SNS Bank takes up government loan guarantee
SNS Bank, a subsidiary of SNS Reaal, is issuing a maximum of two billion euros' worth of bond loans guaranteed by the Dutch state.AMSTERDAM - The bank is the first to make use of the government's guarantee offer since Finance Minister Wouter Bos reached agreement with the banks on Friday.
At the meeting, the banks pledged to make use of the guarantees which are designed to get financial institutions lending to each other again. This should make it easier for businesses to borrow money.
The government offered to guarantee up to 200 billion euros of loans weeks ago but, until Monday's move by SNS, only two banks, the merchant bank, NIBC, and the car lease company, Leaseplan, had taken up guarantees. The other banks were worried about losing public confidence by being seen to be in need of government help.
On Friday, Bos extended the maximum duration of the guarantees from three to five years. He says all banks in the Netherlands will eventually make use of the government support either as lenders or borrowers.