BRUSSELS, Aug 5 (Reuters) – State-supported Belgian bank KBC (KBC.BR: Quote, Profile, Research) beat expectations with growth in second-quarter profit before one-offs led by lower costs and reduced bad debt provisions. The banking and insurance group, which received 7 billion euros ($9.3 billion) in state aid to help it through the financial crisis, said on Thursday it expected loan losses to fall this year, with revenue healthy although costs could rise.

Many of Europe’s top banks have beaten earnings forecasts this week as bad debts have shrunk more than expected, outweighing a slowdown in investment banking, which was hit by sovereign debt fears. [ID:nLDE6721I5]

Commerzbank AG (CBKG.DE: Quote, Profile, Research) followed that trend on Thursday and raised its outlook. [ID:nLDE6730X4]

KBC’s net profit before one-offs rose 35 percent year-on-year to 554 million euros in the second quarter, versus an expected 459 million euros.

However, around 400 million euros of exceptional costs linked to its wind-down programme and sovereign credit spreads, left the absolute net profit at 149 million euros, a 51 percent drop, albeit still higher than expected.

Operating expenses, which KBC said had probably bottomed out in the fourth quarter of 2009, fell in the first and again in the second three months of 2010, against expectations of a rise.

Insurance suffered due to lower premiums and higher claims from flooding in eastern Europe and KBC’s dealing rooms earned less money, but interest income from deposits and lending rose far more than expected. Fee and commission income also rose.

BRUSSELS (Reuters) – After years of seeking a cost-cutting merger in stainless steel, ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz) is giving up the fight and says it wants to spin off its activities instead.

Analysts see no reason to regard the move as the precursor to long-awaited combinations in the competitive European sector, which remains burdened by overcapacity in the durable metal whose biggest use is in kitchen pots, pans and cutlery.

ArcelorMittal, the world’s biggest steel maker, said its stainless division could be a separately listed company in the next six to 18 months, subject to regulatory approval.

The new firm, present in Europe and Brazil, would be free to pursue its own growth strategy and focus more on its specialty products. But Chief Financial Officer Aditya Mittal conceded ArcelorMittal had tried to consolidate the business in the past few years without success.

“The stainless steel business needs consolidation primarily because we have a situation of overcapacity in Europe,” he said.

Such a consolidation still seems a way off.

Analyst Andrew Snowdowne at UBS said he did not feel the problem of structural overcapacity in stainless steel was about to be fixed.

BRUSSELS, July 28 (Reuters) – After years of seeking a cost-cutting merger in stainless steel, ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz) is giving up the fight and says it wants to spin off its activities instead.

Analysts see no reason to regard the move as the precursor to long-awaited combinations in the competitive European sector, which remains burdened by overcapacity in the durable metal whose biggest use is in kitchen pots, pans and cutlery.

ArcelorMittal, the world’s biggest steel maker, said its stainless division could be a separately listed company in the next six to 18 months, subject to regulatory approval. [ID:nLDE66P19P]

The new firm, present in Europe and Brazil, would be free to pursue its own growth strategy and focus more on its speciality products. But Chief Financial Officer Aditya Mittal condeded ArcelorMittal had tried to consolidate the business in the past few years without success.

“The stainless steel business needs consolidation primarily because we have a situation of overcapacity in Europe,” he said.

Such a consolidation still seems a way off.

Analyst Andrew Snowdowne at UBS said he did not feel the problem of structural overcapacity in stainless steel was about to be fixed.

BRUSSELS, July 28 (Reuters) – ArcelorMittal (ISPA.AS: Quote, Profile, Research, Stock Buzz), the world’s largest steelmaker, forecast a sharp fall in earnings in the third quarter due a slowdown in China, the normal summer lull and higher raw material costs.

The company, with output more than double that of its nearest rival, also said on Wednesday it was considering spinning off to shareholders its stainless steel division, which employs about 4 percent of its workforce.

ArcelorMittal said its much-watched core profit (EBITDA) would fall to between $2.1 billion and $2.5 billion in the third quarter, the mid-point being 23 percent below the second quarter number and worse than analysts had been expecting.

