BELGIUM'S GOVERNMENT yesterday scrambled to reassure depositors at Fortis that their savings were safe as the Belgian-Dutch bank struggled to dispel rising fears in markets about its liquidity.
"We guarantee that no client, no saver, would be left in the cold," Didier Reynders, Belgium's finance minister, said after a cabinet meeting.
Fortis's share price fell for a fifth successive day, slumping by as much as 14 per cent to a 14-year low of €5.50, and credit default swaps rose sharply on Fortis's debt.
Banking analysts said the deepening concerns about Fortis's condition could be traced to its purchase last year of parts of ABM Amro, its former Dutch rival, which left Fortis's finances severely strained just as global markets were entering a period of extraordinary upheaval.
Fortis denied yesterday it had liquidity problems, and said its retail and private banking customers had withdrawn less than 3 per cent of their total holdings since the beginning of this year.
Fortis - which is a partner with An Post in Postbank - also said it intended to broaden a previously announced asset-disposal programme and sell as much as €10 billion worth of its banking, insurance and other businesses.
"Stock price evolutions these days reflect, in the first place, lots of nervousness and emotions," Herman Verwilst, Fortis's chief executive, told a news conference. "We are flabbergasted by what is reflected in the market capitalisation of Fortis."
Belgian and Dutch financial regulators said they were monitoring events at Fortis, which has been under intense market scrutiny after it announced a €8.3 billion recapitalisation in June, suspended dividend payments and sacked Jean-Paul Votron, its former chief executive.
Nout Wellink, the Dutch central bank president, yesterday cancelled an appearance at a Chicago banking conference to return to the Netherlands.
Fortis sought to calm fears that it would get rid of some assets at fire-sale prices by saying it would not need extra capital for another 12 to 18 months.
Fortis paid €24 billion for its share of the ABN Amro deal, and analysts said it faced the challenging task of raising €5 billion over the next 12 months to cover the integration of these businesses.
- (Financial Times service)
