AMSTERDAM – Dutch bancassurer SNS Reaal NV (SR.AE) may be ordered by the European Commission to take additional measures on repaying government aid if it fails to meet its deadline of the end of 2013, Chief Executive Ronald Latenstein said Tuesday.
Latenstein said it is becoming increasingly difficult to pay back the debt and that the European Union's antitrust regulator may require SNS Reaal to take extra steps.
"I don't know what kind of measures it would involve. It depends on how the commission will assess the case at that moment," he told analysts at the presentation of SNS Reaal's first-quarter results.
SNS Reaal still owes the Dutch state EUR848 million from the bailout it received during the 2008 financial crisis. Like other bailed out banks, including its bigger Dutch peer ING Groep NV (INGA.AE), its repayment plans have been frustrated by the market volatility, a weakening economy and stricter capital requirements. But SNS Reaal's problems are aggravated by persistent losses on real-estate loans, which have hampered its capacity to generate capital.
The company is close to completing a program to free up EUR700 million and is negotiating pay cuts with its staff. It will also explore options to further bolster its capital position, it said Tuesday, without elaborating.
However, analysts questioned whether the plans are enough to meet the deadline.
Hans Pluijgers of Cheuvreux said SNS Reaal could face a capital shortfall of at least EUR300 million by the end of 2013. "Therefore we can not rule out significant additional restructurings or a massive share issue, which could more than double the number of shares outstanding," he said.
SNS Reaal Tuesday reported a 8% drop in first-quarter net profit of EUR23 million, mainly because of higher impairments at its banking arm. The company said funding markets remained challenging during the period and that its main funding sources were retail savings and cheap loans from the European Central Bank's three-year financing program.
SNS Reaal is the only big Dutch bank that tapped the ECB's liquidity facility, known as the long-term refinancing operation after borrowing EUR1.5 billion in the first round. It didn't disclose the amount it tapped in the second tranche.
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è di un mese fa!
