Britannia Radio

Nobody here has probably heard of Fortis, but it is ‘another brick in 
the wall’ of the international banking system .

It epitomises what Roger Bootle says elsewhere “My own chief concern 
is that a similar problem will emerge in the eurozone”   [see Bread & 
Breakfast don’t come cheap”]

xxxxxxxxxxx cs
===================
THE TIMES
Three countries nationalise Fortis as BNP Paribas pulls out of rescue 
talks

    Robin Pagnamenta and Suzy Jagger

The governments of Belgium, Holland and Luxembourg last night 
unveiled a €11.2 billion (£8.9 billion) joint nationalisation of 
Fortis as the Benelux banking giant became the first major 
continental European victim of the global credit crunch.

Yves Leterme, the Prime Minister of Belgium, announced that his 
Government would invest €4.7 billion to buy 49 per cent of the 
group’s equity. Luxembourg and the Netherlands are to spend €2.5 
billion and €4 billion, respectively, buying 49 per cent stakes in 
the bank’s units in those countries.

Fortis is also set to sell its stake in ABN Amro — the source of its 
current troubles — while its chairman, Count Maurice Lippens, is to 
resign.

Details of the Fortis rescue emerged after talks in Brussels led by 
Jean-Claude Trichet, the President of the European Central Bank, and 
involving Dutch and Belgian ministers and the bank company’s board.

Benelux governments are desperate to avoid a panic. The banking and 
insurance group is Belgium’s largest private sector employer. About 
half the country’s population bank with it.

News of the bailout came as turmoil continued to grip the banking 
sector on both sides of the Atlantic. In London, the Government was 
preparing to nationalise Bradford & Bingley and to sell key parts of 
it to Santander of Spain. In the United States, Wachovia continued 
its own hunt for a buyer, with Wells Fargo and Citigroup locked in a 
bidding war.

The partial nationalisation of Fortis, whose assets are several times 
bigger than Belgium’s GDP, was announced just hours after BNP 
Paribas, of France, and ING, of the Netherlands, had pulled back from 
talks to buy the group. Those discussions had foundered over 
guarantees that the suitors were seeking from the Benelux governments 
against possible future losses in Fortis.

BNP, which was reported to have offered €1.60 per Fortis share 
yesterday, and ING declined to comment.

Fortis, whose origins date from the early 19th century, had almost a 
quarter of its value wiped from its shares last week amid questions 
over its solvency.

The group’s problems began with its joint €70 billion takeover of ABN 
Amro last year with Royal Bank of Scotland and Santander. Since then, 
Fortis has struggled to raise its €24 billion outlay on the deal.

The group’s shares plunged to €5.18, their lowest level in 15 years, 
on Friday leaving the group valued at less than half that figure, 
just over €12 billion.

Fortis, which last week appointed its third chief executive in three 
months, Filip Dierckx, has also suffered losses of €2 billion 
associated with the US sub-prime mortgage crisis.

Didier Reynders, the Belgian Finance Minister, last night told a 
press conference: “The important thing is that it’s a Benelux 
agreement. The governments are directly intervening to take control 
of the three banks in the three countries. We said that we would not 
leave any client by the wayside.”

Another senior Belgian politician pledged yesterday that the 
country’s Government would guarantee all deposits in Fortis. Marianne 
Thyssen, leader of Belgium’s Christian Democrats, who are in 
government, said that the step was needed to restore confidence in 
the battered bank. “The Government is ready to guarantee the full 100 
per cent,” she said.
Under Dutch and Belgian law, only the first €20,000 in bank accounts 
is insured. The pledge came as financial authorities sought to 
stabilise the wider Benelux financial system.

With €445 billion in assets under management, Fortis is seen as a key 
part of the eurozone banking system.

There were fresh signs of stress emerging in the currency bloc 
yesterday. Germany’s Hypo Real Estate was reported to be in talks 
with the German banking regulator, Bafin, about a financing squeeze.

( paragraph on US crisis!)

