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Belgium looks for best way to save Fortis

Latest update : 2008-10-05

After the Netherlands nationalised the Dutch assets of Fortis, Belgium's government said a decision was imminent about the Belgian part of the bank amid speculation that those assets might be nationalised or sold to the French bank BNP Paribas.

The Belgian government was Saturday mulling the future of Fortis, amid speculation that it could totally nationalise the Belgian part of the troubled banking group or sell assets to BNP Paribas.

Belgian Prime Minister Yves Leterme, who held informal government budget talks in Brussels, said there might be an announcement within hours on the "capitalisation of Fortis," local television reported, the day after the Dutch government nationalised Fortis' Dutch assets.

The Dutch government's move overtook an announcement five days earlier by Belgium, the Netherlands and Luxembourg of a 11.2 billion euro part nationalisation to prevent the US-driven financial crisis from claiming another victim in Europe.

Under the original, hastily arranged, rescue deal Belgium made the biggest contribution, taking a 49 percent stake in the Belgian arm of the company, Fortis Bank NV/SA, for 4.7 billion euros.

Luxembourg's Economy Minister Jeannot Krecke confirmed on Luxembourg's RTL radio that negotiations were ongoing and that a decision was expected over the weekend.

He said his government had no wish to remain a shareholder in Fortis Luxembourg, and that it was seeking a "solid partner" for the dossier.

Asked about the possibility that BNP-Paribas could be the one he replied: "It's a possibility, but there are several".

The Belgian press reported the Belgian-Luxembourg banking group, freed from the Dutch arm, could be nationalised over the weekend or that French bank BNP Paribas, which had earlier shown an interest, or another bank should buy up its non-nationalised assets or the whole lot.

Le Soir newspaper reported that BNP Paribas officials were remaining in the Belgian capital for talks over the weekend.

A BNP Paribas spokesman in Paris refused to comment on the rumours.

La Libre Belgique paper mentioned French bank Societe Generale as also being interested in Fortis.

In general, commentators spoke of several possible scenarios for a further Fortis bailout; inclduing full nationalisation of the Belgian operation, sale of part to a major bank or, eventually, a full buy-out by BNP Paribas or another enterprise.

Fortis, caught up in the US-born international financial crisis, has seen nearly 70 percent of its share value wiped out this year.

Last Tuesday Belgium, France and Luxembourg pumping 6.4 billion euros into struggling French-Belgian banking group Dexia as the financial crisis took its toll.

Date created : 2008-10-04

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