Oct. 11 (Bloomberg) -- Rabobank Groep, the biggest Dutch retail lender, placed 75 billion euros ($102 billion) at central banks as clients entrusted more money to the AAA-rated institution, which became more reluctant to lend to competitors.
Rabobank deposited the funds, mostly at the European Central Bank, for reasons of “prudent liquidity management” amid “good inflows” of deposits, Hendrik Jan Eijpe, a spokesman for the Utrecht-based lender said today. Inflows, with a short duration, were mainly from companies and “bigger savers,” Eijpe said today, without specifying the size of the deposits.
The ECB yesterday said financial institutions increased overnight deposits to the highest in 15 months as concern about other banks’ sovereign debt holdings discouraged them from lending to each other. Euro-area banks placed 255.6 billion euros at the Frankfurt-based ECB on Oct. 7, the most since June 30, 2010.
Rabobank accounted for about a fifth of that amount, Dutch newspaper Het Financieele Dagblad reported earlier today.
Chief Financial Officer Bert Bruggink said in August that Rabobank was showing greater caution in lending to other banks and that the circumstances reminded him of the period around the collapse of Lehman Brothers Holdings Inc. in 2008. His bank maintained an AAA credit rating throughout the financial crisis and didn’t need state support.
In the Netherlands, savings of as much as 100,000 euros fall under a deposit-guarantee program aimed at reimbursing depositors when banks fail. Dutch banks such as Rabobank and ING Groep NV paid hundreds of millions of euros under the program to compensate clients of DSB Bank NV after the regional lender collapsed in October 2009.
Dutch Finance Minister Jan Kees de Jager plans to force banks to contribute to a fund of at least 4 billion euros up front by having them pay a premium of at least 0.1 percent of deposits annually from 2012. The fund would cover an estimated 400 billion euros in savings, the finance ministry said in August.
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