Dexia increased on January 15th, 2001, its shareholding interest in Kommunalkredit Austria AG (KKA) from 26.7% to 47.6%. The expanded equity interest is the result of both a capital increase decided by the Supervisory Board of KKA , on December 14th 2000 and the sale of the shares held by mortgage banks which are KKA shareholders.

Subsequent to this operation, the shareholding structure is as follows : Investkredit Bank AG 51% ; Dexia 47.6% ; mortgage banks 1.4%.

The shareholders"pact stipulates a mutual right of preemption between the Dexia group and Investkredit Bank.

The Dexia group has been a shareholder of Kommunalkredit Austria AG since1992. The only institution specialized in local government financing in Austria, KKA is mainly active in the Austrian and Swiss markets and, in cooperation with the Dexia group, in central European countries with a good rating. The bank also serves Austrian public authorities as the manager of the country"s Environment and Water Management Fund.

This operation allows the Dexia group to strengthen its ties with KKA, a key partner for the group in its development in central European countries. To this end, the two groups signed a cooperation agreement in 1998 stipulating that the Dexia group will work with KKA to define its development in the target countries of central Europe like Poland, the Czech Republic, Slovakia, Hungary and Slovenia, and will associate it in acquisition of equity interests in these countries, as has already been the case in Slovakia.

Its closeness to these markets and the experience it has acquired make Kommunalkredit Austria AG a first-rank partner for Dexia.