Of Special Interest
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
24th February 2012
Dexia €11.6bn LOSS
Dexia Group reports a LOSS of €11,639m (£9,848m $15,480m ¥1,242bn Y97,520m) for 2011. The parts of Dexia acquired by the Luxembourg and Belgium authorities are shown as discontinued operations. The remainder, including Dexia Municipal Agency, are to be split amongst different French state-owned financial institutions.
The results are not approved by the auditors. Dexia states that the auditors intend to approve the accounts with a qualification referring to the fact that the operation is shown as an ongoing one when this may not the case. The fact that the auditors had not approved the accounts was missed from the original dissemination of results.
Greek debt writedown of 75% of nominal value accounts for a at least €4.5bn of charges. The Greek costs are split between those shown in discontinued operations, in year end under Greek writedown and hedging losses. Whilst the Greek crisis may have been the final straw forcing state intervention many in the market had believed that Dexia would fail because it had been allowed to carry assets at unrealistic values by the authorities since the first rescue. In June the bank was forced to write down €1.745bn on €17.6bn transferred from long term hold to the 'for disposal group' for capital adequacy reasons. The significance is that the long term hold assets do not have to be marked to market whilst held for sale does.
The European Commission has allowed France, Belgium and Luxembourg to offer guarantees on Dexia business whist the restructuring plan is finalised. The EC is likely to have concerns about some aspects of the future plans for the group. In particular the French plan to split ownership of Dexia four ways in order to escape any one organisation having to show the business on balance sheet.