Belgium

Brussels is to propose giving itself powers to wind up failing eurozone banks, in an uncompromising banking union plan that pays little heed to Germany’s legal and political concerns. According to a summary of the “single resolution mechanism” proposal seen by the Financial Times, power to shut down banks would be centralised in the European Commission. Brussels would have the clout to overrule the bank’s home country and use funds from a central pot. The blueprint for the resolution authority is due to be published this month.

Belgium-based Alfacam , the provider of Europe's largest fleet of outside broadcast vans, said it may have to file for bankruptcy if a final bid for protection under Belgian law fails, Reuters reported. The company, which also provides broadcast services and TV studios, was granted creditor protection in October and has been seeking investors since then. It released the statement after talks with creditors and investors failed. "No agreement has been found about a solution between all the parties involved in this negotiation," it said.

Belgium-based television services company Alfacam Group said on Wednesday that its bank lenders had decided to cancel its credit lines, leaving it scrambling to find a new investor, Reuters reported. Alfacam, which was granted creditor protection in October, said in a statement that its banks had decided not to extend suspension of debt repayments beyond March 31. The provider of broadcast services, TV studios and Europe's largest fleet of outside-broadcast vans signed a memorandum of understanding in December with its banks and Indian family-owned conglomerate Hinduja Group.

Ailing Franco-Belgian lender Dexia SA received the green light from European Union regulators for a restructuring plan that will see large parts of the bank closed, The Wall Street Journal reported. The move will help bring to a close a long-running probe into Dexia, one of Europe's first casualties of the financial crisis, which last month received its third government bailout in four years. European Commission antitrust chief Joaquín Almunia said he expected to give final approval for the restructuring measures on Dec. 28.

France and Belgium Thursday agreed to inject a further €5.5 billion ($7 billion) into Dexia SA, putting one of the first European banking casualties of the 2008 financial crisis almost entirely in state hands and adding to the burden of cutting government debt and deficits amid the euro-zone recession, The Wall Street Journal reported. France agreed in the wee hours of the European morning to provide €2.59 billion and Belgium €2.92 billion in exchange for preference shares.

The past few months have been good for Belgium. Like France, the country has benefitted from being part of the euro zone’s so-called “soft core,” becoming a sort of second-best safe haven for investors keen to escape the risky states such as Spain or Italy, but unwilling to accept the super-low interest rates offered by the likes of Germany, The Wall Street Journal Real Time Brussels blog reported.

Two Chinese private equity funds are closing in on a deal to buy the asset management arm of Dexia, highlighting the interest of Asian buyers in European financial assets as banks look to restructure in the wake of the financial crisis, the Financial Times reported. If the sale of the business for about €500m is completed, it would mark the last stage of a break-up of the twice-bailed-out Belgo-French bank, one of the biggest European victims of successive financial crises during the past four years.

France, Belgium and Luxembourg, which own Dexia, the lender that is being broken up, have agreed to boost state guarantees to the ailing bank by €10bn to €55bn, it was disclosed on Wednesday, the Financial Times reported. The decision followed Monday’s meeting between Pierre Moscovici, France’s new finance minister, and his Belgian counterpart, Steven Vanackere, in Brussels. The European commission “temporarily approved” the €10bn increase in guarantees “in order to preserve financial stability”.

Struggling lender Dexia SA said it is in exclusive talks to sell its Turkish Denizbank AS unit to Russia's biggest bank, OAO Sberbank, as the Belgian-French bank continues to sell assets to shore up its balance sheet, The Wall Street Journal reported. No financial information was disclosed, but a person familiar with the talks said a deal could be worth between $3 billion and $4 billion and be "the biggest in Sberbank's history." The details are to be ironed out in the next two weeks, the person added. State-controlled Sberbank is Russia's oldest and largest bank.

KBC Bank Ireland will receive further capital from its Belgian parent this year as loan losses will fall but remain high, chief executive John Reynolds has said, the Irish Times reported. The Irish bank received €75 million from KBC Bank in the first quarter of this year as arrears rose on the Irish residential mortgage portfolio of €13 billion. This was the first cash injection by the Irish bank’s parent since 2008. KBC converted almost €300 million of subordinated debt loaned to the Irish unit into capital earlier this year.