Dutch authorities seized mortgage lender DSB Bank yesterday. A run on deposits at the bank led to “a large outflow of liquidities that jeopardised DSB’s existence,” the central bank said.

DSB Bank withdrawals

At the start of the month, DSB said it had €1.5bn in cash to cover its €4.3bn in deposits. But amid growing customer unrest—the bank was fined in the summer over its selling practices—boycotts were organised and rumours swirled about DSB’s solvency. A document filed by the central bank with the Amsterdam court detailed the daily outflows from DSB in October; more than €620m was withdrawn between October 1st and 11th. If a buyer for the troubled lender cannot be found—the central bank was unable to persuade a group of Dutch banks to buy DSB over the weekend—it will be declared bankrupt. The episode is an unwelcome reminder of the fragility of Dutch banks, which have suffered heavily as a result of the financial crisis [subscription required].

UPDATE (Oct 19): No rescue plan was reached. DSB is bankrupt.

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