Friday’s decision by the Netherlands government to nationalise Fortis’s banking and insurance businesses in the Netherlands left the Belgian government little choice than to nationalise the rest or urgently find a buyer to maintain confidence in the institution.
The result is a radically changed banking landscape in a country where banking had always been a dependably staid affair. Although Fortis did have a structured credit portfolio – some of which is being hived off in a separate vehicle as part of the BNP Paribas settlement – its chief undoing lay in the takeover last year of ABN Amro and a style of communication that subsequently eroded investor confidence.
Fortis’s disappearance leaves KBC, a well-capitalised retail-funded bancassurer of the old school, and Dexia, the Franco-Belgian lender that was subject to a €6.4bn ($8.6bn) bail-out by France, Belgium and Luxembourg last week, as the two sizeable banks left in Belgium.
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