Court declares Dutch bank DSB bankrupt

19th October 2009, Comments 0 comments

A Dutch judge declared ailing bank DSB bankrupt after last minute rescue bids at the weekend failed.

The Hague – A Dutch judge on Monday declared ailing bank DSB bankrupt after it failed to find a new buyer in the face of client withdrawals this month totalling EUR 600 million, a court statement said.

"The court comes to the conclusion that everything possible was done to save the bank, but that there are no prospects of that being achieved," said a statement from the district court in Amsterdam.

"For that reason, the court declared DSB bankrupt."

On Thursday, the court gave DSB until noon on Friday to find a buyer, but bank boss Dirk Scheringa convinced it to give him until Monday morning -- reportedly for an interested American firm to scrutinise his books.

The other plan of asking the government for a capital injection of EUR 100 million was also rejected as EU rules state that the government can only stepped in to help a struggling financial institution can only be helped if its problems have been caused by the credit crisis.

DSB was placed under administration at the behest of the Dutch central bank (DNB) last Monday, freezing all its activities and client accounts.

Two independent administrators were appointed, who subsequently approached the court with an application for bankruptcy.

The bank, which has about 2,000 employees, has recently been in the news over claims it sold clients insurance policies they did not need and extended mortgages they could not afford, prompting some to lodge claims for damages.

Account holders withdrew some EUR 600 million in two weeks earlier this month, about a sixth of the bank's deposits.

DSB bank, which recorded a net profit of EUR 45.4 million in 2008, claims to hold 17 percent of the Dutch consumer credit market. It has about 350,000 clients and is the main sponsor of top Dutch football club AZ Alkmaar.

Account holders will be able to claim up to EUR 100,000 under a government deposit guarantee system.

AFP / Expatica

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