After months of speculations in the Dutch press, the financial group SNS Reaal NV has been nationalized. The group comprises SNS Bank, ranked fourth in the chart of the financial institutions considered of systemic importance in Holland.
The bank's equity fell almost to zero under the burden of the losses generated by its loan and real estate investments portfolios, and the negotiations with private investors have yielded no results.
News has appeared in the Dutch media concerning the interest of the top three banks in the Dutch banking system - ING Groep NV, ABN Amro and Rabobank NV - for the acquisition of parts of SNS. However, the European authorities have prohibited ING and ABN to participate in the rescue of SNS, because they have benefited from government support, according to Associated Press.
Bloomberg writes that this will cause the bank's shareholders to lose all their money, as well as the holders of the subordinated bonds issued by the bank. The owners of the other types of bonds issued by SNS Bank will not suffer following the nationalization.
What are the causes of discrimination? Perhaps a recent warning issued by the ratings firm Fitch. In an interview recently given to the Dutch newspaper Financieele Dagblad, Bridget Gandy, an executive at Fitch, said that "if an important country in Europe forces losses upon the bondholders, this will fundamentally change the way we look at European banks".
The main estimates concerning the losses pertaining to the portfolio of real estate assets of the SNS bank amounts to 3.2 billion Euros, and the government has announced that the recapitalization will reach 3.7 billion Euros and will lead to an increase in the budget deficit for the year 2013. The estimates of December 2012 predicted a budget deficit of 3.3% of the GDP for the year 2013.
Aside from the direct recapitalization
