Belgium: Write-down puts KBC into loss

Even as shares rallied last month, some banks reported severe problems. KBC’s write-downs of insurance from MBIA on a previously undisclosed €14.4 billion collateralized debt obligation portfolio hammered the Belgian bank’s results, turning a modest €465 million first-quarter operating profit into a €3.6 billion loss.

The bank joined legal action last month against MBIA following the US reinsurer’s transfer of valuable assets to a separate entity in February. KBC had to buy insurance from the state against potential losses on €20 billion of exposure.