Shares rocket for rescued Belgian KBC bank
Bailed out three times from public coffers in the financial crisis, shares soared on Thursday after it reported an unexpected net quarterly profit of 302 million euros.
KBC's share price rocketed up 22.49 percent to close at 19.99 euros, outpacing Belgium's Bel 20 stock index which was up just over two percent.
The second-quarter results, although 38-percent lower than the figure during the same quarter a year ago, were a pleasant surprise for the market which had expected a loss of more than 300 million euros.
"While volume growth slowed in Eastern Europe and merchant banking outstandings were reduced, credit and deposit spreads remained healthy," group chief executive Jan Vanhevel said.
KBC, Belgium's third-biggest bank by market value, has been among the hardest hit by the financial crisis in Europe and has gone cap in hand to the public coffers three times since last October.
Its three previous quarterly losses totalled some seven billion euros.
The European Commission gave the green light in June for six months to both a 3.5-billion-euro (5.0-billion-dollar) recapitalisation of the group and plans to help KBC shoulder troubled assets with state guarantees.
The bank received an injection of 3.5 billion euros of public money last October and another two billion euros from the regional Flemish government in January, with an option on another 1.5 billion if necessary.
The Belgian state stepped in for the third time in May offering a government guarantee of potential losses of 14.8 billion euros from toxic investments.
Vanhevel did not give an outlook for the rest of the year, but said he expects the overall economy to improve "only gradually."