Stricken Dexia bank reports loss of €2.86bn

French-Belgian bank Dexia, on state life-support while being unwound, reported on Thursday a net loss of 2.86 billion euros for 2012 owing to losses on divestments and the cost of rescue financing. The bank said that the cost of emergency funding from the European Central Bank, and of a temporary guarantee from the French, Belgian and Luxemburg states, amounted to nearly 1.0 billion euros ($1.32 billion). The negative impact of asset sales was 1.60 billion euros. In 2011, the bank had reported a loss of 11.63 billion euros. Dexia bank specialises in funding local authorities but in Belgium it is also known for retail banking activities. In 2012 the bank obtained approval from the European Commission to continue unwinding its activities over several decades rather than going into immediate liquidation. The European Commission approved the principle of a new guarantee from the three states amounting to 85 billion euros, and a recapitalisation of 5.5 billion euros funded by France and Belgium.