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ABN Amro IPO back in sight after executives concede on pay
[AMSTERDAM] The Dutch government will reconsider selling off ABN Amro, Finance Minister Jeroen Dijsselbloem said, after senior managers agreed to give up a controversial pay rise that had stalled progress on the bank's proposed share listing.
In the face of a widespread public outcry, the managers said they would give up raises of 100,000 euros (US$110,000) each, which had been approved by the supervisory board for six members of the managing board, all but chief executive Gerrit Zalm.
Lawmakers, who must approve an initial public offering, had decried the raises as evidence that the bank's management culture was still flawed. Dijsselbloem said on Friday he would delay privatisation until questions over the increase were resolved.
Thousands of bank employees had lost their jobs after the bank's 2008 nationalisation, which cost taxpayers billions of euros. Last year the union representing workers at the bank agreed to a two-year freeze on salaries.
Mr Zalm, who did not get a raise, said managers' annual base salary was increased after a law had limited bonuses in the financial sector to 20 per cent.
In a statement on Sunday, the managers said they were"putting the interests of the bank and the public first". "Now that our remuneration is the subject of discussion and threatens to affect the future of ABN Amro ... (we) have decided to renounce the allowance," the managers wrote.
Mr Dijsselbloem quickly responded that he "welcomed the step". "After completing discussion with parliament, the cabinet will again discuss the launch of the proposed stock market listing," he said.
ABN Amro's finances have largely recovered since the crisis. On Feb 20, it reported an underlying 2014 profit of 1.55 billion euros (S$2.31 billion), with provisions for bad loans shrinking and the Dutch economy set to grow.
Its current book value amounts to around 14.9 billion euros, indicating that a stock market listing would be unlikely to raise enough to repay the roughly 24 billion euros that its nationalisation cost taxpayers.
The IPO, which could take place as early as the second half of 2015, will be the largest to date on the Euronext exchange.
Mr Zalm had said the managers were all hired after the bank's nationalisation.
Mr Zalm's base pay remains at 759,375 euros, and the other managers, including chief financial officer Kees van Dijkhuizen, will remain at 607,500 euros, well below industry averages.