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Belgian bank KBC to seek aid from state

Belgian bank KBC, whose shares have fallen heavily recently, was seeking 3.5 billion euros (US$4.5 billion) from the state to recapitalize before today, media reports said, but a company official denied the bank was in “crisis.”

Several Belgian media outlets reported on Saturday that KBC had asked the Belgian government for the 3.5 billion euro recapitalization, with meetings scheduled throughout the weekend to find a solution.

“The government will examine, along with shareholders, what actions, if need be, are necessary so that the bank can respond in an appropriate manner to an exceptional situation on the financial market,” Belgian Prime Minister Yves Leterme told Belga news agency.

KBC is the only major bank in the country not to have turned to the state or foreign establishments for help in the financial crisis.

A member of the management committee said on Saturday that “customers really need not worry.”

On Friday, KBC issued a statement saying it had a “solid capital base and deposits” but also indicating that it did not rule out seeking guarantees from the state.

In related news, Saudi Arabia extended US$2.7 billion in credit to needy citizens yesterday, sending stocks into a tailspin.

Saudi Arabia unveiled plans to deposit 10 billion riyals (US$2.67 billion) into the Saudi Credit Bank, which was established to extend interest-free loans to low-income citizens.
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