Dexia SA, the bailed out Franco-Belgian bank, took a 447 million-euro ($616 million) charge on its 2013 financial accounts due to a European Central Bank review of the region’s banks.
The preliminary adjustments “relate to the valuation of illiquid positions on local authorities and on Spanish covered bonds classified as available for sale,” Dexia, based in Paris and Brussels, said in an e-mailed statement today.
Dexia is among about 128 banks that the ECB is inspecting with the help of national regulators as part of an asset quality review. The exercise is designed to prevent a repeat of a banking collapse after Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008.
The adjustments, which reduce other comprehensive income, or OCI, had no impact on Dexia’s income statement or solvency, it said. OCI contains changes not reported in a company’s profit and loss statement, including items such as gains or losses from available-for-sale securities, derivatives and pension plans, and their fair value.
The modifications, made as part of a preliminary review of assets and accounting valuation methods by the National Bank of Belgium, will be included in Dexia’s financial statements and will be presented for approval at its May 14 annual shareholders meeting, it said. The impact was reduced to 220 million euros as of March 21, Dexia said.
Dexia posted a 1.08 billion-euro net loss for 2013. In February, Chief Executive Officer Karel de Boeck forecast a 440 million-euro loss this year.