Dutch state seizes DSB Bank
THE Dutch Central Bank (DNB) has seized control of floundering financial institution DSB Bank, after the firm’s consortium of lenders failed to agree on a rescue plan amid a slew of deposit withdrawals.
The DNB went to a Dutch court to seek permission to take control of DSB, in the wake of mass withdrawals from the bank, which has a balance sheet worth around €8bn (£7.5bn).
DSB’s woes began last week when the Dutch regulator AFM launched a probe into whether the bank had attempted to sell overpriced insurance policies to its mortgage clients.
Dutch consumer bodies have been advising customers to withdraw their funds in recent weeks, putting further pressure on the firm’s solvency.
The firm’s five lenders – ING, Rabobank, Fortis Bank, ABN Amro and SNS Reaal – met over the weekend to find a rescue solution but the Dutch finance ministry said they decided it was too risky to plough more funds into it.
The Dutch government said yesterday the bank – the first Dutch lender to fail during the recession – collapsed not because of the credit crisis, but due to poor management.
“This is about an individual, relatively small bank that brought itself into trouble by its policies, customers walking away, unclear communications, and all the uncertainty that was created because of that,” said Dutch finance minister Wouter Bos.
The bank is expected to shed some of its 2,000-strong workforce.