FACTBOX-KBC, Dexia still awaiting EU state aid rulings

BRUSSELS Nov 13 (Reuters) - Franco-Belgian financial services group Dexia (DEXI.BR) and Belgian rival KBC (KBC.BR) reported improved third-quarter net profits on Friday and expressed guarded optimism about their restructuring plans. [ID:nLD374313]

Here are details of the aid they received, the measures they have taken to date and the possible payback demanded by the European Commission to compensate for state aid.

KBC (KBC.BR) (BELGIUM):

STATE AID:

* 7 billion euros of capital from Belgium and the Flemish regional government

* Asset relief plan, under which Belgium guarantees credit portfolios with a notional value of 20 billion euros. The initial 10 percent tranche was covered by KBC, with the remaining 90 percent by the Belgian state.

STATUS:

In-depth probe underway. Restructuring plan submitted to the Commission at the end of September. KBC said it should get a decision by the end of the year.

POSSIBLE SANCTIONS:

* Has two 'home' markets -- Belgium and eastern Europe, with core Czech, Poland, Hungary, Slovakia -- and wants to remain in banking and insurance in both, avoiding fate of ING (ING.AS), which is to spin off its insurance business. [ID:nLQ54845]

* Its London brokerage and corporate finance house, KBC Peel Hunt, its Irish activities, Belgian banking unit Centea and emerging Europe assets outside Czech, Poland, Hungary, Slovakia may be shed.

* KBC could partly float operations in the Czech Republic and Hungary. [ID:nLC129888]

DEXIA (DEXI.BR) (FRANCO-BELGIAN)

AID:

* 6.4 billion euro bailout by France, Belgium, Luxembourg and key shareholders in Sept 2008

* 150 billion euros in state guarantees for its new borrowing, now reduced to 100 billion euros.

* Belgium, France to cover losses from the retained $16.5 billion of financial products of U.S. subsidiary FSA, which Dexia has sold. Dexia is to cover the first $3.1 billion loss on top of $1.4 billion of existing reserves as of September 2008.

STATUS:

* EU Commission launched an in-depth investigation and said in August restructuring plan could distort competition and did not guarantee group recovery. To give a ruling by end February.

* Dexia sold FSA in July and to cut 1,490 job cuts in 2009-2011, part of a plan to cut costs by 600 million euros in three years.

* To focus public finance on France, Belgium, Luxembourg, Italy and Iberia and retail, private and commercial banking on Belgium, Turkey, Luxembourg and Slovakia.

* To sell its 20 percent stake in Credit du Nord to Societe Generale, which could raise some 500 mln euros.

* Agreed to 20 percent stake in Credit du Nord to Societe Generale, which could raise some 500 mln euros.

POSSIBLE SANCTIONS:

* Commission likely to focus on Dexia's need to shrink its balance sheet, its financial products portfolio and possible further divestments. Dexia has said it aims to operate without state support by end-Oct. 2010.

* French life insurance activity Dexia Epargne Pension mooted as one unit to be sold. Also French public finance arm Credit Local mentioned by media as to be sold, but Dexia says this does not form part of the discussions with the Commission. (Compiled by Philip Blenkinsop; Editing by Hans Peters)