Belgium

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.

Dexia, the bailed-out Franco-Belgian lender, said on Wednesday it was looking into a severance package granted to former chairman Pierre Richard, forced to resign after the group's initial rescue, Reuters reported. The French government, which injected 3 billion euros ($3.94 billion) into Dexia's 2008 rescue alongside 3.4 billion from Belgium and Luxembourg, earlier this year asked the bank to examine how it could recover funds paid to the former chairman as part of his exit package. Newspaper Le Monde reported that Dexia's board had mandated a labour law specialist to look into the case.

Holders of a junior-ranking Dexia bond are escaping the rough treatment meted out to bondholders of low-ranking Irish bank notes after Dexia Bank Belgium announced it would buy back a deeply subordinated issue at 25% of par, Reuters reported. While the tender price set by Dexia Banque Belgium may appear less generous than what other European banks have recently offered for their subordinated debt, it is more generous than what subordinated debt holders of Irish bank paper were offered in 2010/2011.

Belgium's economy fell back into recession at the end of 2011, reversing the strong growth it had seen in the first half of the year as the country became the latest to fall victim to the euro zone's twin fiscal and banking crises, The Wall Street Journal reported. Preliminary data released by the central bank on Wednesday showed the economy contracted on a quarterly basis for the second straight quarter in the final three months of 2011.

Dexia SA, the French-Belgian lender that’s being broken up, said it won’t have to comply with capital rules set by the European Banking Authority because it’s planning to “radically shrink in size,” Bloomberg reported. The EBA, Europe’s banking regulator, said today that Dexia would need to raise 6.3 billion euros ($8.4 billion) by mid-2012 to reach a 9 percent target for core Tier 1 capital after markdowns of sovereign-debt holdings, a figure the company said shrank to 4.2 billion euros after the Belgian government’s takeover of Dexia Bank Belgium SA on Oct. 20.

Dexia SA, the Belgian-French bank navigating a government-orchestrated dismantling, Wednesday booked a EUR4.1 billion ($5.6 billion) loss on the sale of its Belgian subsidiary and a EUR2.3 billion loss on its holdings of Greek sovereign debt, Dow Jones Daily Bankruptcy Review reported. Dexia didn't report third-quarter earnings because of the break-up, which will see the bank's public finance business sold to French savings banks and other businesses sold off once buyers are found.

For the first time, the estimated 700 financial industry lobbyists working in Brussels can now expect to meet with some resistance. Though extremely outnumbered, the new organization Finance Watch is preparing to confront them head-on -- with a former industry insider at its helm, Spiegel Online reported. Indeed, some things will take getting used to in the offices Finance Watch has just leased near the building housing the European Parliament in Brussels. The project is backed by 40 European organizations, including unions, consumer-protection groups, foundations and think tanks.

Dexia, the stricken Franco-Belgian lender that has been at the centre of recent market turmoil, loaned €1.5bn of fresh capital to its two largest institutional shareholders which then used the cash to buy Dexia shares before 2008, the Financial Times has learnt. The unorthodox funding move, which raised the Belgian regulators’ concerns at the time, amounted to Dexia borrowing money from itself to finance a capital increase. This is illegal in most jurisdictions and is now banned in the European Union, but did not break Belgium’s existing laws.

European competition authorities on Monday gave temporary approval to Belgium's nationalisation of Dexia's Belgian unit under a rescue plan of the Franco-Belgian banking group, Agence France-Presse reported. The European Commission gave the Belgian government six months to provide a new restructuring plan for Dexia Bank Belgium, saying it was too soon to determine if the 4.0-billion-euro acquisition complies with EU state aid rules. "The Commission acknowledges that the measure is necessary to preserve financial stability," the European Union's executive arm said in a statement.