Belgian financial group KBC which took €3.5 billion ($4.5 billion) in government capital to shore up its finances, reported a quarterly loss of €906 million on credit-related charges.
KBC's third quarter loss was caused by €1.4 billion in impairments on a net basis from losses in structured credit holdings.
A year earlier, KBC reported a profit of €639 million.
The loss was slightly better than the €930 million loss projected by the banker and insurer on October 27th, when KBC released most details of its results as it tapped into €3.5 billion of government funding to strengthen its capital base.
It will have to repay the government at a premium, or pay a steep 8.51 per cent interest rate. The banker and insurer has also decided to scrap its 2008 dividend.
Shares in KBC are down by a half since mid-September, when the global financial crisis deepened and triggered the nationalisation or capitalisation of financial companies by governments, but are up 30 per cent from the 12-year lows recorded just before it took the government capital injection.
They last traded at €34.46 at the end trade yesterday.
Chief Executive Andre Bergen said in a statement that KBC's investments in central and eastern Europe helped to support the business, and that it would continue to focus on the area as well as strengthening its home Belgian market.
"Despite the difficult climate, and taking into account the recurring seasonal revenue pattern, commercial results were satisfactory, especially in Eastern Europe," Mr Bergen said in a statement.
Including the capital injection measures, KBC said its Tier 1 capital ratio for its banking business stands at 10.7 per cent, and that insurance solvency stood at 2.8 times the regulatory minimum.