Brussels: French banking giant BNP Paribas will take a majority 75 per cent share of troubled bank Fortis NV, the Belgian government announced.

Prime Minister Yves Leterme said the Paris-based bank would take controlling interest in all of Fortis Belgian and Luxembourg operations, including the bank's insurance and investment arms, but Belgium and Luxembourg will in turn take a blocking minority share in BNP Paribas.

"No client or depositor (at Fortis) will end up in problems due to the financial crisis," Leterme told reporters late yesterday after two days of closed-door talks between BNP Paribas and government officials.

Leterme said he was keen to have another bank take over troubled Fortis to restore confidence in the company before markets open today. The bank has been caught up in the financial credit crisis and has faced weeks of plummeting stock values amid fears it would go insolvent.

A previous bailout last week, which left Belgium and Luxembourg with 49 per cent share stakes each in Fortis, failed to quell widespread concerns over the bank s solvency.

Under the deal, the Belgian government will buy all remaining shares in Fortis Belgium for euro 4.7 billion (USD 6.5 billion) and then sell 75 per cent of its stake to BNP Paribas for euro 8.25 billion (USD 11.4 billion) in turn for a blocking 11.7 per cent minority share in BNP Paribas. Luxembourg will get a 1.4 per cent share in BNP.

Leterme said the minority stakes in BNP would also ensure the government can ensure the French bank does not move to cut jobs at Fortis. The bank currently employs some 25,000 in Belgium.
Source : PTI