Document Type

Case Study

Case Series

Resolution and Restructuring

JEL Codes

G01, G29


Fortis Group, a financial conglomerate with subsidiaries in Belgium, the Netherlands, and Luxembourg, faced share price deterioration and a depositor run as the Global Financial Crisis (GFC) intensified in September 2008. On September 29, the three governments announced a EUR 11.2 billion bailout package that would allow the Fortis Group to continue operating with recapitalized subsidiaries. As part of that deal, Belgium contributed a EUR 4.7 billion capital injection to the Belgian subsidiary, Fortis Bank Belgium (FBB), which held both the group’s Belgian bank and its main Dutch and Luxembourgish banking activities. However, the cross-border cooperation fractured after the failure of the recapitalization to stem runs by depositors and other creditors. On October 3, Dutch authorities announced that the Dutch government would purchase and temporarily nationalize all of Fortis’s Dutch assets for EUR 16.8 billion. That announcement split the group and led the Belgian and Luxembourg governments to also change strategic course, focusing on rescuing Fortis’s subsidiaries while also separating them from the group. On October 5, Belgium announced it would purchase the remaining 50% of FBB from Fortis Group for EUR 4.7 billion, bringing its investment to EUR 9.4 billion for a 99.9% stake, and that it would then sell 75% of the bank to BNP Paribas, a large French bank, in exchange for new BNP Paribas ordinary shares. The plan also created a “bad bank,” structured as a special purpose vehicle (SPV), called Royal Park Investments (RPI), to assume FBB’s portfolio of troubled structured credit securities, largely linked to US subprime mortgages. The Belgian government had no legal authority at the time to impose losses on a failed bank’s equity shareholders or creditors; as such, the transactions required the approval of Fortis Group shareholders. After extended negotiations, shareholders approved the plan in April 2009, and the company completed the transaction with BNP Paribas on May 12, 2009. Since 2009, the government has sold its 25% stake in BNP Paribas for EUR 3.2 billion, its 43.5% stake in the SPV for EUR 1.0 billion, and roughly half its shares in BNP Paribas for EUR 4.1 billion. As of October 2023, it still held 5.1% of BNP Paribas, valued at about EUR 3.4 billion.