merchant Banking will from now on focus on servicing core corporate customers of the Group's home markets in Belgium and Central and Eastern Europe and internationally active corporate customers with a natural link to KBC's home markets."

Not a core activity for KBC

On 18 November 2009, KBC announced its updated strategy of focusing on its core banc-assurance expertise in its home markets (in Belgium and Central and Eastern Europe) and reducing its risk profile and risk-weighted assets. Consequently, the life settlement business is not deemed core to KBC.

In recent months, KBC Financial Products has divested its Japanese Equities business, its US reverse mortgage business, its Asia-focused fund of funds management activities and, recently, its global convertibles and Asian equity derivatives businesses. KBC's exit from the life settlements market has to be seen against the backdrop of KBC's strategic choice to refocus its Merchant Banking business.

KBC Insurance Derivatives

KBC Insurance Derivatives is a New York-based specialised business line of KBC Financial Products focused on the life settlement market. The business was started in 2005 and stopped purchasing policies and originating new premium finance loans in September 2008. KBC Insurance Derivatives currently holds policies and premium finance loans secured by policies with an aggregate face value of approximately 6 bn USD in death benefits.
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