ABN AMRO Group
ABN AMRO Group N.V. was a Dutch bank group, consisting of ABN AMRO Netherlands, ABN AMRO Private Banking, the International Diamond and Jewelry Group, and Fortis Bank Netherlands.
 | |
| Type | Public |
|---|---|
| Euronext: ABN AEX Component | |
| Industry | Financial services |
| Founded | 18 December 2009 |
| Defunct | 29 June 2019 |
| Headquarters | Amsterdam, Netherlands |
Key people | Kees van Dijkhuizen (CEO) |
| Products | Asset management Commercial banking Investment banking Private banking Retail banking |
| Owner | NLFI (Government of the Netherlands) (56.3%) |
| Subsidiaries | ABN AMRO Bank N.V., Fortis Bank (Nederland) N.V. |
| Website | www.abnamro.com |
The group was formed after the Dutch government nationalised the Dutch part of Fortis on October 3, 2008 to prevent the bank and insurer succumbing to the Financial crisis of 2007–2010. The insurance arm of Fortis has been split off as ASR Nederland.[1]
When the group was formed, the Dutch government had a 97.8% stake in Fortis Bank Netherlands Holding NV, a 100% stake in Fortis Insurance Netherlands NV, and a 33.8% stake in RFS Holdings BV. It said that the banks would be integrated and merged into one organisation under the name ABN AMRO Bank N.V. before an exit would occur.
The merger was completed on 1 July 2010 and the Dutch government has said that the bank will remain under state ownership until at least 2011 after which it would consider a public listing on the stock market.
Credit crisis
In 2007, the RFS consortium (consisting of Royal Bank of Scotland, Fortis and Banco Santander), acquired the Dutch bank ABN AMRO for approximately €72 billion (or approximately €39 per share). As part of the deal Fortis bank gained the Private Banking, Asset Management and the ABN AMROs Netherlands Business Unit for which it paid €24 billion. It had planned to merge these businesses with its own operations in the Netherlands and expected the integration to be completed by late 2009. However the acquisition had depleted Fortis banks reserves and it got into serious trouble in 2008 as the credit crunch took hold.
Prior to the financial problems, the European Union competition commissioner had ruled that for the acquisition to be approved, Fortis would need to sell part of the business it acquired from ABN AMRO. To do this Fortis split the group under the name NEWbank and planned to sell it to Deutsche Bank, however the sale was stopped by the Dutch government at the time of nationalization [2] and the deal was renegotiated.
In September 2008 Fortis announced that its share of ABN AMRO Bank was for sale again. However, no buyer could be found.[3][4][5] and therefore on October 4, 2008, the Dutch government announced that it would acquire all the Dutch operations of Fortis, including ABN AMRO for €16.8 billion. Within this package ABN AMRO was the largest component. The plan was that ABN AMRO and the Dutch part of Fortis would be integrated and eventually sold.
On 1 July 2010 the bank completed the final stage of a complex restructuring, that saw the creation of ABN AMRO Bank N.V.
Madoff fraud
As a result of the alleged fraud by Bernard Madoff, Fortis Bank Netherlands (Holding) NV lost 1 billion euros on loans from the bank (through its subsidiary Prime Fund Solutions, part of Fortis Merchant Banking) to hedge fund and as collateral investments in Bernard Madoff Investment Securities.[6]
The Dutch government said on behalf of Fortis that a claim against the Securities and Exchange Commission would be considered.
Name
On November 21, 2008 Dutch finance minister Wouter Bos announced that Fortis and ABN AMRO would be merged. Until then, the banks would operate independently as Fortis Bank and ABN AMRO Netherlands.
After the merger was complete the bank used the name ABN AMRO for the combined bank, and the bank was officially renamed on 1 July 2010. The remaining parts of the original ABN AMRO still owned by the Royal Bank of Scotland would be renamed, sold or closed down.
Diamond Financing
Abn-Amro bank is one of the main banks financing the diamond business. Abn-Amro had branches in Botswana, New York, Hong Kong, Mumbai and Dubai, all of which they have sold or are in process of closing.
They currently only have a branch in Antwerp, where they are also shrinking their business.
References
- "insurer Fortis Insurance continued as ASR". www.zibb.nl. Archived from the original on 2011-07-25. Retrieved 2010-07-20.
- "Sale Parts ABN AMRO". ABN AMRO group. January 16, 2008. Archived from the original on November 14, 2008.
- Fortis confirms injection EUR11, 2 billion, would sell ABN Amro Archived May 19, 2009, at the Wayback Machine
- ING buys ABN Amro from Fortis' Trouw, September 29, 2008
- ING does not bid for ABN Amro Netherlands Archived 2009-05-18 at the Wayback Machine NRC, September 29, 2008
- Declaration on the fraud Madoff