RATINGS RATIONALE

Moody's decision to place the ratings on review reflects (i) the continued negative pressure on profitability, partly stemming from the uncertain economic environment and partly due to insufficient revenue generation relative to the cost structure; and (ii) the difficulty the bank could face in achieving sustainable growth in assets under management (AuM) in the current, highly competitive operating environment.

The Kleinwort Benson Group has struggled to grow net AuM since the acquisition of the group by RHJI in 2010 mainly as a result of the low interest rate environment resulting in clients withdrawing from investments with low returns and some managed outflows of less profitable businesses. Although Moody's notes that the trend in AuM over the first half of financial year 2012 appears to be slightly improving the weak performance in increasing net AuM has in turn impacted the ability to generate sufficient revenues. This has meant that, even at an underlying level, profitability has been weak, further impacted by the conservative management of liquidity.

Notwithstanding the above, Moody's notes KB Group's low risk profile (private banking focus and a majority of its loans are secured residential mortgage loans or Lombard loans), highly liquid balance sheet, strong, deposit driven funding profile and ample level of capitalisation relative to risk. In addition, the KB Group has recently taken steps to increase its AuM through the hiring of key bankers and the acquisition of a private investment office with a focus on ultra high net worth individuals.

The rating review will focus on the likely operating performance and underlying profitability of the banks in 2012 and the expectations for 2013 in view of (i) the sustainability of the franchise in what is and will continue to be an intensely competitive market; (ii) the trend in AuM; and (iii) the ability of the group to generate positive earnings on a sustainable basis over the short- to medium-term. Given the downward pressure on the ratings from the factors identified above, Moody's does not exclude that the review process could result in a ratings downgrade of more than one notch.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Given the current review for downgrade, an upgrade of the ratings is unlikely in the short- to medium-term. In addition to the factors discussed above further weakening of profitability or a trending downwards in AuM could put further pressure on the ratings.

PRINCIPAL METHODOLOGIES

The principal methodology used in these ratings was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare each of the ratings are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entities or their related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Ross Abercromby Vice President - Senior Analyst Financial Institutions Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Johannes Wassenberg MD - Banking Financial Institutions Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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