Governments save the day for troubled Fortis
Banking and insurance group Fortis has become the latest victim of the US financial crisis, staying afloat only thanks to a tripartite government rescue package.
The governments of Belgium, the Netherlands and Luxembourg yesterday agreed to pour €11.2 billion ($19.5 billion) into the beleaguered Belgian-Dutch financial institution to partially nationalise the group.
The bailout comes after a quarter of Fortis’ value was wiped out on the stock market over the last week despite repeatedly insisting it had ample funding.
As late as last Friday, Fortis was working to dispel “rumours” in the market, “firmly denying” any problems to do with its liquidity.
Fortis shares plummeted more than 20% on Friday alone, even before it announced CEO Herman Verwilst was stepping down. Filip Dierckx will take over the role.
Belgium will take a 49% stake in the Belgian arm of the company, as will the Dutch Government in Fortis Bank Nederland Holding, while Luxembourg will buy a 49% stake in Fortis Banque Luxembourg.
The governments of Belgium, the Netherlands and Luxembourg yesterday agreed to pour €11.2 billion ($19.5 billion) into the beleaguered Belgian-Dutch financial institution to partially nationalise the group.
The bailout comes after a quarter of Fortis’ value was wiped out on the stock market over the last week despite repeatedly insisting it had ample funding.
As late as last Friday, Fortis was working to dispel “rumours” in the market, “firmly denying” any problems to do with its liquidity.
Fortis shares plummeted more than 20% on Friday alone, even before it announced CEO Herman Verwilst was stepping down. Filip Dierckx will take over the role.
Belgium will take a 49% stake in the Belgian arm of the company, as will the Dutch Government in Fortis Bank Nederland Holding, while Luxembourg will buy a 49% stake in Fortis Banque Luxembourg.