In April Dexia Group agreed to sell 90 percent of the Grand Duchy-based operation to Qatar’s Precision Capital and 10 percent to the Luxembourg state. Part of the deal allowed Dexia to sell some of BIL’s holdings--including its stakes in Dexia Asset Management, RBC Dexia Investor Services and a portfolio of derivitives--before the transaction closed.

But late Friday night the company said that “the sale of the ‘legacy’ portfolio [had] impacted the 2011 results of BIL to the extent of around €1.9 billion and severely affected its solvency.”

Dexia said the BIL now had Tier 1 capital reserves of less than nine percent, the minimum called for under both Basel III international banking norms and the figure required in the agreement with Precision Capital and the Luxembourg government.

“At present it appears that this ratio will not be achieved at closing and that an increase of the capital of BIL will be necessary pre-closing, the amount being under consideration and negotiation,” the bank said in a press statement.

Hit by the euro crisis, Dexia Group is selling BIL and several other units as part of multibillion euro bailout by the Belgian, French and Luxembourg states, which is being supervised by the European Commission.

On August 3, the group reported a net loss of more than one billion euro during the first half of 2012.