CAUGHT OUT BY CAMERA
[silly season scoop of fairly obvious comments on document!]
PORTAIT OF A BANK
- Fortis lost €2 billion because of the US sub-prime mortgage crisis
- The bank group was founded in 1990, but has roots dating back to 
the early 1800s
- Fortis is the biggest private sector employer in Belgium, where 
more than 1.5 million households — roughly half the country — bank 
with the group
- It has a funding base of more than €300 billion from deposits
- Employs 57,000 people
- Earned net profit of €4 billion in 2007
- Fortis has €445 billion in assets under management
- World’s 19th largest financial institution
- Based in Brussels, Belgium, and Utrecht, in the Netherlands, Fortis 
helped to take over the Dutch bank ABN Amro a year ago with RBS and 
Santander for more than €70 billion. It has struggled to raise 
funding for its €24 billion outlay for the deal
- With ABN Amro, Fortis has a presence in more than 50 countries 
Fortis’s stock market value at the end of last week was €12.3 
billion, half of what it is paying for the Dutch bank

===================
TELEGRAPH   29.9.08
Financial crisis: Benelux bank Fortis nationalised to stop collapse
Stricken Beligian-Dutch bank Fortis was bailed out by the governments 
of Holland, Belgium and Luxembourg to the tune of €11.2bn (£8.9bn) 
after investors deserted the bank last week.

    By Amy Wilson

The three countries will each take a 49pc stake in the bank in their 
respective countries. Fortis will also sell the assets of Dutch bank 
ABN Amro which it bought last year as part of a consortium with Royal 
Bank of Scotland.

Politicians and central bankers, including European Central Bank 
president Jean-Claude Trichet, held emergency talks over the weekend 
to decide the future of Fortis after the shares dropped 35pc last 
week on concern the bank may not be able to meet its funding 
requirements.

The bank's difficulties stem from last year's €24bn ABN purchase, 
which went through just before the credit crunch took hold and the 
value of financial assets collapsed. RBS would be unaffected by a 
sale of the ABN business in Holland, sources said.

French banking giant BNP Paribas reportedly pulled out of talks to 
buy Fortis after offering €1.60 a share compared with the closing 
price of €5.20 on Friday and seeking state guarantees against future 
losses. BNP and Dutch bank ING emerged as the favourite bidders in 
Dutch and Belgian media reports over the weekend.

Fortis said it will make "value adjustments'' of €5bn after tax in 
the third quarter, with write-downs on 78pc of its portfolio of 
collateralized debt obligations.

Fortis chairman Maurice Lippens was forced to resign as part of the 
state intervention. The bank had replaced its chief executive on 
Friday, when it unsuccessfully tried to reassure investors it had no 
urgent need to raise funds.

The rescue of Fortis makes it the biggest casualty of the banking 
crisis in continental Europe, where banks have largely avoided the 
wave of collapse and takeover that has affected their British and US 
counterparts since the start of the credit crunch.

Fortis has had joint headquarters in Holland and Belgium since the 
ABN takeover last year, but the rescue of the bank was of the utmost 
importance in Belgium, where the lender is the biggest private sector 
employer and around half of households bank with it.

Marianne Thyssen, chairman of the country's ruling party, said over 
the weekend that the government was "ready to guarantee the full 
100pc'' of people's savings.

After markets opened, Danish regional bank Vestjysk Bank said it was 
taking over the small beleagured bank Bonusbanken, which has run into 
trouble in the wake of the global financial crisis.
=========================
EUREFERENDUM Blog   29.9.08
EXTRACT  from The contagion spreads
--------
What is particularly interesting is the involvement in talks not only 
of national ministers, such as Wouter Bos, Dutch finance minister, 
and Nout Wellink, president of the Dutch central bank, but also the 
close involvement of Jean-Claude Trichet, European Central Bank 
president, together with Belgium's prime minister, Yves Leterme.

The Dutch EUX.TV remarks that the presence of an ECB chief at bank 
rescue talks is unprecedented and underlines the economic importance 
of the talks.

It is The Financial Times though that puts the crisis in perspective. 
Belgium, it says, is desperate to prevent a panic because Fortis is 
the country’s biggest private sector employer and handles the bank 
accounts and insurance policies of 1.5m Belgian households, or almost 
half the population.

One gets the impression that the "Europeans" have been a little 
complacent, if not smug, about the financial crisis, which has 
affected mainly the "Anglo-Saxon" systems in the US and the UK, with 
Sarkozy pointing a thinly disguised finger at the US.

Now that the crisis is on the doorstep of the EU commission in 
Brussels, however, the Euros are getting first-hand experience of it, 
which could have some repercussions. As the contagion spreads, we can 
possibly expect some more high-profile activity from the commission 
which, so far, seems to have been keeping its head down.

Are we to see commission officials in the streets with begging bowls 
or will they, as usual, be picking our pockets?