The Netherlands has nationalised banking and insurance group SNS Reaal at a cost of 3.7bn euros ($5bn), Finance Minister Jeroen Dijsselbloem said, marking a rescue to avert a threat to the Dutch financial system.
“Today, SNS Reaal has been fully taken over by the Dutch state. I have nationalised SNS Reaal,” Dijsselbloem told a press conference on Friday, after a deadline expired to find a solution for the distressed bank.
“With the Dutch Central Bank’s deadline passing last night and without finding a solution there was an immediate and dangerous situation for financial stability,” Dijsselbloem said.
“I had to conclude that nationalisation was inevitable.”
The bank is the fourth-biggest in the Netherlands, and the finance ministry said in a statement that savings deposited there were safe.
The bank “came into acute need because of problems with its property portfolio,” it said.
The Netherlands is a member of the eurozone, and the minister has just been appointed head of the Eurogroup of eurozone finance ministers.
‘Too big to fail’
SNS Reaal is considered a systemically important bank, meaning it is too important to be allowed to go bankrupt.
Dijsselbloem said SNS Reaal’s chief executive officer and chief financial officer had resigned.
“I can fully understand people’s resistance in the fact that once again a large amount of money is needed to save a bank – and especially now that when we are going through a financially difficult time,” Dijsselbloem said.
Shares in SNS Reaal have plunged in recent days amid speculation that the government would nationalise the bank.
Dijsselbloem said the $5bn would consist of a $3bn capital injection, $1bn to write off previous state support and $950m to isolate the bank’s problematic property portfolio.
“The state will also supply 1.1bn euros [$1.5bn] in bridging credit and 5.0bn euros [$6.8bn] in guarantees,” Dijsselbloem said.
In January, the European Commission blocked a plan by three other Dutch banking giants, ABN Amro, ING and Rabobank to help SNS with a capital investment, on competition grounds saying that ABN and ING had themselves previously received state aid.