AMSTERDAM — The Dutch central bank shuttered DSB Bank NV, a
struggling consumer and mortgage lender, after a run by depositors that
followed a call from a consumer group to pull money out of the
The government said it would begin an investigation into what
happened at the bank, a privately owned institution with reported
assets of some €8 billion ($11.77 billion).
The DSB seizure was described by the government as a one-off
situation unconnected with last years financial crisis. However, it
dealt a further blow to a financial system hit hard by a global credit
crunch that resulted in the nationalization of former financial giant
Fortis and in multi-billion-euro state bailouts for ING Groep NV and insurer Aegon NV.
The takeover of DSB, which said it had 1.3 million clients, came
after weekend talks between the government and the countrys five main
banks failed to find a way to save it.
The central bank won an emergency court order Monday morning that
put DSB into the hands of administrators. It described DSBs solvency
as being "under serious pressure." Nout Wellink, the central bank
president, told reporters that €600 million, or 17% of DSB Banks total
deposits, had been withdrawn since Oct. 1.
DSB, based in the north of the Netherlands, ran into difficulties
after AFM, the Dutch financial regulator, began investigating it
earlier this year for allegedly pushing mortgage customers into
expensive up-front insurance policies. The regulator fined the lender
€120,000 over those product sales in August as part of a continuing
investigation . At the time, DSB apologized, saying it regretted the
practices and would work with customers to find solutions. This month,
a bank customer association calling itself Mortgage Suffering urged
clients to withdraw their savings and deposits from DSB.
The bank is named after founder and owner Dirk Scheringa, a former
policeman who also owns AZ Alkmaar, the Dutch soccer champions.
Monday, Mr. Scheringa said the takeover was "incomprehensible and undeserved."
"DSB Bank is not in an emergency situation and we were just working
on solutions for customers in financial problems," he said. He added
that he wants to cooperate with the court-appointed administrators to
find solutions for his banks customers and its 2,000 employees.
Finance Minister Wouter Bos said there would be an independent
investigation of the way the bank was managed, and the role played by
the bank regulator.
"In this investigation, we will also look into the operational
functioning of current and former managers," including DSB Banks
former chief financial officer, Gerrit Zalm, he said.
Mr. Zalm is a former Dutch finance minister and is currently chief executive of state-owned ABN Amro NV. Mr. Zalm said in a statement that as CFO he was "successful in leading DSB Bank through the credit crisis."
Over the weekend, talks between the central bank, finance ministry and five banks — ING, SNS Reaal
NV, Rabobank, ABN Amro and Fortis Bank Netherlands — failed in part
"owing to uncertainty surrounding possible claims on DSB", the central
DSB Bank depositors are unable to access all their cash but can
withdraw €250 a day on debit cards for the next three days. While DSB
Bank cash machines have been frozen, clients can use their cards to
take cash via other banks. The central bank said DSB Bank clients can
open accounts with other banks without going through the usual
weeks-long application process. Under the Dutch deposit-guarantee
system, accounts of up to €100,000 are guaranteed by DNB through a plan
funded jointly by the Dutch banks.
Mr. Wellink said it remains uncertain when DSB Bank depositors will
get access to their money. "In the end, that is up to the independent
administrators who will lead the bank from now," he said.
ABN Amro said its exposure to DSB Bank could result in substantial
losses, without giving more details. ING said it had negligible direct
exposure but would have some indirect liability through its
contribution to the deposit-guarantee plan.
Bank and insurer SNS Reaal said its banking unit had "very limited"
financial ties with DSB Bank and that it had actively reduced
commercial links with the bank in the last two years. It said its
solvency and liquidity positions were strong enough to absorb the
expected costs of the deposit-guarantee scheme, without saying how much
they might be.