‘SNS Reaal in talks on converting state aid to major shareholding’

Financial services group SNS Reaal is talking to the finance ministry about how to deal with its loss-making property subsidiary, the Financieele Dagblad reports on Wednesday.


The company wants to convert the remaining money it owes the government from the state bail-out four years ago into shares which would be worth €450m less, the paper says. The Dutch state would then become a major shareholder with a stake of more than 25% in the group.
SNS had a €848m capital injection from the state at the height of the financial crisis.
SNS Reaal mentioned its conversion plan in Tuesday’s quarterly financial statement and has earlier mooted setting up a bad bank to deal with its property investment problems.
Stakeholders
The finance ministry has refused to comment on the meetings but SNS chairman Ronald Latenstein told BNR radio on Tuesday talks are under way. ‘It is appropriate to talk to stakeholders,’ the FD quoted him as saying.
SNS Reaal’s property division posted a loss of €99m in the third quarter, cutting the group’s net profit to €34m. It’s solvency ratio is also down at 8.8%, below the European banking threshold of 9%.
The FD reported in July SNS Reaal, the fourth-biggest Dutch bank, may be considering selling two of its insurance units and had brought in Goldman Sachs to look into various scenarios for restoring its financial health.

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