Belgian bancassurer KBC Group NV (KBC.BR) cancelled the proposed 1.35 billion euro ($1.9 billion) sale of its private banking arm to Indian group Hinduja after failing to win regulatory approval for the deal. The collapse of the deal sets back KBC's plan to free up capital to pay back state aid and means any eventual sale could be done at a lower price. "There is no denying this is a disappointment to us," said KBC Chief Executive Jan Vanhevel in a statement on Tuesday. KBC shares dropped as much as 6.9 percent in morning trading to 27.30 euros, a near eight-week low. At 1120 GMT, they were down 5.4 percent, underperforming the European banking sector index .SX7P, which was 2.7 percent weaker.
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