Dexia to take €3.6bn hit ahead of asset sale

Belgian financial group Dexia has said it will speed up the sale of its non-core assets to improve its profits and liquidity in order to negotiate an exit from its bailout programme.

But it will take an estimated €3.6bn (£3.1bn) hit in the second quarter of this year as part of the process of accelerating its financial restructuring, as set out by the European Commission last year.

The charge will be incurred as it adjusts the book value of a number of assets ahead of their sale. Changes to the net book value of assets in its financial products portfolio, to market value ahead of their sale will cost it €1.8bn, it said in a statement.

Dexia said its board had approved the acceleration of its sale programme, which would also see it exit certain guarantees from Belgium and France.

The implementation will be concentrated mainly this year and in the first half of 2012 depending on market conditions, but any asset sales will not affect the group’s Tier 1 capital ratio, which will remain at 12 per cent.

Dexia has cut €124bn from its balance sheet since 2008 by disposing of operations in the US and has improved its deposit book to make its structure less risky.

The partly state-owned group received €6bn from France and Belgium at the height of the financial crisis.