WRAPUP 2-KBC, Dexia recover in Q3, EU rulings eyed
* KBC Q3 net profit beats forecasts, Dexia in line
* KBC merchant banking outperforms
* Both banks awaiting EU rulings on state aid
* Dexia shares down 3.0 percent, KBC up 3.4 percent
(Adds EU to rule on KBC next week, trader comment)
BRUSSELS, Nov 13 (Reuters) - Belgian bank KBC (KBC.BR) and Franco-Belgian rival Dexia (DEXI.BR) reported improved third-quarter earnings and expressed guarded optimism about restructuring plans awaiting EU approval.
KBC beat market expectations on Friday with a 15 percent rise in net profit, boosted by earnings at merchant banking that more than doubled.
Dexia reported a third consecutive quarterly net profit that was in line with analyst expectations, with cost cuts making up for lower than forecast income.
Dexia shares were down 3.0 percent at 5.5160 euros at 1455 GMT, while KBC was up 3.4 percent at 32.90 euros, making it among the top gainers in the FTSEurofirst 300 .FTEU3.
"Dexia has reacted differently because it is not clear how much they will have to slim down for the European Commission. For KBC, it is seeming more clear what will happen. Their results have also helped," a Brussels-based trader said.
The two companies are awaiting rulings from the European Commission on state aid, with Dexia likely to hear by the end of February. Neither gave any new detail of their restructuring plans but both were positive about dealings with the Commission which is set to approve KBC's plans next Wednesday, according to sources. [ID:nLD129542]
KBC chief executive Jan Vanhevel said talks had entered a final stage and he was confident of the group's business case.
"We see the finishing line," he told a conference call.
KBC hopes to remain in banking and insurance in Belgium and emerging Europe, where it is the fifth-largest bank by assets, avoiding the fate of ING (ING.AS) which is to spin off its insurance business. [ID:nLQ54845]
"Discussions with the European Commission regarding the restructuring of Dexia are continuing in an open and constructive climate," Dexia chairman Jean-Luc Dehaene said. Continued...
