No insurance

14 November 2008 By Pierre Briancon

The new chief executive of the governmentrescued, BelgianFrench bank will sell part of the troubled bond insurance business at a E1.5bn loss. Separately, Dexia lost another E1.5bn in the third quarter. Some decks are being cleared, but investors won t be rejoicing soon.

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Dexia, the BelgianFrench bank, Friday said it posted a E1.5bn net loss in the third quarter of the year on E315m of revenues, down 78% onyear, after taking a E2.2bn hit due to the financial crisis.

The bank, specialised in local government financing, also said it would sell the insurance part of its US monoline FSA to Marylandbased Assured Guaranty for a mix of cash and shares.

Dexia was bailedout in September by the Belgian and French governments which agreed to put E6.4bn of fresh capital in the bank.

Shares of Dexia were down 11% in afternoon trading in an otherwise positive market, giving the bank a E7.8bn market capitalisation.

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