* Q4 net loss 294 million euros vs 306 mln expected
* Plans dividend of up to 2 euros for 2014
* Plans no dividend for 2015, to resume dividends thereafter
* Shares fall 6 pct, among weakest of European blue chips
(Adds details on shares, broker comment)
By Robert-Jan Bartunek
BRUSSELS, Feb 13 Belgian financial group KBC
will not pay a dividend for its 2015 financial year, an
unexpected decision that contributed to a fall in the bank's
share price on Thursday.
The bank, rescued in a 7 billion euro bailout in the
financial crisis, will pay shareholders up to 2 euros per share
for its 2014 year, will not pay a dividend for 2015, but will
start paying one again for 2016.
Investors had not expected a dividend on the bank's 2013
results, but were looking for payouts to resume thereafter. The
expected 2014 dividend was 0.88 euros and for 2015 1.27 euros,
according to a Reuters poll of 10 analysts.
KBC's shares fell 6 percent early on Thursday and were at
one stage the weakest performer in the STOXX 600 European
Banking Index, after a strong run over the past weeks.
KBC has already paid back the majority of the 7 billion
euros of state support received in the crisis. But if the bank
pays a dividend, it also has to pay 8.5 percent interest on the
remaining state aid to meet requirements imposed by the European
Analysts at ING said they had expected KBC to accelerate
repayment of state aid in the second half of 2014 and in full in
2015 so that the "drag" from payment of interest on the state
aid would be small. "Hence we are confused by ... proposing no
dividend over 2015," they said in a note.
The planned 2014 dividend, to be paid in 2015, will be the
most generous since before the financial crisis. The bank paid
out 3.78 euros for 2007.
KBC also said it would resume regular dividends for the
financial year 2016, to be paid in 2017, and would set out its
dividend policy at an investor day in June.
KBC posted a net loss of 294 million euros in the fourth
quarter, because of a 775 million euros one-off impairment
related to its Irish loan book which it had already announced at
the end of the third quarter.
The net loss was smaller than the 306 million loss expected
in a Reuters poll of six analysts.
The net profit of its Belgian business fell to 376 million
euros from 391 million in the previous quarter, as loans and
customer deposits both fell.
Sales of life insurance products rose as the group started a
campaign to draw in customers with guaranteed interest products.
Belgium is KBC's biggest market but the bank also has
operations in the Czech Republic as well as smaller interests in
Bulgaria, Hungary, Ireland and Slovakia.
In the Czech Republic, loans and deposits grew strongly but
the net profit fell sharply to 119 million euros from 157
million in the third quarter, hit by a fall in the Czech crown.
In November, the Czech Central bank sold crowns on the open
market for the first time in over a decade, knocking down the
currency by about 5 percent.
KBC's International Markets unit, which its businesses in
Bulgaria, Hungary, Slovakia and Ireland showed a loss of 731
million euros, because of the one-off charge taken in Ireland in
The Irish loan book stood at 15.3 billion euros at the end
of 2013, down from 15.5 billion at the end of the third quarter.
KBC said it expected Irish loan loss provisions to be in the
150 to 200 million euros range in 2014, dropping to 50 to 100
million in the two years thereafter and profit from 2016.
($1 = 0.7359 euros)
(Reporting by Robert-Jan Bartunek; editing by Philip Blenkinsop
and Jane Merriman)