BRUSSELS (Thomson Financial) - Belgian bancassurer KBC NV. post second-quarter results in line with analyst expectations and said it would double it sales in Central and Eastern Europe and Russia (CEER); CEO Andre Bergen said that if the effects of weakening credit markets were stripped out, it would have been one of the strongest quarters ever.
Second-quarter underlying profit fell to 510 million euros from 880 million euros last year, in line with analyst estimates of 405 million to 603 million euros.
Net profit including one-off items dropped to 493 million euros from 936 million last year, at the tope end of estimates of 405 million to 494 million.
Bergen said in a statement that the group booked 161 million euros of write-downs in the quarter.
'Eastern Europe continued to do very well ... On the other hand, the adverse equity and credit markets in June resulted in the recognition of additional markdowns at the end of the quarter'.
'An after-tax earnings impact of 161 million euros was posted, including an increase in the provision for exposure towards monoline credit insurers,' he added.
Bergen said the group had taken a further 138 million euros write-down due to the adverse equity market climate in June, mostly on proprietary equity holdings of the Belgian insurance division, and that the group has a 'comfortable position' in terms of capital.
On the group's outlook, Bergen said 'KBC has the clear ambition to double its net earnings in Russia and Eastern Europe in the foreseeable future'. He added that the group has enhanced cost discipline to cope adequately with increased cost inflation. frances.robinson@thomsonreuters.com fr/ejp/fr/ejp COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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