DSB put under central bank control

Monday 12 October 2009

Independent bank DSB has been put under the official supervision of the Dutch central bank following reports it is on the verge of bankruptcy.

A court in Amsterdam took the step on Monday morning after a string of claims and counter claims about the financial position of the bank. The central bank is required to intervene if a bank is in trouble.

The Volkskrant, quoting finance ministry sources, said DSB was about to collapse in its morning edition. But that claim was denied by a bank spokesman.

Later it transpired finance minister Wouter Bos had been at the central bank for talks on Sunday night.

Takeover

The Financieele Dagblad reported on Monday that efforts to persuade another bank to take over DSB have also failed.

Both papers says the finance ministry has indicated it will not step in and bail out DSB, which has a balance sheet total of €8bn and is considered too small to rescue.

DSB, started by former policeman Dirk Scheringa, has been hit by a crisis of confidence following claims its salesmen saddled customers with mortgages they could not afford and unnecessary insurance policies.

Compensation

Thousands of people have taken their money out of the bank since one campaigner for compensation urged them to do so on a tv show.

The FD says Scheringa made the rounds of Rabobank, ING, ABN Amro and Fortis Nederland earlier last week trying to sell DSB for €250m. The paper says ING, ABN Amro and Fortis opted out because of fears that Brussels would object.

Unlisted Rabobank does not want to take over DSB on its own because of the risk of lengthy litigation by clients.

Unhappy

Rabobank is also unhappy the central bank has not stepped in earlier. This spring, Scheringa paid himself dividends of €11m and lent €75m to a foundation which runs Alkmaar's football club AZ and a new modern art museum.

If DSB does collapse, savers will be entitled to up to €100,000 each under the national guarantee scheme. As the biggest savings bank, a large amount of that money will come from Rabobank.

© DutchNews.nl

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