Belfius Bank makes profit, cuts PIIGS exposure
BRUSSELS May 25 (Reuters) - State-owned Belgian retail bank Belfius, a former unit of bailed-out Dexia, reported a first-quarter net profit of 397 million euros ($500 million), and said it had cut its exposure to periphery euro zone government bonds sharply.
Belfius, whose rating was cut to Baa1 from A3 by Moody's on Thursday, said it had boosted its liquidity by 2.2 billion euros by securitising loans to small and medium-sized enterprises and had reduced its unsecured cash exposure to Dexia almost to zero.
The bank, which made a 1.37 billion euro loss last year, largely due to its Greek sovereign bond holding, said it had cut this exposure in recent months to 80 million euros.
Its exposure to Portuguese government bonds fell to 100 million euros and to zero for Spain.
At the end of 2011, it held 670 million euros of Greek government bonds, 253 million of Portuguese bonds and 853 million of Spanish bonds.
Moody's said the downgrade was due to Belfius's fragile liquidity positron, reliant on central bank financing, relatively high borrower concentration risk and the lack of visibility on its ability to generate sufficient profit. ($1 = 0.7948 euro) (Reporting by Philip Blenkinsop; Editing by Dan Lalor)