Public statement relating to Settlement Agreement between the Central Bank of Ireland and KBC Bank Ireland Plc

• Date: 06 October 2016

Settlement Agreement between the Central Bank of Ireland

and

KBC Bank Ireland Plc

KBC Bank Ireland Plc fined €1,400,000 by the Central Bank of Ireland for breaches of its Code of

Practice on Lending to Related Parties

The Central Bank of Ireland (the ‘Central Bank’) has fined KBC Bank Ireland Plc (‘KBC‘ or the ’Firm‘)

€1,400,000 and reprimanded it for breaches of the Code of Practice on Lending to Related Parties

2010, and the Code of Practice on Lending to Related Parties 2013 (collectively ’the Code‘). The

breaches have been admitted by the Firm. This is the first enforcement action brought by the

Central Bank against a credit institution for breaches of the Code.

The Central Bank introduced the Code in 2011 to guard against abuses in lending to related parties

and as part of the Central Bank’s regulatory approach following the financial crisis. Under the

Code, relevant firms must obtain the prior approval of their Board or a subcommittee thereof,

before they can enter into, or vary loan transactions with related and/or connected parties, which

include directors, senior managers, significant shareholders of the firm and spouses or domestic

partners.

The breaches of the Code occurred from 26 September 2012 to 23 February 2016, during which

time the Firm failed, on eighteen separate occasions to: