Belgium mulling second bank bailout round-Reynders

BRUSSELS, Jan 20 - Belgium is mulling a second bailout for its troubled banking sector, whose shares have come under renewed pressure in recent days, Finance Minister Didier Reynders told Belgian news agency Belga on Tuesday.

"This time we must be there early enough to avoid having to save a bank in the middle of the night again," Reynders was quoted as saying.

He added that he would bring the matter to a planned meeting of the core cabinet on Wednesday.

"We have already paid out 20 billion euros in the first intervention. I do not know how much it will be in the second round. Great Britain has just made 100 billion available for the banking sector," he said.

Reynders added that he favoured a comprehensive intervention rather than tackling banks one-by-one, as happened at the end of September and into October.

Belgium was involved in an 11.2 billion euro bailout for Fortis with the Netherlands and Belgium before Fortis was carved up and partly sold to BNP Paribas.

Dexia received 6.4 billion euros from Belgium, France and Luxembourg and core shareholders before agreeing to sell its U.S. bond insurance business.

Belgium also paid out 3.5 billion euros to KBC and 500 million euros to unlisted Ethias.

KBC shares in particularly have been hit due to mounting speculation that it will be forced to make further writedowns of its credit portfolio and that it may seek fresh funds.

Its shares have fallen by more than 50 percent in the past three trading sessions.

Related business dailies De Tijd and L'Echo reported on their websites on Tuesday evening that the Belgian government was considering creating a "bad bank" that would hold the toxic assets of financial groups based in Belgium.

A second round of capital injections would not help Belgium's budget, which is expected by the European Commission to record a deficit of some 3 percent of gross domestic product this year and 4.3 percent next year.