The Dutch finance ministry and central bank have called a press conference for 0830 local time (7:30 a.m. British time) on Friday, where they are expected to announce a state bailout for ailing bancassurer SNS Reaal , a source familiar with the deal told Reuters.
SNS Reaal received 750 million euros $1 billion (630 million pounds) of state aid in 2008 at the height of the financial crisis and is widely expected to require a second bailout because of losses at its property unit.
Jeroen Dijsselbloem, the finance minister, and Jan Sijbrand, executive director responsible for banking supervision and supervisory policy at the Dutch central bank, will hold the press conference, according to a statement from the finance ministry. The ministry gave no further details.
SNS Reaal, the fourth-biggest bancassurer in the Netherlands with about 130 billions euros in assets, was hit by losses at its property unit and has been trying for months to sell assets and secure additional funding.
Its property finance exposure, including commercial real estate loans to small and medium-sized companies, stood at 9.8 billion euros at the end of September, of which 2.3 billion euros were non-performing loans. It has booked more than 1.3 billion euros of net losses on its property loans since 2009.
Dutch media reported on Thursday that a consortium led by private equity firm CVC Capital Partners was in talks to pump up to 1.8 billion euros into SNS Reaal, but a source familiar with the matter said talks with private investors had not worked out.
Credit rating agency Moody's on Thursday downgraded SNS Bank's Bank Financial Strength Rating to E from E+. It also downgraded to Baa3/Prime-3, from Baa2/Prime-2, and maintained on review for further downgrade, SNS Bank's senior unsecured and deposit ratings.
It said the downgrades reflected "Moody's assessment of a very high likelihood that extraordinary public support will be needed to achieve a solution which will address the very serious problems posed by the weak and deteriorating asset quality of the bank's property finance division, in order to allow SNS Bank to remain a going concern."
(Reporting by Sara Webb; Editing by Hans-Juergen Peters and Mark Potter)