Dutch government to sell off nationalized ABN Amro bank

AP News
Posted: May 22, 2015 10:54 AM

THE HAGUE, Netherlands (AP) — The Dutch government said Friday it will sell off ABN Amro bank in phases beginning later this year, seven years after the state took it over to prevent its collapse during the global financial crisis.

Prime Minister Mark Rutte said the financial sector is now stable enough, there is sufficient interest in the market and ABN Amro is ready for a phased sale.

The decision had been expected earlier this year but was delayed amid uproar over members of the bank's board awarding themselves a 100,000 euro ($110,000) pay rise to compensate for losing their right to bonuses when the bank was nationalized in 2008.

The bank scrapped the pay rise at the end of March, clearing the way for the re-privatization.

Gerrit Zalm, the former Dutch finance minister who is now chairman of ABN Amro's managing board, welcomed the announcement, calling the sale, "a logical next step in the bank's development."

ABN Amro announced this month that its underlying net profit rose 44 percent in the first quarter from a year earlier to 543 million euros, its best quarter in four years.

The government said the sale via initial public offering could happen from the fourth quarter. The first tranche sold will be between 20 and 30 percent of the bank.

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The Dutch state spent 21.7 billion euros to save the bank when it was nationalized in 2008 together with the Dutch operations of one of its would-be acquirers, Belgium's now defunct Fortis NV, in a takeover bid that went horribly wrong.

The bank is now estimated to be worth 15 billion euros ($16.5 billion) following an aggressive restructuring that saw it cut jobs and sell off foreign units.

Finance Minister Jeroen Dijsselbloem said the government will build protective measures into the sale to prevent potential hostile takeovers.

"I do not want the bank to become a target again," he said.