Beleaguered Belgian bancassurer
KBC has posted a net loss of €3.6 billion ($4.9 billion) for the
first quarter, forcing the Belgian government to step in for a
third time to provide aid to the group.
KBC wrote down a further €3.8 billion in
toxic assets after its bond insurer, MBIA, was downgraded by
ratings agencies; the Belgian government subsequently announced it
would offer a guarantee for 90 percent of the bank’s losses up to a
limit of €14.8 billion.
Underlying net profit rose at all of KBC’s
regional units, but total impairment charges stood at €707 million,
which included €307 million in impairments on loans and
KBC is among a group of institutions,
including Citigroup, currently suing MBIA, alleging that a
restructuring of the bond insurer’s business has resulted in
downgrades which have impacted on the banks.