Open main menu

Wikipedia Search
ABN AMRO
Read in another language
Watch this page
Edit
ABN AMRO Bank N.V. is a Dutch bank with headquarters in Amsterdam. ABN AMRO Bank is
the third-largest bank in the Netherlands.[5] It was re-established in its current form in 2009,
following the acquisition and break-up of the original ABN AMRO by a banking consortium
consisting of Royal Bank of Scotland Group, Santander Group and Fortis. Following the collapse
of Fortis, who acquired the Dutch business, it was nationalized by the Dutch government along
with Fortis Bank Nederland.[6] It was relisted as a public company again in 2015.

ABN AMRO Bank N.V.

ABN-AMRO Logo new colors.svg
Type
Subsidiary
Industry
Financial services
Founded
1991; 28 years ago
Headquarters
Amsterdam, Netherlands
Key people
Kees van Dijkhuizen (CEO)
Products
Asset management
Commercial banking
Investment banking
Private banking
Retail banking
Operating income
Increase 9.290 billion Euros (2017)[1]
Net income
Increase 2.791 billion Euros (2017)[1]
AUM
Increase 183.7 billion Euros (2014)[2]
Total assets
Decrease 392.4 billion Euros (September 30, 2018)[3]
Total equity
Increase 21.29 billion Euros (September 30, 2018)[3]
Number of employees
Decrease 18,720 (September 30, 2018)[3]
Parent
ABN AMRO Group
Divisions
Retail Banking, Private Banking, Commercial Banking, Corporate & Institutional Banking, Group
Functions[4]
Website
www.abnamro.com
The bank is a product of a long history of mergers and acquisitions that date to 1765. In 1991,
Algemene Bank Nederland (ABN) and AMRO Bank (itself the result of a merger of the
Amsterdamsche Bank and the Rotterdamsche Bank in the 1960s) agreed to merge to create the
original ABN AMRO. By 2007, ABN AMRO was the second-largest bank in the Netherlands and
the eighth-largest in Europe by assets. At that time the magazine The Banker and Fortune Global
500 placed it 15th[7] in the list of world's biggest banks and it had operations in 63 countries, with
over 110,000 employees.

In October 2007, a consortium of the Royal Bank of Scotland Group, Fortis and Banco Santander,
known as RFS Holdings B.V. acquired the bank, in what was the world's biggest bank takeover to
date. Consequently, the bank was divided into three parts, each owned by one of the members of
the consortium. However, RBS and Fortis soon ran into serious trouble: the large debt created to
fund the takeover had depleted the banks' reserves just as the financial crisis of 2007–2010 started.
As a result, the Dutch government stepped in and bailed out Fortis in October 2008, before
splitting ABN AMRO's Dutch assets (which had primarily been allocated to Fortis) from those
owned by RBS, which were effectively assumed by the UK government due to its bail-out of the
British bank. The operations owned by Santander, notably those in Italy and Brazil, were merged
with Santander, sold or eliminated.

The Dutch government appointed former Dutch finance minister Gerrit Zalm as CEO to
restructure and stabilise the bank, and in February 2010 the assets it owned were legally demerged
from those owned by RBS.[8] This demerger created two separate organisations, ABN AMRO
Bank N.V. and The Royal Bank of Scotland N.V.[9][10] The former was merged with ABN
AMRO Private Banking, Fortis Bank Nederland, the private bank MeesPierson (formerly owned
by the original ABN AMRO and Fortis) and the diamond bank International Diamond & Jewelry
Group to create ABN AMRO Group N.V., with the Fortis name being dropped on 1 July 2010. The
remaining parts of the original ABN AMRO still owned by The Royal Bank of Scotland N.V.,
meanwhile, were renamed, sold or closed.[11]

The Dutch government has said that ABN AMRO would remain state-owned until at least 2014.
On November 20, 2015, the Dutch government publicly re-listed the company through an IPO and
sold 20% of the shares to the public.[12]

History
Edit

See also the articles on AMRO Bank and Algemene Bank Nederland
Early years
Edit
In 1824, King William I established the Nederlandsche Handel-Maatschappij (NHM) a trading
company to revive trade and financing of the Dutch East Indies and it would become one of the
primary ancestors of ABN AMRO. The NHM merged with the Twentsche Bank in 1964 to form
Algemene Bank Nederland (ABN). In the same year, the Amsterdamsche Bank, established in
1871, merged with the Rotterdamsche Bank, established in 1873 (as part of merger that included
Determeijer Weslingh & Zn. from 1765), to form Amsterdamsche en Rotterdamsche Bank.

