Does the state want to sell part of Belfius to finance its defense investments? “A counterproductive effect”

Punctual income

For the economist Éric de Keuleneer, this sale of assets would present a “rather positive interest“From a financial point of view. It would be in any case of a financial return which, depending on the percentage of actions sold, would notably make it possible to carry out certain investments. But not necessarily in the defense sector. Because”It is undoubtedly an interpretation of the will of the a little misleading government“, estimates the economist. “It would indeed be a punctual sale here, which is realized only once, while the defense budget requires annual investments“.

Besides, Éric de Keuleneer warns against a “counterproductive effect“that such a sale could cause for state finances on the medium or long term:”If there are fewer actions, there are fewer dividends. It is therefore not a way to improve the budget, if not over a year“.

The sale of action by Belfius could however have another interest in the Belgian State: generating an income of several billion euros which would make it possible to reimburse a small part of its debt. What reassure investors, even rating agencies? The economist is not convinced. “”Belgium has a strong capacity to be able to raise tax anyway“However, he continues,”She has been experiencing great difficulties in balancing her accounts for a few years. Its weak point lies in the total amount of the debt in connection with the gross domestic product, as well as its persistent budget deficit“.

Risky practices

If the sale of actions of Belfius by stock market (as imagined in 2018 by the Michel government) could therefore prove to be relatively interesting for the Belgian State, such a scenario inevitably recalls the context that led to the 2011 crisis, when the State had to intervene to get out of Dexia and nationalize the old municipal credit.

“There are two ways to see thingsreacts Éric de Keuleneer. On the one hand, the fact that the State holds 100 % of the shares leads to a risk of politicization of appointments and decisions. In this regard, an entry into the stock market would be a means of perpetuating the good management that has characterized Belfius in the past fifteen years. On the other hand, an entry into the stock market risks leading to the return of too risky practices, in particular in terms of acquisition policies, such as those which characterized the management of Dexia at the end of the nuning years. But this risk can therefore be reduced, or even deleted if one does not fall into the flaws of a remuneration policy which encourages to take risks. There are also listed banks on the stock market which work very well without there being such practices.”

What impact for Belfius customers?

Anyway, a transfer of shares by a way other than an IPO would not really have meaning in the eyes of the economist. “”I do not see what it would bring in a scenario where the state would keep more than half of the actions and therefore the power of control. However, this could become dangerous from the moment a single investor would target his own interest before that of his customers“.

The fact remains that among Belfius customers are local powers. But Éric de Keuleneer does not think that a sale of part of the actions leads to a significant impact. “”So far, Belfius has very well managed the balance between the search for dividends on the one hand and the specificity of the local powers which is his on the other side. Everyone therefore has an interest in continuing like that“Concludes the economist.