The market had on average forecast a figure of $2.6 billion euros, based on a Reuters poll of 12 analysts.

“Although the third quarter will be impacted by a combination of seasonal factors and the effects of the economic slowdown in China, underlying demand continues to show improvement,” Chief Executive Lakshmi Mittal said in a statement.

“The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers,” he continued.

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BRUSSELS, July 12 (Reuters) – Anheuser-Busch InBev (ABI.BR: Quote, Profile, Research), the world’s largest brewer, said on Monday a New York arbitration panel has ruled that its ownership of a 50 percent stake in Grupo Modelo (GMODELOC.MX: Quote, Profile, Research) is legitimate, dismissing the Mexican beermaker’s $2.5 billion claim.

Ending the dispute could open the way to AB InBev taking an increased stake in Modelo, Mexico’s largest brewer and producer of the Corona brand, analysts say.

AB InBev shares were 0.5 percent higher at 41.43 euros at 1000 GMT, when the Stoxx 600 European food and beverage index was up 0.1 percent.

Modelo filed for arbitration in October 2008 during InBev’s $52 billion acquisition of Anheuser-Busch, which owned 50 percent of Modelo, claiming it was not consulted about the takeover. Last year AB InBev said Modelo was also demanding $2.5 billion in damages.

Analysts said the news was positive in removing the prospect of it having to pay damages, but also wondered how the two companies would cooperate in future. Few expected an immediate takeover deal.

Andrew Holland of Evolution Securities said in March that AB InBev was likely to announce this year that it would be acquiring the rest of Modelo. On Monday, he said he believed it at least made sense now for both parties to meet for talks.

“I have no doubt that AB InBev would like to do the deal. The intention of the (Modelo) controlling shareholders is not clear,” he said, adding the price for the remaining 50 percent was likely to be between $11 billion and $13 billion.

BRUSSELS, June 24 (Reuters) – Alfacam Group (ALFGR.BR: Quote, Profile, Research), which has rented out television equipment and technicians at the soccer World Cup, believes its 2010 results should recover at least to 2008 levels thanks to a boom year in sports.

The Belgian company, which leases cameras, cable and outside broadcast (OB) vans for large events, suffered a 6.5 percent drop in turnover and a 23.1 percent decline in core profit

(EBITDA) last year, with no major sporting events and a dampening effect from the financial and economic crisis.

“It should be equal or better than 2008 and substantially better than 2009… although we are only halfway through,” Chief Executive Gabriel Fehervari told Reuters.

“It should be better at the level of turnover, but also the EBITDA level. Margins are better on bigger jobs than on average jobs,” he said in an interview late on Wednesday.

The company’s margin on EBITDA to turnover fell last year to 36 percent from 44 percent in 2008.

“In a good year we can reach 40 percent. That is our target,” said Fehervari, who founded Alfacam with his wife 25 years ago.

BRUSSELS (Reuters) – A Flemish party that wants to split Belgium triumphed in a parliamentary election on Sunday, a result that could make it hard to form a coalition quickly and deliver austerity to contain a rising national debt.

Belgium can ill afford drawn-out coalition talks because policy paralysis could make the country more vulnerable on financial markets that are closely watching a sovereign debt crisis among the 16 countries that use the euro.

The N-VA (New Flemish Alliance) was the strongest party in the Dutch-speaking Flanders region of northern Belgium. It won more votes there than the French-speaking Socialists (PS) secured in separate voting in the southern, Francophone region of Wallonia, nearly complete results showed.

“The N-VA has won the election today,” N-VA leader Bart De Wever, 39, told cheering, flag-waving supporters who burst into a rendition of the Flemish national anthem.

Interior Ministry projections showed the N-VA, which advocates Belgium’s step-by-step dissolution with Flanders and Wallonia going their separate ways, would have 27 seats in the lower house of parliament, one more than the PS.

But together with the Flemish socialists, the PS could form the largest group in parliament, meaning PS leader Elio Di Rupo could become the next prime minister.

