News | Wednesday, 01 October 2008

Second Belgian bank rescued within 24 hours

The Belgian Government stepped in for the second time in 24 hours to rescue a bank as it led a €6.4 billion cash injection for Dexia, the world’s biggest lender to local governments.
Axel Miller, Chief Executive and Pierre Richard, Chairman, were to step down once replacements were found at the bank, which is quoted on the Brussels and Paris stock exchanges.
The government in Brussels announced early yesterday that Belgium and Belgian stakeholders in Dexia, including three regions and three institutional shareholders, would invest €3 billion in the bank.
The French Government would contribute €1 billion while French State-controlled Caisse des Depots would invest €2 billion.
The Luxembourg Government would also put in €376 million in the form of convertible bonds.
The move came a day after the Dutch, Belgian and Luxembourg Governments partially nation-alised Fortis, pumping €11 billion into the embattled banking and insurance group, and the Icelandic Government took control of Glitnir, the country’s third largest bank.

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