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Benelux comes to aid of Fortis

News item | 29-09-2008

The Netherlands, Belgium and Luxembourg have together pledged to inject a total of 11.2 billion euros into the banking and insurance group Fortis, to protect the interests of account holders and insure financial stability.

On 28 September 2008, Dutch Minister of Finance Wouter Bos and Nout Wellink, the president of the Dutch central bank, took part in high-level talks in Brussels on the future of Fortis.

Last week, shares in the Belgian-Dutch group had dropped significantly in value.

The governments of the Netherlands, Belgium and Luxembourg are joining forces to solve the bank's problems. Together, they are investing 11.2 billion euros to shore up the bank's position.

The Dutch government is investing 4 billion euros in Fortis Bank Nederland, in exchange for a 49% interest. Belgium is investing 4.7 billion euros in Fortis Bank NV/SA, and Luxembourg 2.5 billion euros in Fortis Banque Luxembourg.

Fortis is selling the stake in ABN AMRO which it had acquired in 2007.

It was also agreed at the high-level meeting that the chairman of the board of directors of Fortis, Maurice Lippens, would step down.

Response from the Minister of Finance

According to Mr Bos there was no alternative: 'We could have done nothing, but in that case Fortis might not have survived past Monday morning.'

Bos stated that many Dutch savings account holders and businesses are dependent on Fortis. The bank also fulfils an important function with respect to inter-bank transactions throughout Europe. 'If this institution collapses, money transfers throughout Europe will be in trouble.'

According to the Ministry of Finance the solution offers a 'solid guarantee' to ensure financial stability and protect the interests of account holders at Fortis and ABN AMRO.