STOCKS NEWS EUROPE-KBC down on ING read-across

Shares in Belgian financial group KBC (KBC.BR) fall as much as 13.3 percent to 27.33 euros, their lowest point since Sept. 4, with analysts pointing to a negative read-across from Dutch peer ING's (ING.AS) plans to transform itself.

ING on Monday unveiled plans to split up the company in the most striking example yet of deep changes that EU policymakers want to force on banks that received state aid.

"Although there are arguments why the European Commission should require less of an effort from KBC than from ING, yesterday's announcement shows that the European Commission does ask for a major change in business model, " Bank Degroof analyst Ivan Lathouders says, adding this is pressuring the stock.

"This may mean that for KBC the 35 billion RWA (risk-weighted assets) reduction and the 1.3 billion euro sale of assets may not be sufficient to obtain the green light from the European Commission," he adds.

Fears of a capital increase, though unlikely as not favoured by key shareholders, are probably also pressuring the stock, Lathouders says.

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