New Dexia heads promise measures soon, shares drop

BRUSSELS (Reuters) - The new chief executive and chairman of Dexia (DEXI.BR) said on Tuesday they would take measures in the coming days to secure the Franco-Belgian bank's future as its shares fell again.

They said Dexia, the world's biggest lender to municipalities, was healthy, but recognised the need to act.

"I am certain we will define in the coming days with urgency the measures to guarantee the future of the company," CEO Pierre Mariani told a brief news conference.

Shares in the bank fell to an all-time low of 5.53 euros earlier on Tuesday and closed down 12.5 percent at 5.90 euros.

Newly appointed Chairman Jean-Luc Dehaene insisted the company was healthy.

"We know we need to work rapidly with the support of the shareholders to formulate an adequate response to the difficulties that we currently face," he said.

Belgian Prime Minister Yves Leterme urged depositors not to withdraw funds from Belgian-French financial services group Dexia (DEXI.BR) DEXI.PA and vowed the government would stand by the bank.

"We will take responsibility, as we did in case of Fortis. Above all, we have to say, people should remain calm. There is absolutely no reason to withdraw deposits. Dexia is a healthy bank," Leterme said in a live interview on RTL television.

Mariani, an executive at BNP Paribas (BNPP.PA), became CEO in place of Belgian Axel Miller, who resigned last week. Former Belgian prime minister Dehaene succeeded Frenchman Pierre Richard as chairman.

Both were approved at a board meeting on Tuesday confirming an earlier announcement by Leterme. Dexia said no new announcements were expected on Tuesday.

Investors took fright after Sunday's carve-up of Fortis FOR.BR by BNP Paribas (BNPP.PA), Belgium and Luxembourg, believing a similar fate awaited Dexia.

Belgian media reported that France and Belgium, part of a 6.4 billion euro ($8.7 billion) public bailout of Dexia a week ago, were considering splitting the bank along national lines.

A Brussels-based trader said: "There's still uncertainty. Politicians keep saying they are here to save the bank. This of course just leads to more media coverage of the problems."

Leterme on Monday promised new measures to address what he described as a temporary problem at Dexia.

"In the days to come we will together take decisions, initiatives to strengthen Dexia bank," he told reporters after a meeting with French President Nicolas Sarkozy.

An official in Sarkozy's office said on Monday there was no reason to think Dexia would have to be dismantled and that France, now with a direct and indirect 25 percent blocking minority, was ready to provide further assistance if necessary.

Splitting the bank along national lines would be less palatable to the French, who would end up holding Financial Security Assurance (FSA), Dexia's loss-making U.S. bond insurance subsidiary.

Another alternative was to ring-fence FSA.

Dexia said in August that FSA would exit its riskier asset-backed business and focus on its more stable core activity of funding U.S. government bodies. However, it still has mortgage-related assets on its books.

FSA's business model is under threat if Moody's Investors Service carries out its threat to strip it of its triple-A rating. FSA and Assured Guaranty (AGO.N) are the last two established bond insurers with top ratings.

Traders and analysts made little comment about the new appointees at Dexia, although they said Dehaene was a clear political heavyweight.

Mariani, 52, is co-head of retail banking and chief of international retail services at BNP and was director of the private office of Nicolas Sarkozy when the current French president was budget minister in 1993 to 1995.

Dehaene, 68, was Belgian premier from 1992 to 1999.

(Additional reporting by Marine Hass, Paul Taylor and Darren Ennis; Editing by Erica Billingham, Paul Bolding and Sharon Lindores)