THE Dutch government plans to further reduce its holding in ABN Amro Bank, joining states across Europe in speeding up the exit from banks that were bailed out after the financial crisis.
The Netherlands plans to pare its stake to about 30 per cent, from about 40.5 per cent, through a trading plan that will become operational in the coming days, its investment vehicle NLFI said in a statement on Tuesday (Oct 15).
The state has been ABN Amro’s largest holder since it rescued the lender at the height of the financial crisis through a 22 billion euros (S$31.4 billion) bailout. Last month, it said it sold shares worth about 1.17 billion euros.
Governments across Europe have been taking advantage of higher valuations to lower their stakes in bailed out banks. So far this year, they sold about 13 billion euros of shares in bailed out banks, the most since the end of the financial crisis, according to filings for 10 firms reviewed by Bloomberg. While governments are unlikely to fully recoup the money spent on the bailouts, the window for disposals hasn’t been this open since the crisis.
With ABN Amro’s market value of 13.2 billion euros at Monday’s close, the state’s current stake in the bank is worth about 5.3 billion euros. Starting with its initial public offering in 2015, the Netherlands has already raised more than 10.9 billion euros from successive sales of ABN Amro stock, according to filings from NLFI.
The state has also received almost 6.3 billion euros in dividends from ABN Amro since 2011, according to NLFI. Still, the Netherlands also faced billions of euros of interest costs for the bailout and is likely to lose money overall, according to a letter from the Finance Ministry last year.
“Here sits a liberal minister of finance who doesn’t think that banks should be in the hands of a government,” Dutch Finance Minister Eelco Heinen told reporters last month.
ABN Amro, which has over the years been transformed into a consumer-focused lender targeting the Netherlands and northwestern Europe, has not been able to pay bonuses to top management under a local regulation. That has emerged as a stumbling block in the current search for a new chief executive officer, after Robert Swaak said he would step down, Bloomberg has reported.
Heinen has said ABN Amro should to be able to find a good replacement without having to offer a higher compensation. BLOOMBERG