ABN and AMRO merger

Edit
In 1991, ABN and AMRO Bank agreed to merge to create ABN AMRO.

Through these mergers and acquisitions, ABN AMRO gained a large number of overseas
companies and branches. From NHM, it owned a significant branch network in Asia and the
Middle East. One of these, the Saudi Hollandi Bank was owned by the NHM Jeddah branch and in
which ABN AMRO still had a 40% stake, caused questions in the Dutch parliament from the
political Party for Freedom. Another, the Hollandsche Bank-Unie (HBU), which grew from the
merger of the Hollandsche Bank voor de Middellandsche Zee (HBMZ) and the Hollandsche Zuid-
Amerika Bank in 1933, gave ABN AMRO an extensive network of branches in South and Central
America. In 1979, ABN expanded into North America with the acquisition of Chicago-based
LaSalle National Bank.

After the merger of ABN and AMRO Bank in 1991, the corporation continued to grow through a
number of further acquisitions, including the 1996-purchase of suburban Detroit based Standard
Federal Bank followed five-years later by the acquisition of its Detroit-based competitor Michigan
National Bank which was rebranded as Standard Federal. In 2005, Standard Federal became
LaSalle Bank Midwest to unite the two components.

ABN AMRO purchased The Chicago Corporation, an American securities and commodities
trading and clearing corporation in fall 1995.[13]

Other major acquisitions included the Brazilian bank Banco Real in 1998 and the Italian bank
Antonveneta in 2006. It was also involved in the controversial acquisition of the Dutch local
government mortgage and building development organisation, the Bouwfonds in 2000.[14] ABN
AMRO sold the Bouwfonds as a going concern in 2006.

Reaching a crossroads
Edit
ABN AMRO had come to a crossroads in early 2005. The bank had still not come close to its own
target of having a return on equity that would put it among the top-five of its peer group, a target
that the CEO, Rijkman Groenink had set upon his appointment in 2000. From 2000 until 2005,
ABN AMRO's stock price stagnated.

Financial results in 2006 added to concerns about the bank's future. Operating expenses increased
at a greater rate than operating revenue, and the efficiency ratio deteriorated further to 69.9%.
Non-performing loans increased considerably year on year by 192%. Net profits were only
boosted by sustained asset sales. In 2006, research findings were publicly released regarding ABN
AMRO Bank N.V. predecessors and connections to African slavery. An examination of 200
predecessors of ABN AMRO Bank N.V. founded before 1888, determined that some had
connections to African slavery, either in the United States or elsewhere in the Americas.[15]

There had been some calls, over the prior couple of years, for ABN AMRO to break up, to merge,
or to be acquired. On 21 February 2007, The Children's Investment Fund Management (TCI)
hedge fund called to ask the Chairman of the Supervisory Board to actively investigate a merger,
acquisition or breakup of ABN AMRO, stating that the current stock price did not reflect the true
value of the underlying assets. TCI asked the chairman to put its request on the agenda of the
annual shareholders' meeting to be held in April 2007.

Events accelerated on 20 March, when the British bank Barclays and ABN AMRO both confirmed
they were in exclusive talks about a possible merger.

