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The Netherlands nationalises financial services group SNS Reaal

Friday 01 February 2013

Dijsselbloem nationalises sns reaal

Finance minister Jeroen Dijsselbloem explains his decision to reporters. Photo: Novum

Dutch bank and insurance group SNS Reaal, in trouble because of heavy losses on its property finance division, is to be nationalised, the Dutch finance ministry announced on Friday.

Finance minister Jeroen Dijsselbloem said the state bailout was needed to prevent the Netherlands' fourth-largest bank from collapsing.

The nationalisation means two of the four biggest Dutch banks are now in state hands. ABN Amro was nationalised following its abortive takeover by an international banking consortium.

‘Today, SNS Reaal has been fully taken over by the Dutch state. Without finding a solution, there was an immediate and dangerous situation for financial stability,’ Dijsselbloem told an early morning news conference. ‘I had to conclude that nationalisation was inevitable.'

Shareholders

The takeover means shareholders will probably lose all their investments. Retail savers with deposits up to €100,000 are protected under the guarantee scheme.

Shareholders lobby group VEB said it was already looking at legal action to ensure compensation for shareholders.

The direct costs of the nationalisation amount to €3.7bn, including a capital injection of €2.2bn - the equivalent of some €220 per person. The state is also providing some €6bn in loans and guarantees for future operations.

Earlier this week, it emerged investment group CVC was interested in taking over the healthy parts of SNS Reaal. But that deal would have involved the state taking a major financial risk without having a say in decision-making, Dijsselbloem told reporters.

Boardroom changes

The nationalisation also means all change among top executives. Chief executive Ronald Latenstein, finance head Ference Lamp and head of the supervisory board Rob Zwartendijk are all out. Gerard van Olphen, CFO at health insurance group Achmea, will take over as CEO.

SNS is the fourth largest banking and insurance group in the Netherlands. In 2008, SNS received a state bailout of €750m which it has not yet repaid.

Earlier efforts to involve the other three big banks, ABN Amro, ING and Rabobank, in the rescue were scuppered by Brussels because ABN Amro and ING themselves have had state aid.

© DutchNews.nl



 

Readers' Comments

and guess who's going to pay!

By AI | 1 February 2013 11:55 AM

I always knew this one would turn out ok.

By Dr Ponzi | 1 February 2013 12:29 PM

There is no mention of the usual perks that execs can count on for failure - generous severance pay, deferred bonuses, pension provisions etc - being withheld. So we can't really tell if the SNS execs who are 'out' have been treated differently to those who are more in need, are being treated less sympathetically. I refer to your other story (Engineering pension funds announce savage pay-out cuts...)

By michael dawkes | 1 February 2013 12:32 PM

Yesterday Deutsche bank revealed a loss of more than 3 billion euros....Today a dutch bank goes bust and state takes over.....At the same time "Davos" says that Europe has improved a lot and now everyone is moving towards growth.... I don't understand..

By Weshall | 1 February 2013 12:54 PM

a classic example of an industry that is so crucial to the state that they simply cannot fail. The decisions by their top persons are win win....if they are successful they get a ton of money and if they go bust they will be bailed out. They have not said it anywhere yet, but we will be paying....this is going no where

By Adrian | 1 February 2013 4:03 PM

When I grow up I want to be a "bankster" daddy. Good idea son, you can never fail!".

By Tiny tot | 1 February 2013 6:48 PM

When will the passive nature of this country shift? Cities are dying, business are going bankrupt, jobs being lost... Yet cities are still closed Sundays for shopping (meaning jobs, tax, parking money etc not being generated).. Zoning plans are still set in stone.. Commercial landlords charge rents like they did in 2005.. Banks make you feel like it's your privilege to let them hold your money.. And no one gets mad enough to say enough.. Follow Icelands example.. Let them fail, put the bankers/politicians responsible in jail.. Build fresh, with new ideas.. Get money flowing.. When will enough be enough?

By SCM | 2 February 2013 12:28 AM

Since the banks cannot failed, they should be state owned. The gov can dictate the amount of pay the executive gets and the profits can go back to the state. Banks are profitable business so long as the pay of some executives are capped and risks are well managed.

By ufo | 2 February 2013 9:47 AM

That's 3 out of the big 4 Dutch Banks now that have had to be 'nationalized' (read: socialized) because of bad upper management. Hmmm, that's only 2.5 out of 10 point scale, not 5.8 - thus not 'voldoende' (adequate) – this is a whopping 75% failure rate. Looks kind of bad in the international press huh? Kind of like really REALLY embarrassing - again. When and where are the embarrassing events (LPF, 7x collapsing governments, PVV, bank failure, fraud, unhygienic hospitals, child safety, etc.) that continue to take place in the Netherlands going to end? This is far far out of proportion to the rest of the developed world, this many 'issues'

By B | 2 February 2013 10:06 AM

Really B(ill)? Maybe you should have a look once in a while at the news from abroad and what is happening there in that, so called, developed world. I don't see much difference.

By pepe | 3 February 2013 11:46 AM

 
 
 
 
 
 
 
 
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