Franco-Belgian Dexia bank to sell more bad debt
The board of Franco-Belgian investment bank Dexia, which narrowly escaped collapse in the 2008 financial crisis, Tuesday denied talk of an impending split while confirming a continued sale of assets.
"Contrary to certain rumours the board of directors and Dexia shareholders, both public and private, exclude any scenario involving a demerger of the group," board president Jean-Luc Dehaene said in a statement.
"It is as a whole that the Group must manage the heritage of the past and work to guarantee its future," he added.
The statement added that the board welcomed a May 27 decision aiming at "the acceleration of the legacy deleveraging ... had borne fruit."
"The group is determined to continue with this policy."
On Monday, French daily Les Echos said the bank, having disposed of about 80 billion euros ($107 billion) worth of toxic loans, now planned to offload another 20 billion euros' worth.
The source said that even though Dexia might take a loss of up to 10 percent on the sale of the bad assets, it would still be worthwhile so as to improve the bank's financial position, at a time of great stress on the markets.
French banks have come under intense pressure to strengthen their capital base given concerns over their exposure to weak eurozone countries, especially Greece.
Press reports at the weekend suggested Dexia could also be looking at a tie-up with French state controlled banks.
One report said France was planning a 10-15 billion euro recapitalisation for five top banks struggling with the eurozone debt crisis.
The Journal du Dimanche (JDD) Sunday newspaper said the state had made the offer during a September 11 meeting with top officials from five banks -- BNP Paribas, Societe Generale, Credit Agricole, BPCE and Credit Mutuel.
The weekly said the plan was rejected by Societe Generale.
Issuing what it called a "formal denial," the finance ministry said the government had held talks with leading banks on their state of health but denied the bailout offer.
All the concerned banks declined comment on the JDD report, which cited sources in the Elysee presidential palace and in banking circles.
© 2011 AFP