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ABN Amro makes record return to Dutch bourse

Friday, November 20, 2015 - 19:08
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Seven years after nationalisation, ABN Amro bounced back onto the stock market Friday with shares rising in what is seen as one of the biggest IPOs by a European lender since the financial crisis.

[THE HAGUE] Seven years after nationalisation, ABN Amro bounced back onto the stock market Friday with shares rising in what is seen as one of the biggest IPOs by a European lender since the financial crisis.

Top bank officials clapped and cheered at the Amsterdam stock exchange as the share price climbed steadily in early trading.

Chairman of the bank's board, Gerrit Zalm, rang the gong symbolically marking the start of trading.

"We are back, and that's great," he said, adding his bank was "solid, and offered an attractive yield." "The process has gone well," agreed Dutch Finance Minister Jeroen Dijsselbloem, hailing the return to the market of the country's third largest bank.

It marks a new era for the institution after a troubled patch triggered by the 2008 crisis.

The Dutch government, which led the bailout during the tumult of the financial meltdown, is hoping to recoup some of the 22 billion euros (S$33.2 billion) spent propping up the bank.

Some two hours after opening 2.30 perc ent up at 18.18 per cent, shares consolidated early gains settling at around 18.36 euros, up some 3.44 per cent.

Initially, the price per share had been fixed at between 16 to 20 euros.

But ABN Amro said in a statement early Friday that the price had been set at 17.75 euros a share.

That will raise some 3.3 billion euros, the bank said in a joint statement with the state administrators of the offering, adding it priced ABN Amro's current value at 16.7 billion euros.

The government was monitoring carefully Friday's IPO, Mr Dijsselbloem said.

"Naturally we want to see a small upwards movement, so there is no disappointment. As you know we have another 80 per cent of the shares to sell," he added.

ABN Amro has confirmed that a further 3.0 per cent share is available and "can be exercised to cover over-allotments or short positions" if there is a high demand.

"It's a successful IPO," analyst Jos Versteeg, from the Dutch bank Theodoor Gilissen, told AFP.

"It has been properly handled. And it's a good price per share," he said, adding analysts did not see much room for big future price movement.

To avoid all the shares being snapped up by major investment funds and other institutional investors, ABN Amro held back 10 perc ent for individual buyers in the Netherlands.

Although the government has said the bailout cost it around 22 billion euros, its main audit body estimated the true price tag at about 32 billion euros, Dutch media has reported.

The Netherlands' third-largest bank behind ING and Rabobank, ABN Amro traces its roots back to the 19th century.

It was listed on the Amsterdam stock exchange before being bought in 2007 by a consortium consisting of Spanish lender Santander, the Royal Bank of Scotland and the Belgian-Dutch outfit Fortis.

But the 71 billion-euro-deal, one of the largest in banking history, proved calamitous for the three buyers.

Royal Bank of Scotland is now 73 per cent owned by the British government after a £45.5 billion (S$98.3 billion) rescue in 2008.

Fortis was also dismantled during 2008 to avoid bankruptcy.

Its Dutch activities, including its share in ABN Amro, were bailed out by the Dutch government, which then merged it back into ABN Amro Bank, and it has held the reins ever since.

Today ABN Amro is largely a commercial bank focusing significantly on the highly competitive mortgage market.

Last week it trumpeted continuing good results, enjoying net profits of some 509 million euros for the third quarter, a 33 per cent year-on-year increase.

The IPO came as Europe's main stock markets rose at the start of trading Friday, with London's benchmark FTSE 100 index up 0.4 per cent to 6,355.14 points.

AFP