SNS Reaal shares drop on investor forecast of more state aid

AMSTERDAM Fri Nov 23, 2012 10:12am EST

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AMSTERDAM (Reuters) - Shares in Dutch bancassurer SNS Reaal SR.AS fell on Friday after a high-profile local investor predicted it would require further state aid before the end of the year.

Peter Paul de Vries, former head of Dutch private shareholder association VEB, told Dutch broadcaster RTL 7 he expected SNS Reaal would need state support.

"There is no other option than to go to the state," he said.

SNS Reaal declined to comment on De Vries' remarks and reiterated it would come up with a restructuring plan by early next year.

The firm, which issued a profit warning on November 6, said at the time a solution would probably consist of a combination of measures, including asset sales, set limits on its property credit risks, a share issue and the conversion of state aid into other shares.

SNS Reaal shares were down 4 percent at 0.949 euros by 1504 GMT, having fallen as low as 0.923 euros, their lowest since July and a fraction of their 18.73 euros peak set in 2007.

Dutch deputy prime minister, Lodewijk Asscher, declined to comment when asked by reporters about SNS Reaal's financial health.

De Vries, also chief executive of investment holding company Value8 DRIE.AS, said he did not own any SNS Reaal shares.

Rating agency Moody's on Wednesday warned of an increased chance SNS Reaal might need external support to cope with potential commercial real estate losses and preserve the solvency of its bank.

SNS Reaal's property finance exposure, including commercial real estate loans to small- and medium-sized companies, was 9.8 billion euros ($12.6 billion) at the end of September, of which 2.3 billion were non-performing loans.

Since 2009, net losses on property finance loans have amounted to 1.3 billion euros, up to and including the third quarter of 2012. ($1 = 0.7761 euros)

(Reporting by Gilbert Kreijger; Editing by Sara Webb and David Holmes)

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