With € 24 billion in loans, Belfius has a market share of over 50% in public sector financing.
Belfius’ public sector exposure is the largest in the country. In 2021, the bank, 100% owned by the Belgian state, lent 23.8 billion euros to public entities. “Belfius remains the undisputed partner of the public and social sector”exposes the bank in its latest annual results.
According to Belfius’ latest half-yearly report, the bank holds a 56% market share in the “public and social” area. More than half of the endowment of bank loans granted to public entities in the broad sense (including hospitals) therefore passes through Belfius. “In the first half of 2022 Belfius granted 1.3 billion euros of new long-term loans to the Public and Social sector, an increase of 18% compared to the same period last year”, indicates the bank. Traditional financing (credit) is supplemented by financing in the form of bond issues. In the segment of public sector bonds, the bank claims to have a market share of 30%.
Historically (Belfius is the heir of Crédit Communal and Dexia) and still today the bank is the closest financial institution to the public authorities. In ten years of existence, however, it has done so has progressively changed the structure of its financial statements. In 2012, public sector loans represented 43% of the total amount of loans granted by Belfius. In 2022, following the increase in loans to businesses and individuals, funding to public authorities represents only 22% of this total.
Belfius does not disclose the details of its exposure to each public authority, whether it is the Walloon Region or other entities of the country. At most, it claims to cover 59% of new long-term financing practices for local authorities (2021 data).
“Issuing criticism of the Walloon debt is bold on Belfius’s part. But it is good risk management.”
The concerns expressed by Belfius about Walloon debt show that the bank does not hesitate to anger a major customer. “It’s bold from Belfius. But it’s good risk management,” comments a banking connoisseur. For the management of Belfius it is important that the bank maintains the best possible credit rating. “If Wallonia were downgraded by the rating agencies, Belfius, given its exposure, could suffer the same cascade effect, continues our interlocutor. The doubts expressed towards the Walloon Region are also a clear signal to the rating agenciesto show them that the bank will not leave the tap running under any conditions. “