The shock of Sunday's €11.2 billion partial nationalisation of Fortis rippled through the Belgian-Dutch financial group's business today, with $4 billion in asset sales halted.
The Belgian and Dutch governments, now Fortis's largest shareholders, were also stepping up their scrutiny of the group.
Amongst the asset sales, Fortis scrapped a €2.15 billion deal to sell half its asset management arm to Ping An Insurance, citing late last night "severe market disruption and the ongoing uncertainty in the global capital markets."
But shares in Fortis were up 9.5 per cent in Brussels at €4.71 on the news that the Dutch central bank was withholding approval for the group's other sale of €709 million worth of ABN AMRO assets to Deutsche Bank.
Fortis had been forced to sell at a loss part of its Dutch business serving corporate clients to Deutsche Bank to comply with antitrust demands made by the European Commission after it bought ABN AMRO.
But the Dutch central bank has now halted the sale of those assets due to "exceptional circumstances on international financial markets, the uncertainty with regard to the future shareholder in ABN AMRO and the implications of this uncertainty for all parties involved."
Fortis is seeking a buyer for ABN AMRO only a year after winning control in a €70 billion consortium buyout of its Dutch rival.
Investors had lost confidence in Fortis as it tried to absorb ABN AMRO and raise money while the global credit crisis deepened and forced it to take write-downs.
That prompted the governments of Belgium, the Netherlands and Luxembourg to rescue Fortis on Sunday with an €11.2 billion capital injection.
If the sale to Deutsche Bank is scrapped, Fortis may get a capital boost as the deal involves a loss of €300 million to Fortis.
Although Fortis secured a government lifeline, the flurry of announcements late last night showed the growing repercussions of the partial privatisation on related deals around the world.
Reuters