Belgium’s KBC bank seeks to reassure after losses

BRUSSELS – Belgian bank KBC, the recipient of two public cash infusions, on Thursday posted annual losses of almost EUR 2.5 billion, while talking up its ability to ride out the financial crisis.

"The fourth quarter was truly dreadful for the financial markets, with no respite at all for the sector," admitted chief executive Andre Bergen.

He was talking about a fourth-quarter net loss of EUR 2.625 billion suffered as the US-born financial crisis caused a firestorm in the sector.

Bergen spoke of subsequent measures to mark down bad debt to zero, to reduce costs and to "de-risk the business portfolio".

The bank had already announced writedowns on the portfolio for the whole of 2008 of EUR 4.0 billion.

The overall result was a net loss in 2008 of EUR 2.484 billion.

As part of cost-cutting measures, the Belgium-based banking and insurance group announced on Wednesday that it would slash 500 jobs in its operations in Poland this year.

In January, Belgian regional authorities in Flanders moved to bail out the embattled bank, providing up to EUR 3.5 billion after its shares collapsed in a crisis of investor confidence.

KBC had already received EUR 3.5 billion of state money in October 2008.

"The financial position of the group remains solid, especially after we secured additional capital support from the Flemish regional government at the start of this year," Bergen assured.

"Although the financial crisis has obviously not come to an end yet, the underlying business performance at the start of 2009 is encouraging, as illustrated by the fact that January 2009 was a better month than January 2008."

In early trading, Thursday KBC shares were up by 0.4 percent.

[AFP / Expatica]