Belgian Bank Is Rescued
Monday, September 29, 2008
Fortis, the largest Belgian financial-services firm, received a $16.3 billion rescue from Belgium, the Netherlands and Luxembourg after investor confidence in the bank evaporated last week.
Belgium will buy 49 percent of Fortis's Belgian banking unit for 4.7 billion euros, while the Netherlands will pay 4 billion euros for a similar stake in the Dutch banking business, the governments said in a statement late yesterday. Luxembourg will provide a 2.5 billion-euro loan convertible into 49 percent of Fortis's banking division in that country.
Fortis is the largest European firm so far caught up in the global financial crisis that drove Lehman Brothers Holdings into bankruptcy two weeks ago and prompted President Bush to seek a $700 billion bank rescue package. Fortis dropped 35 percent last week in Brussels trading on concern the company would struggle to replenish capital depleted by the 24.2 billion- euro takeover of ABN Amro Holding units and credit write-downs.
Fortis plans to sell its stake in ABN Amro's consumer banking unit, though a buyer wasn't identified. Fortis joined Royal Bank of Scotland Group and Spain's Banco Santander last year to buy ABN Amro for 72 billion euros.