Acquisition battle
Edit
On 28 March 2007, ABN AMRO published the agenda for the shareholders' meeting of 2007. It
included all items requested by TCI, but with the recommendation not to follow the request for a
breakup of the company.[16]

ABN AMRO Insurance headquarters in Zwolle

However, on 18 April, another British bank, the Royal Bank of Scotland (RBS) contacted ABN
AMRO to propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and
Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for ABN
AMRO and thereafter divide the components of the company among them. According to the
proposed deal, RBS would receive ABN's United States operations, LaSalle, and ABN's wholesale
operations; Banco Santander would take the Brazilian operations; and Fortis, the Dutch
operations.

On 23 April, ABN AMRO and Barclays announced the proposed acquisition of ABN AMRO by
Barclays. The deal was valued at €67 billion and included the sale of LaSalle Bank to Bank of
America for €21 billion.[17]

Two days later, the RBS-led consortium brought out its indicative offer, worth €72 billion, if ABN
AMRO would abandon its sale of LaSalle Bank to Bank of America. During the shareholders'
meeting the next day, approximately 68 percent of the shareholders voted in favour of the breakup
as requested by TCI.[18]

The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid, which
hinged on further access to the US markets, in order to expand on the success of the group's
existing American brands, Citizens Bank and Charter One. On 3 May 2007, the Dutch Investors'
Association (Vereniging van Effectenbezitters), with the support of shareholders representing up
to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, seeking
an injunction against the LaSalle sale. The court ruled that the sale of LaSalle could not be viewed
apart from the current merger talks of Barclays with ABN AMRO, and that the ABN AMRO
shareholders should be able to approve other possible merger/acquisition candidates in a general
shareholder meeting. However, in July 2007, the Dutch Supreme Court ruled that Bank of
America's acquisition of LaSalle Bank could proceed and Bank of America absorbed LaSalle
effective 1 October 2007.

On 23 July 2007, Barclays raised its offer for ABN AMRO to €67.5bn, after securing investments
from the governments of China and Singapore, but it was still short of the RBS consortium's offer.
Barclay's revised bid was worth €35.73 a share — 4.3% more than its previous offer. The offer,
which included 37% cash, remained below the €38.40-a-share offer made the week before by the
RFS consortium. The revised offer did not include an offer for La Salle Bank, since ABN AMRO
could proceed with the sale of that subsidiary to Bank of America. RBS would now settle for
ABN's investment-banking division and its Asian Network.

Acquisition and break up

Edit
On 30 July 2007, ABN AMRO withdrew its support for Barclays' offer which was lower than the
offer from the group led by RBS. While the Barclays offer matched ABN AMRO's "strategic
vision," the board couldn't recommend it from "a financial point of view." The US$98.3bn bid
from RBS, Fortis and Banco Santander was 9.8% higher than Barclays' offer.

Barclays Bank withdrew its bid for ABN AMRO on 5 October, clearing the way for the RBS-led
consortium's bid to go through, along with its planned dismemberment of ABN AMRO. Fortis
would receive ABN AMRO's Dutch and Belgian operations, Banco Santander would get Banco
Real in Brazil, and Banca Antonveneta in Italy and RBS would get ABN AMRO's wholesale
division and all other operations, including those in Asia.

Impact of the 2008 financial crisis

Edit
RBS
Edit
Further information: Royal Bank of Scotland Group § 2008–2009 financial crisis

ABN AMRO in Dubai

On 22 April 2008, RBS announced the largest rights issue in British corporate history, which
aimed to raise £12billion in new capital to offset a writedown of £5.9billion resulting from the bad
investments and to shore up its reserves following the purchase of ABN AMRO.

On 13 October 2008, British Prime Minister Gordon Brown announced a UK government bailout
of the financial system. The Treasury would infuse £37 billion ($64 billion, €47 billion) of new
capital into Royal Bank of Scotland Group Plc, Lloyds TSB and HBOS Plc, to avert financial
sector collapse. This resulted in a total government ownership in RBS of 58%. As a consequence
of this rescue, the chief executive of the group Fred Goodwin offered his resignation, which was
duly accepted.

