Europe clears the way for ABN Amro to restructure

The European Commission yesterday said it had approved restructuring plans for Dutch state-owned bank ABN Amro subject to a ban on acquisitions and a condition that it achieves margin targets.

The Dutch government nationalised the activities of ABN Amro in 2008 after the dramatic failure of a three-pronged hostile takeover by Royal Bank of Scotland, Fortis and Banco Santander.

The commission approval is another hurdle out of the way as ABN Amro is returned to a viable financial state and readied for a stock market listing in 2014 at the earliest. Finance minister Jan Kees de Jager said in January the state would keep its options open regarding its exit strategy, but that ABN Amro was more likely to be listed in an IPO than sold to another bank.

The bank welcomed the commission's decision but said it was too early to comment because it had not yet had time to go through the full report.

EU Competition Commissioner Joaquin Almunia said in a statement that the conditions set by the commission were intended to ensure that the aid was used to make the group viable in the long term and not used to finance "competition-distorting initiatives".

Tom Muller, analyst at Dutch private bank Theodoor Gilissen, said such conditions were to be expected, given the bank's size and state ownership.

"As one of the largest banks in the market is owned by the government they have to ensure a level playing field," Muller said.

The commission also said its investigation had found that the recapitalisation measures taken between October 2008 and January 2010 represented aid of between €4.2 billion (3.7bn) and €5.45bn.

The commission found that the purchase price of €12.8bn paid by the Dutch state for acquiring the bank assets were not considered as representing state aid as the money was not used to prop up the bank.

The ABN Amro assets in the Netherlands are currently being merged with the Dutch assets of the former Fortis banking group.