De Wever is reluctant to be leader of a united Belgium, and has said he is open to the idea of a first French-speaking premier since 1974 if that would bring more powers to Flanders.

BRUSSELS, June 8 (Reuters) – In Belgium’s linguistic battle, the border of Brussels is the frontline.

A clash over the electoral boundaries in and around the capital sparked the collapse of the government in April and has led to a parliamentary election to be held on Sunday.

Belgium is split horizontally into the Dutch speaking Flanders region in the north and French speakers in the less economically prosperous Wallonia region to the south.

But Brussels and the electoral area immediately around the capital has a unique, bi-lingual status and that — rather than the debt crisis that is most on the minds of other European countries — has dominated the agenda ahead of the election.

Opinion polls forecast the largest gainer in the vote will be Flemish separatist party N-VA, which advocates the gradual disappearance of Belgium, citing the 1993 break-up of Czechoslovakia as a model for clean divorces. [ID:nLDE64T02K]

The Dutch speakers, who make up 60 percent of Belgium’s population, complain their language and culture are threatened by the spread of French from the capital region. French speakers say the defence of Dutch can be mean-spirited and petty.

“The region (around Brussels) is a very important political symbol. It’s more than just the language border. It’s about how French and Dutch speakers deal with one another,” said Carl Devos, politics professor at the University of Ghent.

BRUSSELS (Reuters) – The soccer World Cup has lured companies hoping to boost revenues after two slow years but broadcasters will struggle to make a profit and top consumer goods marketers will have as keen an eye on cost as impact.

For the tournament beginning next week, companies from faster-growing emerging markets have come forward as sponsors with money to burn and online and mobile media are expecting large benefits.

The massive viewer ratings make the tournament irresistible to broadcasters, but they have paid $2 billion for television rights, up 50 percent on the last World Cup in Germany in 2006, according to media research group Screen Digest.

“The World Cup is more than ever the biggest show on earth… Advertising sells at a premium, but paradoxically it is not always profitable for many broadcasters,” said Vincent Letang, Screen Digest’s head of advertising research.

“Many brands have spent enormous amounts to be official sponsors and might bet on online and viral marketing rather than spend millions to outbid competing brands from top (TV) spots.”

French broadcaster M6 did not bid for rights to the 2010 competition and rival TF1 has sub-licensed some matches to Canal+ after neither recouped costs for the 2006 World Cup, according to Screen Digest.

Letang says TF1 might expect a 20-30 million euro ($24.5-$36.8 million) surge in advertising sales and Britain’s ITV a 30 million pound ($43.8 million) boost. Gains will depend though on the fate of the national soccer teams, given viewers and brands lose interest if the side is knocked out.

BRUSSELS/PARIS, May 11 (Reuters) – Franco-Belgian financial services group Dexia SA <DEXI.BR> reported a higher than expected first-quarter net profit, boosted by a one-off capital gain, and revealed its exposure to Greece.

The company, kept afloat by a bailout and state guarantees in late 2008, said in a statement on Tuesday its exposure to Greek sovereign debt was 3.7 billion euros ($4.7 billion), with little to no exposure to Greek banking, local authorities and corporates.

It added its insurance companies had exposure to a further 1.2 billion euros of Greek sovereign debt, but this was less of an issue for Dexia itself.

Dexia had a 19 billion euro exposure to sovereign bonds at the end of 2009, of which 18 billion euros rated AA or below. It did not give a breakdown per country.

The company’s net profit declined by 13.9 percent in the first quarter to 216 million euros, above the 194 million euro average in a Reuters poll of seven banks and brokerages.

The company, once the world’s largest lender to municipalities, booked a pretax 153 million euro gain from the disposal of its stake in Assured Guaranty <AGO.N>, the purchaser of Dexia’s loss-making U.S. bond insurer FSA last year.

It also took 165 million euros in impairments for its financial products portfolio and 56 million for its Turkish banking unit Denizbank, a figure lower than in the fourth quarter of 2009.