DSB Bank Placed Under Dutch Central Bank Management
Oct. 12 (Bloomberg) -- DSB Bank NV, run by the owner of theDutch national soccer champion, has been placed under thecontrol of the central bank as the outflow of capital threatenedthe bank’s existence.
“This outcome was inevitable,” the Dutch finance ministrysaid in a statement on its Web site today. The central banktoday said the solvency of closely held DSB Bank is under“great pressure,” revising an Oct. 1 statement that the lendermet requirements for solvency and liquidity.
Banks in Europe have written down more than $500 billion inlosses since the beginning of 2007 amid the financial crisis.The Netherlands bought Fortis’s Dutch banking and insurancebusinesses and its stake in ABN Amro Holding NV last year for16.8 billion euros after the company ran out of short-termfunding as customers withdrew deposits and investors lostconfidence. The state also extended a 10 billion-euro ($14.8billion) lifeline to ING Groep NV.
Parent company DSB Groep NV, based in Wognum, theNetherlands, sells loans, insurance and mortgages throughtelephone call centers, direct mail and the Internet. Founderand Chief Executive Officer Dirk Scheringa is chairman of the AZsoccer team, which he bought in 2005. DSB had net income of 45.5million euros last year.
DSB, the Dutch central bank and the Finance Ministry triedto sell the bank over the weekend to a group of five banksincluding ING Groep NV, ABN Amro, Rabobank, Fortis BankNederland and SNS Reaal NV, the Dutch central bank said in astatement on its Web site. “The risks were too big and therequest for the emergency procedure proved inevitable,” theAmsterdam-based central bank said.
Possible Claims
“It’s very unjust that this has happened,” Scheringa, CEOof DSB, said in an interview broadcast by Dutch televisionstation RTL. “We considered the problems not to be grave, sonot a lot is needed to make this work again but people need tocooperate.” He said the bank had 4.2 billion euros in deposits,while 600 million euros had been taken out.
The sale to the group of banks failed because there wasuncertainty about possible claims on DSB for lending too much,failing to meet its responsibilities to clients and possiblelosses on credits, the central bank said. DSB’s problems weren’tcaused by the global credit crisis, Finance Minister Wouter Bossaid at a press conference in Amsterdam.
Dutch financial regulator AFM in July said it fined a unitof DSB Groep NV 120,000 euros for not meeting rules on mortgagelending and advising of clients.
The court appointed two administrators for DSB Bank and isin the process of naming administrators for DSB’s insuranceunits, the central bank said.
The emergency procedure, which places DSB Bank under thecontrol of the central bank, prevents clients from accessingtheir accounts, the central bank said. The central bank expectsto open the deposit-guarantee procedure shortly. Private depositsup to 100,000 euros are guaranteed by the Dutch government.
To contact the reporter on this story:Jurjen van de Pol in Amsterdam jvandepol@bloomberg.net
Last Updated: October 12, 2009 08:17 EDTSource: Bloomberg
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