Bailout, Banks And More Collapses

In Europe Belgium’s Fortis looks like becoming the first large European continental bank to fall victim to the credit crunch, as the global chaos continues with Britain’s Bradford & Bingley mortgage lender and American regional bank, Wachovia also teetering on the brink.

The Belgian central bank and the countryâ€^TMs regulator are paving the way for a bailout of the huge banking and insurance group, which has a balance sheet of well over $A1.1 trillion and a market value at last Friday of just over $A25 billion.

There were reports this morning that french bank, BNP, might mount a bid for Fortis.

The Dutch banking assets that Fortis bought as part of the deal are yet to be transferred out of the special company used to execute the deal, which is legally a subsidiary of RBS, which raised over $A24 million and has sold more than $A10 billion in assets in the past four months.

Fortis, which has 2,500 branches across Europe, replaced its chief executive last week which worried markets.

There’s talk the Luxemborg Government might take a stake in Fortis to support it.

Santander, the Spanish bank, is in negotiations to buy B&B, but it is insisting on conditions.

The UK government forced the merger between the country’s biggest mortgage lender, HBOS and Lloyds TSB.

Britain’s top five banks — HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS — and Santander already own about 30% of B&B between them after they stepped in to help save a rights issue that flopped in June.

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