The Dutch government proposes to integrate parts of ABN AMRO Bank NV and Fortis Bank Nederland by injecting an additional €4.4 billion ($6.6 billion) and create a strong, stable and profitable bank with a focus on service to Dutch customers.
"An additional and to be expected last capital injection of €3 billion in cash is necessary for the hiving-off the business units, the merger into a new bank, and the capital requirements of the regulator. In addition, loans amounting to €1.4 billion will be converted into equity," Dutch minister of finance Wouter Bos said in a letter to parliament yesterday.
ABN AMRO was acquired by a consortium of Fortis, Royal Bank of Scotland (RBS) and Santander, in October 2007, for €70 billion, making it the biggest takeover in banking history. (See: Royal Bank of Scotland- Fortis- Santander consortium acquires ABN Amro in world''s biggest banking takeover)
A year later, the Dutch state bought the Fortis Bank Nederland, including its interests in ABN AMRO, for €16.8 billion, and replaced Fortis as a stakeholder in RFS Holdings BV, which manages ABN AMRO.
The Dutch interest in ABN AMRO includes its business units Netherlands Private Banking and International Diamond & Jewelry Group. These businesses will be split to form a newly created 'ABN AMRO', while RBS will change brand name of its acquired businesses of ABN AMRO Bank NV into RBS NV.
In order to facilitate the merger of ABN AMRO and Fortis Nederland, the Dutch government has concluded an agreement in principle for the selling ABN AMRO's subsidiaries, new HBU (Hollandse Bank Unie) and IFN Finance, to Germany's Deutsche Bank for €700 million.