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18 Apr 2007

ABN In Exploratory Talks With Shareholders

Last week Dutch bank and activist hedge fund manager ABN AMRO received a letter from Royal Bank of Scotland, Banco Santander and Fortis in which they invited ABN AMRO to start exploratory talks regarding their intentions, the Dutch Decree on the Supervision of Securities Trade 1995 makes these kinds of requests possible.

The bank agreed to the request for a meeting and has invited all signatories to a meeting in Amsterdam early next week to seek clarification of their intentions and interests.

ABN AMRO and Barclays also announced today, regarding their possible merger/takeover, that they have extended the exclusivity period of their talks to the end of Friday 20 April 2007. ABN AMRO and Barclays are in talks regarding a potential combination of the two organizations that the statement says, "would create value for both sets of shareholders."

The bank also said in the statement, "The discussions, which seek to incorporate the broad objectives set out on 20 March 2007, are progressing, but there can be no certainty that they will lead to a transaction or the form it will take." The two banking groups have been in merger talks since Barclays confirmed it was in "exclusive preliminary discussions" with ABN on March 20.

Netherlands-based ABN AMRO is an international bank with total assets of 899.3 billion euros ($1.2 trillion). It's hedge fund arm, ABN AMRO Asset Management has over 173 billion euros ($235 billion) in assets under management.

KBC Acquires Majority Stake in Russian Absolut Bank

Yesterday evening a deal between Belgian bank KBC Group NV and Russian bank Absolut was made in which the Belgian bank and hedge fund investor acquired 92.5% of shares in the Russian bank. It was announced in a press release this morning.

The deal values the bank at 761 million euros, ($1.03 billion) and is awaiting regulatory approval by the Central Bank of Russia. Absolut, established in 1993 and based in Moscow, is the seventh largest non-state-owned mortgage lender and offers universal banking services. Absolut has more than 1600 employees and 39 branches. KBC said it intends to keep the current key management in place.

KBC Group Chief Executive Andre Bergen said in a statement, "KBC's long-term strategic plans entail further expansion in the markets of emerging Europe. Russia is therefore an extension of our existing presence in neighboring Central and Eastern Europe."

KBC Bank & Insurance Holding Company itself was established in 1998 following the merger of three Belgian financial institutions. The Group's corporate history is a testament to the successful expansion into growth countries of Central and Eastern Europe which have joined the European Union in 2004, such as Hungary, Poland, the Czech Republic and Slovakia. KBC employs some 50,000 people and caters for twelve million customers.