Dutch government set to recommend ABN Amro privatisation

[AMSTERDAM] The Dutch government is set to recommend on Friday that ABN Amro bank return to private hands via a stock market listing - seven years after it was nationalised during the 2008 financial crisis.

Finance Minister Jeroen Dijsselbloem will discuss the matter at a cabinet meeting and then send a letter to lawmakers detailing the plans for ABN, which parliament must then debate and approve.

ABN's listing could be the largest listing ever in Amsterdam - last week the bank reported a book value of 15.6 billion euros (S$23.17 billion) at the end of a strong first quarter.

Mr Dijsselbloem may disclose when the government plans the listing, how much the state will seek to sell initially and any protective measures to prevent a hostile takeover.

Analyst expect a listing in September or October and that the initial float will be around 20 per cent.

Dutch newspaper Het Financieele Dagblad reported on Friday that the bank will receive "the strongest possible" form of protections, citing sources at the ministry and bank.

A preliminary list of major investment banks seeking to help coordinate the listing has already been vetted, though Dijsselbloem has said when awarding final contracts he will seek to limit fees to about half of normal for the high-prestige job.

ABN Amro's risk profile has been improved since its rescue, as it shed operations, cut staff, refocused its business on the Dutch market and on global private banking, and raised its capital ratios.

ABN Amro is expected to brand itself in its new incarnation as a conservative bank with a reliable dividend. It is one of three major Dutch-based banks, with roots going back to 1824.

In October 2007, it was a global player and was taken over in a hostile 71 billion euro deal.

The buyers, Royal Bank of Scotland, Santander , and the now defunct Fortis Group, each wanted a slice of ABN, but they paid up to win a takeover battle with Barclays - and the timing proved disastrous.

The Netherlands nationalised the bulk of ABN on Oct 3, 2008, together with the Dutch operations of Fortis, as they hurtled toward an insolvency that had the potential to cripple the country's financial system. RBS was rescued by the British state 10 days later.

According to figures published by the Netherlands' Court of Audit, the Fortis-ABN nationalisation cost the government 24 billion euros.

ABN has remained among the global top 10 in private banking, and ING and Rabobank are now its only major competitors on the highly concentrated Dutch retail and commercial banking markets.

REUTERS