It was a tough day for European financial-services firms on Saturday, with Dutch-Belgian bank Fortis and U.K. mortgage lender Bradford & Bingley talking with their respective country governments about ways to stay afloat.
The day after Fortis ousted its interim CEO, Herman Verwilst, Belgian banking authorities were reportedly holding talks with the embattled bank in a bid to bolster its slumping share price and stave off insolvency.
The executive shakeup, announced after trading hours on Friday, elevated the head of the banking unit, Filip Dierckx, to the top position at the company whose share price is down 71% year to date.
Veerle De Schrijver, a spokeswoman at the Belgian Banking Finance and Insurance Commission, told the Associated Press that Dutch-Belgian bank and regulators were trying before markets reopened Monday to find a way to stop it from falling victim to the credit crisis.
Media reports suggested that the firm could be taken over by another European bank, such as BNP Paribas (BNP), ING Groep (ING) or HSBC Holdings (HBC).
Other possible scenarios included selling off Fortis assets such as its profitable insurance arm or recruiting fresh investors, Dutch daily Financieele Dagblad reported, citing sources from partially Fortis-owned institution ABN Amro.
Fortis has been in difficulty since it took part in a three-bank consortium last year that acquired ABN Amro, a EUR70 billion (US$111 billion) deal that was the largest takeover in the banking industry.
On the other side of the Channel, The Wall Street Journal reported that the U.K. government will nationalize mortgage lender Bradford & Bingley, citing a person familiar with the matter.
B&B’s stock price has fallen 28% in the past week amid worries it won’t be able to tap into enough funding to stay solvent.
A spokeswoman for B&B said the bank was in talks with the Treasury and there could be an announcement Sunday, the Journal reported.
B&B is a major provider of mortgage loans for rental properties, but it has suffered more than most companies amid the downturn in the U.K. housing market. A recent Credit Suisse report said that arrears on the firm’s GBP40 billion (US$73.7 billion) mortgage-loan portfolio are nearly double the industry average.
If the nationalization occurs, it would be the U.K. government’s second this year. Mortgage lender Northern Rock was nationalized in February after it suffered a bank run.
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