STOCKS NEWS EUROPE-KBC shares drop on legal threat

Shares in Belgian financial services group KBC (KBC.BR) drop after newspaper De Tijd reports the group could face legal action over complaints that KBC did not inform buyers of its collateralised debt obligations (CDOs) of the risks attached. [ID:nL4181579]

The stock drops as much as 6.64 percent to 12.51 euros and is the sharpest faller on the FTSEurofirst 300 index .FTEU3.

"It is now official that he (the lawyer for the CDO clients) will soon file a complaint," an analyst who declined to be named says, adding that this could partly explain the share price drop.

"But mainly KBC's credibility has been broken as a result of the capital increase of May 13 and the market is just fearing other skeletons might be in the closet," the analyst says.

For more on the May capital increase double click [ID:nLD572891]

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