“The Dutch state Friday nationalized troubled banking and insurance company SNS Real NV following unsuccessful talks with private investors on a capital boost after heavy outflows of deposits had pushed the lender close to collapse in recent days.
“The Dutch state will inject €2.2 billion ($2.98 billion) of new capital into SNS Reaal, write off €800 million from an earlier bailout and will write down €700 million on the value of SNS Reaal’s property loans. The government will also provide an additional €6.1 billion in loans and guarantees, Finance Minister Jeroen Dijsselbloem told a news conference.
“Nationalization became inevitable after SNS Reaal experienced heavy outflow of deposits in the past days, he said. “Without a solution, SNS Reaal would have gone bankrupt, and put the financial system in severe and immediate danger.”
“The government used a new bank law, which allowed it to expropriate shareholders and investors in subordinated debt. The law came into force last year and was aimed at giving the state more powers to intervene in troubled banks and protect depositors.”
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