Belfius plans to pay out 50% of its profits as dividends and lower its capital cushion target as the state-owned bancassureur prepares for the federal government’s planned sale of up to 20% of its capital, according to the company. The federal government hopes to raise up to 2 billion euros from the partial privatization.
Belfius is currently 100% owned by the Belgian state through the Federal Holding and Investment Company (SFPIM). The company announced a series of adjustments to its capital structure and dividend policy on Monday to anticipate the partial privatization, a move the bancassureur has advocated for several years. The initiative gained momentum under the government led by Bart De Wever.
“To strengthen its agility and attractiveness to investors,” Belfius engaged in discussions with its state shareholder regarding capital and dividend changes, the company stated. Under the updated policy, the payout ratio increases from 40% to 50% of profits. The bank plans an interim dividend of 375 million euros before the end of 2026, which represents an increase of 125 million euros compared to last year. A second exceptional dividend of 375 million euros will be distributed to SFPIM once the opening of the capital is officially concluded and signed.
Capital Cushion Adjustments and Additional Tier 1 Issuance
Alongside the dividend changes, Belfius intends to lower its target common equity tier 1 (CET1) capital ratio range from 15 to 15.5% down to a new range of 14.5 to 15%. The group also plans to issue 500 million euros in additional tier 1 (AT1) capital instruments. Belfius emphasized that all of these measures remain subordonnées à la confirmation et à la signature of the capital opening.
According to Mikael Petitjean, professor at the Louvain School of Management at UCLouvain, the state considers its rescue mission accomplished fourteen years after the financial crisis, noting that selling a portion of shares allows the government to realize the value of a forced investment and fund other priorities. Roland Gillet, professor of financial economics at Sorbonne University Paris 1 and the Solvay Brussels Schools of Economics and Management at ULB, added that the state previously opted to draw dividends rather than sell the bank as the financial sector recovered following the 2011 buyout of Dexia for 4 billion euros.
Did You Know? In 2011, following the collapse of Dexia, the Belgian state acquired the institution for 4 billion euros to protect the bank and its depositors, subsequently splitting it into a stronger entity named Belfius and a separate wind-down structure for toxic assets.
Political Friction and Parallel Discussions on Ethias
The partial privatization process operates alongside political debate within the Arizona coalition regarding a potential link between Belfius and the Liège-based insurer Ethias. David Clarinval confirmed that the state’s financial arm, SFPI, was asked by the government to examine the legal and financial implications of a share swap that could allow Belfius to acquire the federal government’s stake of slightly over 30% in Ethias. However, both the Walloon and Flemish regions have indicated they are not selling their respective stakes in Ethias, and the cabinet of Finance Minister Jan Jambon (N-VA) stated that the Belfius privatization and the Ethias dossier are now scindés.
The discussion prompted a public disagreement on social media between MR president Georges-Louis Bouchez, who welcomed the analysis as a key strategic step, and Maxime Prévot, who responded that the government had not mandated SFPI to prepare a takeover of Ethias shares but solely to conduct a legal feasibility analysis of selling federal shares. Furthermore, the partial privatization faces potential complications from former Arco cooperators threatening legal action unless they receive financial compensation, alongside reported interest from potential investors including CVC Capital Partners, Worx Invest, Marc Coucke, and Luc Tack.
Frequently Asked Questions
What percentage of Belfius is the federal government planning to sell?
The federal government plans to open the capital of Belfius by a maximum of 20%, according to the company.
How much does the executive expect to raise from the operation?
The executive hopes to collect up to 2 billion euros from the transaction, according to the source.
What are the new dividend terms for Belfius?
Belfius plans to distribute 50% of its profits as dividends (up from 40%), including an interim dividend of 375 million euros before the end of 2026 and an exceptional dividend of 375 million euros upon the official signing of the capital opening, according to the company.
How will the planned capital opening of Belfius impact public finances and the broader Belgian banking sector moving forward?