Dexia piled up record losses

During the past quarter the Belgian-French banking group Dexia piled up record losses worth 6.3 billion euros. Angry Dexia shareholders have now also filed a complaint with the judicial authorities.

The record losses are being attributed to the restructuring operation that was sped up. In October the Belgian state purchased Dexia Bank Belgium for 4 billion euros. A lion's share of this amount was used to pay Dexia Bank Belgium's debts and increase the capital of its French subsidiary Dexia Crédit Local.

Estimates of the value of Dexia's assets were also scaled down. The group's worth was cut by 2.3 billion euros largely as a result of the Greek state bonds in its portfolio.

During the first nine months of the year Dexia is thought to have piled up losses worth 10.5 billion euros. These losses are on the balance sheet of the Dexia bad bank that is listed on the stock exchange and no longer includes Dexia Bank Belgium.

Angry Dexia shareholders have now also filed a complaint with the judicial authorities. The shareholders claim that the Dexia management misled them by issuing upbeat statements about the group's future despite worrying results.

In recent months the value of Dexia shares has collapsed. So far the group is the only big victim of the debt crisis in the Eurozone among banks. Poor funding of the company is being blamed as the culprit.