(Adds details on business)
BRUSSELS Aug 8 Nationalised Franco-Belgian
financial group Dexia reported a reduced net loss for
the first half of 2014, as it benefited from lower funding and
The bank, 94 percent owned by the Belgian and French states,
said its net loss in the first half was 178 million euros ($238
million) before one-off items, 127 million euros less than the
second half of 2013.
Dexia said that market conditions in the first half of the
year were sound and it was able to build up a liquidity buffer
of 9.3 billion euros, which it will need to pay back some bonds
falling due in late 2014 and 2015.
The group added that while funding costs were good in the
first half of the year, its business model remained vulnerable
to any higher interest rates and a worsening of the credit
Dexia, once the world's largest municipal lender, said it
had managed to reduce its exposure to the U.S. city of Detroit,
which was declared bankrupt in December, by $75 million during
the second quarter.
The bank said the book value at the end of June of its
lending to Detroit which is affected by the debt restructuring
measures stood at $255 million, with a further $136 million
unaffected. However, in July Dexia said it sold a further $55
million of Detroit's outstanding debt.
The group has become almost irrelevant as an investment but
its quarterly results matter because France, Belgium and, to a
lesser extent, Luxembourg. are guaranteeing its borrowings by up
to 85 billion euros.
($1 = 0.7484 euros)
(Reporting by Robert-Jan Bartunek; Editing by Subhranshu Sahu
and Greg Mahlich)