In January 2009, RBS announced a loss of £28bn of which £20bn was due to the ABN AMRO
acquisition.[19] At the same time, the government converted its preference shares to ordinary
shares resulting in a 70% ownership of RBS.[20]

Fortis
Edit
Further information: Fortis (finance) § ABN AMRO and its aftermath

ABN AMRO headquarters in Amsterdam

On 11 July 2008, Fortis CEO Jean Votron stepped down after the ABN AMRO deal had depleted
Fortis's capital.[21][22] The total worth of Fortis, as reflected by its stock value, was at that time
one-third of what it had been before the acquisition, and just under the value it had paid for the
Benelux activities of ABN AMRO.[23]

Fortis announced in October of that year that it would sell its stake in RFS Holdings, which
included all activities that had not been transferred yet to Fortis (i.e. everything except asset
management).[24][25]

Disposals and renaming

Edit
In 2008, RFS Holdings completed the sale of a portfolio of private equity interests in 32 European
companies managed by AAC Capital Partners to a consortium comprising Goldman Sachs,
AlpInvest Partners and the Canada Pension Plan for $1.5 billion through a private equity
secondary market transaction.[26][27]

In September 2009, RBS rebranded the Morgans sharedealing business in Australia as RBS
Morgans. This followed the rebranding of the ABN AMRO Australia unit to RBS Australia in
March that year.[28]

On 10 February 2010, RBS announced that branches it owned in India[29] and the United Arab
Emirates were to be rebranded under its name.[30] HSBC Holdings said it would buy the Indian
retail and commercial banking businesses of Royal Bank of Scotland for $1.8bn, however the deal
fell-through in December 2012.[31]

Dutch government ownership

Edit
Continuing problems with Fortis operations during the 2008 financial crisis led to the Dutch
government to obtain full control of all Fortis operations in the Netherlands, including those parts
of ABN-AMRO then belonging to Fortis, at a price of €16.8bn.[32] The government and the De
Nederlandsche Bank president have announced the merger of Dutch Fortis and ABN AMRO parts
will proceed while the bank is in state ownership. This was completed in July 2010 when Fortis
operations in the Netherlands were rebranded ABN AMRO.[33]

In November 2008, a Belgian court dismissed a suit by shareholders of Fortis objecting to the
Belgian government's handling of the Fortis/ABN AMRO transaction and subsequent break-up.
[34]

ABN AMRO acquired the specialist on-line mortgage provider Direktbank Hypotheken as part of
the nationalisation and from the 1 January 2011 it stopped selling these products under this brand
to the public. It absorbed the mortgage business into its own products under the ABN AMRO
brand as well as Florius brand.[35]

Goldman Sachs SEC lawsuit

Edit
Main article: Goldman Sachs civil fraud lawsuit
ABN AMRO was mentioned by the United States Securities and Exchange Commission (SEC) in
court filings when it sued Goldman Sachs and one of Goldman's collateralized debt obligation
(CDO) traders on 16 April 2010. The SEC alleges that Goldman defrauded both IKB Deutsche
Industriebank and ABN AMRO by its failure to disclose that the CDOs it sold to both banks were
not assembled by a third party, but instead through the guidance of a hedge fund that was
counterparty in the CDS transaction. This hedge fund, Paulson & Co., stood to reap great financial
benefit in the event of default.[36][37]

Default on gold delivery contracts

Edit
In March 2013, ABN AMRO issued a letter to its gold contract customers notifying that it would
default on its obligation to deliver allocated gold to its clients. By taking advantage of legal tender
laws, the firm offered to compensate the loss to its clients using Fiat money rather than actual
gold.[38]

Bank operations
Edit

ABN AMRO Bank has offices in 15 countries with 32,000 employees, most of whom are based in
the Netherlands with only 5,000 in other countries. Its operations include a private banking
division which focuses on high-net-worth clients in 14 countries as well as commercial and
merchant banking operations that play a major role in energy, commodities and transportation
markets as well as brokerage, clearing, and custody.[39]

Financial data
Edit

Financial data [40]

