AMSTERDAM (AP) -- A Dutch court declared DSB Bank NV bankrupt on Monday, ending hopes the regional lender, which has suffered a run on deposits, might be sold or bailed out.
The privately-owned bank is the first to go bust in the Netherlands since last year, though the government and regulators insist its failure was not directly related to the credit crisis.
"The court concludes that the utmost was done for DSB to continue as a whole entity, and there is no prospect of that anymore," the Amsterdam District Court said in a summary of its ruling.
DSB was put into receivership of the Netherlands' central bank a week ago. Customers had withdrawn about a sixth of the euro4.3 billion ($6.4 billion) the bank had in deposits at the start of the month.
The government insures the first euro100,000 of retail bank accounts. Finance Minister Wouter Bos said Monday that money will be paid by Christmas.
Meanwhile the bank's new curators will work to wind down operations and pay creditors, who will suffer large losses. Most of the bank's 2,000 employees will lose their jobs and 1,300 were laid off on Monday.
The failure has raised questions about the functioning of Dutch financial institutions, oversight bodies and the government -- as well as DSB's own lending practices.
The catalyst for the run on DSB was a call by Pieter Lakeman, an industry gadfly, for customers to withdraw their deposits in protest because the bank had improperly overcharged mortgage customers.
The central bank and Finance Minister Wouter Bos have recommended that DSB consider trying to hold Lakeman liable for damages.
Lakeman has responded that DSB's fall was inevitable and the central bank, which had been aware of problems at DSB for more than a year, failed in its oversight duties.
The bank's founder and main owner Dirk Scheringa also blames the central bank and the government, saying their intentional leaks to the media created an air of uncertainty around DSB that proved fatal.
In addition, he has questioned why major Dutch financial institutions such as ING Bank NV, ABN Amro, and Aegon NV received multibillion euro bailout packages when they ran into trouble, but DSB could not arrange comparatively modest assistance.
"We didn't go bankrupt, we were destroyed," Scheringa said, adding that he has lost everything except his house.
Finance Minister Bos initially attempted to broker a deal whereby banks that received government bailouts would buy DSB, but they demanded terms that were prohibitively expensive, he said.
Once the bank was in receivership, saving it became impossible because depositors would have pulled their money out instantly if given the chance, his minstry said in a statement Monday.
"The bank brought its problems on itself by its policies, unrest among clients, unclear communication and the insecurity that caused," it said.
DSB was based in a town called Wognum, 50 kilometers north of Amsterdam but well outside the corridors of political power. Its growth in recent years upset the status quo in a market with just a handful of competitors.
It was best known for television commercials that aired frequently promising low rates on personal loans.
Bos has ordered several independent investigations, and legal procedings by the various parties involved are likely to last for years.
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