Residual bank Dexia, whose raison d’être is solely to settle a portfolio of tens of billions in loans and bonds, will be abolished from its banking status from the beginning of next year, it announced in a press release after trading hours on Tuesday. Dexia itself was the requesting party because this status requires a lot of energy and costs due to the complex regulations.
“The European Central Bank has confirmed the withdrawal of Dexia Crédit Local’s authorizations for banking and investment services. This request was submitted by the Dexia Group to the Autorité de Contrôle Prudentiel et de Résolution (ACPR) on July 4, at the same time as the request for withdrawal of the financing company approvals of Dexia Flobail and Dexia CLF Régions Bail, in force since October 27, 2023.” , according to the press release on Tuesday.
The withdrawal of the status of Dexia Crédit Local as a credit institution will also lead to the adjustment of the status of the Belgian parent company Dexia SA, which will no longer be a financial holding company. Early next year they want to organize an extraordinary general meeting to change the name of the parent company to “Dexia Holding”.
The revocation of the banking statute will take effect on January 1, 2024. The residual bank recalls that this is in line with the implementation of the orderly resolution plan. “A detailed analysis of the impact and risks has shown that Dexia is perfectly capable of pursuing this resolution process outside banking regulations (…) The decision to continue without these authorizations will contribute to simplifying the organization of Dexia and the improvement of its cost trajectory, without jeopardizing the group’s ability to scale down or the quality of its portfolio.
Independent committee
Instead of the banking supervisors, an independent supervisory committee, set up by the authorities that have granted a guarantee, will carry out the audit from January 1. “This committee will consist of four members, two appointed by the Belgian state and two by the French state, who have strong expertise in banking supervision,” says Dexia. The committee will also assess applications for board, management and other management positions in terms of expertise and reliability, and will provide technical advice on the assessment of risks.
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