On Friday 1 February 2013 the Dutch State nationalized the SNS
Reaal bank and insurance group by expropriating shares, core tier 1
securities and other subordinated debts issued by the SNS Reaal
group (some of which are listed on Euronext Amsterdam). This
nationalization, which is combined with additional capital
injections and write-offs on earlier capital injections from the
Dutch State, aims to save the SNS Reaal group from insolvency and
thus safeguard the stability of the Dutch financial system.
According to the Dutch Minister of Finance, the measures taken are
required to resolve the capital deficiencies caused by losses on
SNS Property Finance's real estate portfolio. SNS Bank is the
fourth largest bank of the Netherlands.
By nationalizing the SNS Reaal group, the Dutch Minister of Finance
has for the first time used its powers under the Dutch Intervention
Act. The Dutch Intervention Act entered into force on 13 June 2012,
with retro-active effect as of 20 January 2012. It introduced
far-reaching intervention powers for both the Dutch Central Bank
(DNB) and the Dutch Minister of Finance with respect to financial
institutions. It also contains statutory restrictions for
counterparties on exercising contractual rights triggered by such
intervention measures or related events (such as close-out
following an event of default triggered by intervention measures).
These restrictions apply to counterparties of the financial
institution's affiliates as well. Further information on the
Dutch Intervention Act is given in our
newsletter of 28 June 2012.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.