November 19, 2009 / 4:04 PM / 8 years ago

Rabobank sees 250 million euro hit from DSB demise

LONDON (Reuters) - Unlisted Dutch bank Rabobank RABO.UL expects to take a 250 million euro ($371.9 million) gross hit from the DSB Bank bankruptcy, its finance chief told Reuters on Thursday, a loss it could easily absorb.

“We are currently working from the assumption that it might be 250 million euros gross,” of tax Chief Financial Officer Bert Bruggink said at the Reuters Global Finance Summit.

“But the latest noises we pick up is that the final (overall) loss might be lower than 1 billion, so I‘m still hopeful that ultimately things won’t be that bad,” he said.

Dutch banks have to contribute to a deposit guarantee system according to their market share, to reimburse savers hit by the bankruptcy of the aggressive mortgage lender DSB Bank, which was declared bankrupt last month.

“We could quite easily absorb this potential loss in the second half results, without making any adjustments to our expectations for the full year profit,” Bruggink said.

Rabobank was using an estimate of a market share of savings deposits in Europe of around 25 percent, Bruggink said.

Lenders were liable for up to 3.25 billion euros in deposit guarantees after a Dutch court declared DSB bankrupt, though the final number was deemed to be much lower already at the time, as asset sales could offset the burden.

Reporting by Douwe Miedema

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