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Franco-Belgian bank Dexia posts 3.3 billion euros losses for 2008

27th February 2009, Comments0 comments

The bank's CEO Pierre Mariani offered no apology for the bank's performance but admitted corporate mistakes.

BRUSSELS - Bailed out Franco-Belgian bank Dexia on Thursday announce a larger than expected 3.3 billion euro (4.2 billion dollar) net loss for last year thanks to US sub-prime toxic assets.

Dexia suffered 3.326 billion euro losses in total, thanks largely to a 2.6 billion net loss in the fourth quarter

Those figures compared with a 2.5 billion dollars profit in 2007 including a fourth quarter profit of 587 million euros, in the days when no one knew how toxic those assets were.

The bank's CEO Pierre Mariani offered no apology for the bank's performance but admitted corporate mistakes.

The results, he said, "are evidence of the magnitude of a truly exceptional crisis and of the structural fragility developed in Dexia over recent years."

"They reflect the cost of risky developments backed by inappropriate funding and concentrated far from core markets and activities that have been the historic strength of the company."

Late last year, France, Belgium and Luxembourg injected 6.4 billion euros into Dexia and pledged to guarantee its borrowings on the markets as its shares plunged during the worst credit crisis in generations.

Under the agreement, Belgium offers guarantees for 60.5 percent of Dexia's financing, France 36.5 percent and Luxembourg three percent.

The 2008 figures was worse then the three-billion-euro loss estimated by the company late last month.

Thew difference was due to a new provision for 300 million euros for US subprime mortgage assets.

Last month Dexia announced 900 job cuts, out of 36,500 employees overall, after the eurozone entered recession.

The share dividend has been cancelled, bonuses for management scrapped and salaries for directors lowered in an economy drive to save 200 million euros.

This year also looks bleak the company said, warning that there will be "an unprecedented macroeconomic slowdown and the equity as well as the credit markets will remain deeply disrupted.

However "Dexia is in a position to regain the path to profitability," said Mariani.

AFP/Expatica

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