Trading in KBC shares has been suspended after the Belgian bank asked the country??s market regulator to protect it from ??wild rumours? of a third government rescue plan in seven months.
KBC said it was unable to properly address the markets today because it is in a ??black-out? period ahead of its first-quarter earnings announcement set for Thursday.
Reports in the Flemish press have suggested KBC is set to write down a further ?1bn on its debt portfolio, with ministers meeting late last night to find ways to protect the bank.
KBC made a net loss of ?2.5bn in 2008 after writing down its extensive portfolio of toxic collateralised debt obligations. Reports in the Belgian media say that further writedowns of the CDO portfolio are once again to blame for the expected loss.
Shares in KBC closed down almost 13 per cent on Tuesday to ?19.10, after a three-month rally in which the shares had quadrupled in value.
