dexia sa
BRUSSELS(Dow Jones)--Belgian-French bank Dexia S.A. (DEXB.BT) Wednesday said its net income in the fourth quarter fell 72%, mainly due to lower revenue from its treasury division and a 38 million euro ($52.2 million) currency cost.
Net income for the quarter was EUR56 million, down from EUR202 million a year earlier.
Analysts were expecting net income of EUR181 million.
Revenue for the quarter was EUR1.21 billion, down 18% from the quarter a year ago. Part of the difference is due to a gain in the fourth quarter of 2009 from the sale of Dexia's stake in Credit du Nord. The other main driver was lower revenue at the treasury division, Dexia said.
The bank said it is adopting more conservative assumptions for the performance of its mortgage-backed securities portfolio. Dexia is now assuming that default rates in the U.S. won't improve within the next three years and will need four years to return to default rates seen before the crisis.
The changes will increase the total losses it expects on the portfolio by $588 million to $1.8 billion, Dexia said. The changes will reduce its deferred tax assets by $135 million, the bank said.
"All these adjustments will have no impact on our regulatory solvency ratio," Chief Executive Pierre Mariani said.
The reserve Dexia set aside for losses on its portfolio of available-for-sale securities, which includes the billions in euro-zone sovereign debt, was EUR3.9 billion at the end of December.
Dexia also said it has formed a team in 2011, based in New York, to recover more value on its portfolio of U.S. residential mortgage-backed securities. Part of that effort is a lawsuit filed by Dexia and 12 other large investors in January against mortgage company Countrywide Financial, now a unit of Bank of America Corp. (BAC), related to residential mortgage securities Dexia bought in 2005-2007.
Dexia said it plans to ask its board of directors for permission to increase its capital by EUR280 million through issuing bonus shares to its existing shareholders.
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al momento paga sicuro fino al 02/11/2011
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