Belgium Launches €2 Billion Partial Privatization of Belfius Bank

The Belgian government has officially launched the sale of 20% of state-owned bank Belfius, an operation expected to raise approximately €2 billion for state coffers while reducing the government’s annual dividend income by an estimated €90 million. The investor search, managed by the Federal Holding and Investment Company (SFPIM/FPIM), opened on Monday, June 22, with interested parties required to submit letters of intent by July 3, 2026.

Bank of America (BofA) Securities has been appointed as financial advisor for the private placement, which targets institutional investors, pension funds, insurance companies, and wealthy families rather than a public stock offering, according to RTBF. The decision was finalized at a restricted ministerial committee (Kern) on Saturday, June 20, under Prime Minister Bart De Wever (N-VA).

A Success Story Under State Ownership

Belfius was created in 2011 from the collapse of Dexia, a Franco-Belgian banking group that failed during the European sovereign debt crisis. The Belgian state paid €4 billion to acquire 100% of Dexia’s Belgian operations, which were rebranded as Belfius — a name combining “Bel” (Belgium), “Fi” (finance), and “Us” (us in English), symbolizing public ownership.

Under state stewardship, Belfius has proven remarkably successful. The bank reported a record net profit of €1.16 billion in 2025, up from €1.13 billion in 2024, with equity standing at €13 billion and an estimated total value exceeding €10 billion. Over 15 years, Belfius has paid approximately €3.6 billion in dividends to its sole shareholder — the Belgian state — with annual dividends reaching roughly €450 million in recent years.

As VRT NWS reported, the government’s total returns from Belfius — including dividends, guarantee commissions, and the expected sale proceeds — will exceed €7 billion, approaching the roughly €8 billion the state invested in the bank’s rescue and recapitalization.

Fiscal Impact: A Complex Equation

The partial privatization presents a nuanced fiscal picture, according to Jean-François Husson, Professor of Public Finance at UCLouvain, who was quoted extensively by RTBF. Under European budget rules, the €2 billion in sale proceeds cannot be counted toward deficit reduction, while the annual dividend income of approximately €450 million is fully counted as revenue that directly reduces the deficit.

“The state is selling indisputably at a time when it needs financial resources,” Husson told RTBF. “But the devil is in the details.” By selling 20% of the bank, the government forfeits roughly €90 million in annual dividend revenue. However, the €2 billion raised will reduce borrowing needs, saving approximately €90 million per year in interest costs at current rates of around 4.5%.

Belgium’s fiscal position remains challenging. The 2026 budget deficit stands at 4.9% of GDP (approximately €30 billion), while public debt has reached 109.4% of GDP — more than €700 billion, according to the Federal Planning Bureau. The DHnet/Belga news agency reported that potential investors include CVC Capital, ING, Rabobank, and Crédit Agricole, while Belfius itself is reportedly exploring discussions with wealthy Belgian families for anchoring ownership.

Sovereignty and Strategic Questions

While the state will retain 80% ownership and majority control, experts have raised concerns about the long-term implications. Husson emphasized that the primary concern is keeping decision-making power in Belgium. “When we abandoned leadership to foreign decision-makers, whether it was Sabena, Dexia, or FN under French shareholding, there were enormous problems,” he warned.

Private minority shareholders will likely push for higher profitability, potentially pressuring Belfius to reduce its public service missions — such as lending to struggling municipalities and hospitals. Critics also point to historical precedent: the partial privatization of the CGER (General Savings and Retirement Bank) in the 1990s led to full private ownership within five years, ultimately contributing to the creation of Dexia.

Political Divisions and Opposition

The privatization is being pursued by the Arizona coalition government (N-VA, MR, Les Engagés, Vooruit, CD&V). MR President Georges-Louis Bouchez has pushed for merging Belfius with public insurer Ethias before any sale, though the Kern cabinet agreed only to “study” this option — a move analysts interpret as a diplomatic way to avoid it.

Left-wing opposition has been vocal. Olivier Bonfond of CADTM/Gauche Anticapitaliste argued that “selling a public bank to buy fighter jets or finance the war effort is a more than questionable direction,” warning that public money should instead strengthen social justice and ecological transition.

What’s Next

Interested investors have until July 3 to submit letters of intent to Bank of America Securities. The identity of buyers and the final sale price will determine whether this partial privatization remains a one-off operation or becomes the first step toward full private ownership — a question that will shape Belfius’s role in Belgian finance for decades to come.