Belgium nationalises Dexia retail bank in rescue deal

10 Oct 2011 | 07:25
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Dexia, the Franco-Belgian bank, has agreed to nationalise its Belgian banking division and secure state guarantees as part of a multi-billion euro rescue plan.

Belgium will pay €4bn (£3.45bn) to buy Dexia Bank Belgium, the largely retail Belgian division, which has 6,000 staff and deposits totaling €80bn from four million customers, the Telegraph reports.

Dexia also secured state guarantees of up to €90bn to secure borrowing over the next 10 years. Belgium would provide 60.5% of these guarantees, France 36.5% and Luxembourg 3%.

The governments rushed to support Dexia after it became the first bank to fall victim to the two-year-old eurozone debt crisis, with its shares plummeting 42% last week.

"We found an agreement on the fair division of the costs related to the management of the 'rest bank'," Belgian Prime Minister Yves Leterme told a news conference in the early hours of Monday.

The likely burden of bailing out Dexia led ratings agency Moody's to warn Belgium on Friday that its Aa1 rating could be downgraded.

Dexia's shares have been suspended since Thursday afternoon. Belgium's financial markets watchdog said trading would resume on Monday after the bank's news conference and analyst call at 8am London time.

Categories: Industry

Topics: Dexia bank

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