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By Gilbert Kreijger
AMSTERDAM, Jan 22 (Reuters) - Dutch bank and insurer SNS Reaal said former clients of its property finance subsidiary are being investigated by the country's tax and financial crimes agency, but declined to give further details.
SNS Reaal, which received 750 million euros ($1 billion) of state aid in 2008 during the height of the financial crisis, is widely expected to require a second state bailout because of problems at its property unit and is due to come up with a restructuring plan next month when it reports its earnings.
SNS Reaal's property finance exposure, including commercial real estate loans to small and medium-sized companies, stood at 9.8 billion euros at the end of September, of which 2.3 billion euros were non-performing loans. It has booked more than 1.3 billion euros of net losses on its property loans since 2009.
"Property Finance is not the subject of investigation. It concerns former clients, property projects which we have financed," an SNS Reaal spokesman told Reuters, confirming a media report.
The Tax Intelligence and Investigation Service, known by its acronym FIOD, declined to comment on the report. This particular subsidiary of the Dutch public prosecutor investigates financial fraud, including tax fraud, bankruptcy fraud, money laundering and illegal money transfers.
The prosecution's investigation originally targeted a property project in Spain, and then broadened out into other projects in several European countries, Dutch newspaper NRC Handelsblad reported on its website, citing people familiar with the matter.
The spokesman for SNS Reaal declined to say which former clients or which projects were being investigated.
SNS Reaal shares were down 3.3 percent at 0.88 euros by 1215 GMT, underperforming the Amsterdam midcap index, which was down 0.25 percent, after KBC Securities downgraded its rating on the shares to a "hold" from "accumulate". ($1=0.7510 euros) (Reporting by Gilbert Kreijger; Editing by Sara Webb and Greg Mahlich)