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Dexia Breakup Gathers Pace as Belgium to Buy Consumer Bank

Dexia SA is being broken up as Belgium agreed to buy the local consumer-lending unit, ending a 15-year cross-border experiment with France after Europe’s debt crisis deepened.

The Belgian federal government will pay 4 billion euros ($5.4 billion) for the division and guarantee 60 percent of a so-called bad bank to be set up for Dexia’s troubled assets, Finance Minister Didier Reynders said at a press conference in Brussels today after a weekend of talks. Dexia will sell assets, including its Luxembourg unit and its French municipal lending arm, to give the bad bank capital to absorb future losses.