SHARES in Dexia were suspended yesterday as Belgium prepared to nationalise its arm of the ailing bank.
The stock plunged 17 per cent to €0.85 as tempers frayed between France and Belgium over how to divide the bill for its latest rescue.
Didier Reynders, the Belgian finance minister, said his nation did not want to bear the full cost of saving, and possibly nationalising, Dexia’s Belgian banking arm as well as supporting a “bad bank” of assets left over from the Dexia Group’s past business.
“We do not wish to end up holding the whole of Dexia Group. We need a solution that means we are not just financing the Belgian bank. We also need to finance the past. And we do not want to do that alone.”
France did not respond but sources close to the negotiations said the two nations might settle for a 50-50 split to cover the bad bank assets.
Dexia said it has begun talks with an international investor about selling its Luxembourg arm, and Qatar is rumoured to be interested in a deal priced at €900m. The bank’s board will vote on the break-up plans in Paris tomorrow.
Dexia, which passed European Banking Authority stress tests this summer, was previously bailed out with €6.4bn from the governments of Belgium, France and Luxembourg three years ago.