AMSTERDAM The European Commission has blocked a recapitalization plan of Dutch bank and insurance group SNS Reaal SR.AS, probably leaving only the state to inject capital, a Dutch newspaper reported on Wednesday.
SNS Reaal, which is struggling with losses on property loans, said in November that it expected to announce restructuring measures, possibly including asset sales, a share issue and the conversion of state aid into shares, early this year.
The Commission, however, opposes a rescue plan that involves SNS Reaal's Dutch peers ING ING.AS and state-owned ABN AMRO ABNNV.UL because they received state in 2008, prohibiting them from making takeovers, Dutch daily Het Financieele Dagblad reported, citing unnamed sources.
One scenario to recapitalize SNS Reaal, the Netherlands' fourth-largest bank, was to create a so-called "bad bank" with SNS Reaal's toxic property loans on its books and with the state, ING, ABN AMRO and privately held Rabobank RABO.UL as shareholders, the paper said.
With the European Commission blocking the involvement of ING and ABN AMRO, Rabobank has declined to participate as a single private party, probably leaving only the Dutch state to recapitalize SNS Reaal, the paper added.
The report said that estimates of how much capital SNS Reaal needs were between 1.2 billion and 1.8 billion euros ($1.6 billion to $2.4 billion) on a total loan portfolio of more than 8 billion euros.
SNS Reaal, which received 750 million euros of state aid in 2008 at the height of the credit crisis, had not yet taken a decision about a solution and could therefore not comment, a spokesman said.
ING declined to comment. The Dutch state, ABN AMRO, Rabobank and the European Commission's competition office were not immediately available to comment.
Analysts expect SNS Reaal to require some form of state aid after booking more than 1.3 billion euros of net losses on its property loans since 2009. ($1 = 0.7492 euros)
(Reporting by Gilbert Kreijger; Editing by David Goodman)