Investment Banking: ABN AMRO

ABN AMRO

ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. It was re-established, in its current form, in 2009 following the acquisition and break-up of the original ABN AMRO by a banking consortium consisting of Royal Bank of Scotland Group, Santander Group and Fortis. Following the collapse of Fortis, the acquirer of the Dutch business, it was nationalized by the Dutch government along with Fortis Bank Nederland.

The bank is a product of a long history of mergers and acquisitions that date back to 1765. In 1991 Algemene Bank Nederland (ABN) and AMRO Bank (itself the result of a merger of the Amsterdamsche Bank and the Rotterdamsche Bank in the 1960s) agreed to merge to create the original ABN AMRO. By 2007 ABN AMRO was the second-largest bank in the Netherlands and the eighth-largest in Europe by assets. At that time the magazine The Banker and Fortune Global 500 placed it 15th[7] in the list of world’s biggest banks and it had operations in 63 countries, with over 110,000 employees.

In October 2007 the bank was acquired, in what was at that time the biggest bank takeover in history, by a consortium made up of the Royal Bank of Scotland Group, Fortis and Banco Santander, known as RFS Holdings B.V. Consequently, the bank was divided into three parts, each owned by one of the members of the consortium. However, RBS and Fortis soon ran into serious trouble: the large amount of debt that had been created to fund the takeover had depleted the banks' reserves just at the time the financial crisis of 2007–2010 started. As a result, the Dutch government stepped in and bailed out Fortis in October 2008, before splitting ABN AMRO's Dutch assets (which had primarily been allocated to Fortis) from those owned by RBS, which were effectively taken over by the UK government due to its bail-out of the British bank. The operations owned by Santander, notably those in Italy and Brazil, were merged with Santander, sold off or shut down.

The Dutch government appointed former Dutch finance minister Gerrit Zalm as CEO to restructure and stabilise the bank, and in February 2010 the assets it owned were legally demerged from those owned by RBS.[8] This demerger created two separate organisations, ABN AMRO Bank N.V. and The Royal Bank of Scotland N.V.[9][10] The former was merged with ABN AMRO Private Banking, Fortis Bank Nederland, the private bank MeesPierson (formerly owned by the original ABN AMRO and Fortis) and the diamond bank International Diamond & Jewelry Group to create ABN AMRO Group N.V., with the Fortis name being dropped on 1 July 2010. The remaining parts of the original ABN AMRO still owned by The Royal Bank of Scotland N.V., meanwhile, were renamed, sold or closed down.[11]

The Dutch government has said that ABN AMRO would remain state-owned until at least 2014, after which it would consider a public stock market listing for the bank.