KBC pays back 3 billion euros of bailout to the federal government

During the financial crisis in 2008-2009 KBC was rescued by the federal and Flemish governments. Each government gave 3.5 billion euros to bail out the bank insurer. This month KBC paid back the federal government 3 billion euros, plus the 15% interest of 450 million euros. Given the 500 million euros the bank insurer reimbursed earlier this year, this settles their full debt amount with the federal government. They further hope to pay the Flemish government 1.17 billion plus 580 million euros in interest early next year if their financial supervisor, the National Bank, gives the go-ahead. The remaining 2.33 billion euros must be settled in seven payments of 330 million euros plus penalties between 2014 and 2020. “We could of course choose to accelerate the payment,” the bank insurer says. This means that KBC will have honoured its commitment to pay the federal and Flemish governments a total of 4.67 billion euros by the end of 2013, as agreed with Europe. In an effort to prevent its capital buffers from being weakened by the repayment, KBC has also come up with 2 billion euros in fresh funds by issuing new shares to the total of 1.25 billion euros. In addition, they will issue 0.75 billion euros in debt securities.These fresh funds will ensure that the bank complies with the National Bank’s capital requirements. According to KBC the capital increase, which was off-limits for individual investors, was fully supported by the key shareholders, that is to say Cera a cooperation of partners/KBC Ancora a listed partnership, the Farmers‘ Union Boerenbond and the families, who jointly own 54% of KBC.
The 3.45 billion euros paid to the federal government does not affect the state budget but will reduce public debt which, according to the National Bank, will stand at 100.2% after the reimbursement.