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Another one bites the dust - Fortis Monday, October 06, 2008

After a turbulent week for Fortis, it finally ceased to exist last night. Following the nationalisation of the Dutch operations of the Bank on Friday, the Belgium Government's urgent hunt for a buyer for the remainder was concluded last night when BNP bought the remainder of Fortis in an all share deal.

This has ramifications in many areas of the banking and securities industries including

the impact on the RBS consortium that bought ABN, of which Fortis was a part
the new exchanges such as Chi-X which rely on Fortis to provide central counterparty services, albeit BNP will almost certainly wish to continue with this service

At the same time, there will inevitably be job losses as overlapping/duplicated functions between Fortis and BNP are phased out.

UPDATE
It appears that European Multilateral Clearing Facility, the Fortis Bank subsidiary that provides clearing services to Instinet Chi-X and Nasdaq OMX, has been passed to the Dutch government as part of the EUR16.8 billion rescue package.

Labels: ABN Amro, Belgium, Fortis, Royal Bank of Scotland

posted by John Wilson @ 7:43 AM Permanent Link ,

newsvine reddit

First Fortis, now Dexia & 6 Irish Bank also get State suppport Tuesday, September 30, 2008

The contagion continues to spread. After Fortis received an equity injection from three Governments yesterday, Dexia has followed suit except this time by France, Belgium and Luxembourg.

Ireland has also underwritten its' six largest financial institutions by guaranteeing deposits, covered bonds, senior debt and dated subordinated debt [nationalisation in all but name]. The institutions will be charged for this guarantee.

Hypo Real Estate, one of Europe’s biggest commercial property and public sector lenders, was handed a €35bn liquidity lifeline by other German private sector banks, the Bundesbank and the ECB. The lender is also selling €15bn of assets to cover its liquidity shortfall.

What is notable is that these institutions features at or near the top of a table produced by Cazenove analysts courtesy of FT Alphaville.

Ranking by ratio of debt to equity