KBC repays central bank loan
KBC Group has repaid an €8.3 billion loan to the European Central Bank ahead of schedule, citing the improved wholesale funding market.
The money was borrowed under the ECB’s three-year Long-Term Refinancing Operation (LTRO).
The group took out a €3.5 billion loan in December 2011 for its Irish arm, in a bid to make the subsidiary less dependent on funding from within KBC Bank. A second loan in February 2012 of €5.4 billion was used to enhance KBC Group’s funding maturity structure.
“Given the substantially improved condition of the wholesale funding market and KBC’s very solid liquidity position, we decided to repay the LTRO,” said chief financial officer Luc Popelier.
“KBC boasts a strong retail and corporate deposit base in our core markets and our wholesale funding needs for 2013 are well advanced in terms of coverage. After three weeks in the new year, we have already covered a quarter of our needs.”