Years 2002 2003 2004 2005 2006
Sales net of interest €18,280mn €18,793mn €19,793mn €23,215mn €27,641mn
EBITDA €4,719mn €5,848mn €6,104mn €6,705mn €6,360mn
Net Result Share of the group €2,267mn €3,161mn €4,109mn €4,443mn
€4,780mn
Staff105,000 105,439 105,918 98,080 135,378
Alumni
Edit

Vladimer Gurgenidze - Prime Minister of Georgia (2007-2008)

John Hewson - Member of the Australian House of Representatives (1987-1995)
Graeme Le Saux - English football player
Marketing
Edit

Name usage and spelling

Edit
The bank refers to itself as ABN AMRO in all capitals, based on an acronym of the two
originating banks names Algemene Bank Nederland and the Amsterdam and Rotterdam Bank, in
the second case the first two letters of each town make up the word AMRO. The letters in 'ABN'
are pronounced separately and 'AMRO' is pronounced as a word. For this reason some media spell
the name as 'ABN Amro'. In written text both versions are used, although the bank itself uses only
the uppercase version. In conversations, the bank is sometimes referred to as simply ABN or
AMRO bank depending on one's location around the world.

Logo and style

Edit
The green and yellow shield logo was designed by Landor Associates for ABN AMRO in 1991
and has been used as a brand for the bank and all its subsidiaries.

Sponsorships
Edit
ABN AMRO was the main sponsor of Dutch football club AFC Ajax of Amsterdám between from
1991 to 2008. The sponsor logo was (at the time) the only one in the world to be printed vertically
down the right hand side of the front of the shirt. As of 2014 ABN AMRO is one of the strategic
industry partners with Duisenberg school of finance.[41]

See also

References

External links

Last edited 20 days ago by HangingCurve

Wikipedia

Content is available under CC BY-SA 3.0 unless otherwise noted.

Terms of UsePrivacyDesktop

EX-8.1 15 dp21779_ex8-1.htm EXHIBIT 08-01

EXHIBIT 8.1

Principal subsidiaries of the Royal Bank of Scotland Group plc

Nature of business
Country of incorporation and principal area of operation
Group interest
The Royal Bank of Scotland plc
Banking
Great Britain
100%
National Westminster Bank Plc (1)
Banking
Great Britain
100%
Citizens Financial Group, Inc.
Banking
US
100%
Coutts & Company (2)
Private banking
Great Britain
100%
RBS Securities Inc.
Broker dealer
US
100%
RBS Insurance Group Limited
Insurance
Great Britain
100%
Ulster Bank Limited (3)
Banking
Northern Ireland
100%
RBS Holdings N.V. (4)
Banking
The Netherlands
98%

Notes:
(1)
The company does not hold any of the NatWest preference shares in issue.
(2)
Coutts & Company is incorporated with unlimited liability. Its registered office is 440 Strand,
London WC2R 0QS.
(3)
Ulster Bank Limited and its subsidiaries also operate in the Republic of Ireland.
(4)
RFS Holdings B.V. (RFS) owns 100% of the outstanding shares of RBS Holdings N.V. (ABN
AMRO Holding N.V. prior to 1 April 2010). Until 31 December 2010, the company owned 38%
of RFS; the balance of shares were held by the State of the Netherlands, successor to Fortis N.V.,
Fortis SA/NV, and Banco Santander S.A. (the consortium members). Although the company did
not control a majority of the voting rights in RFS, through the terms of the Consortium and
Shareholders' Agreement and RFS's Articles of Association, it controlled the board of RFS and
RFS is a subsidiary of the company. RFS Holdings has substantially completed the separation of
the business units of ABN AMRO Holding N.V. As part of this reorganisation, on 6 February
2010, the businesses of ABN AMRO Holding N.V. acquired by the Dutch State were legally
demerged from the ABN AMRO Holding N.V. businesses acquired by the Group and were
transferred into a newly established holding company, ABN AMRO Bank N.V. (save for certain
assets and liabilities acquired by the Dutch State that were not part of the legal separation and
which will be transferred to the Dutch State as soon as possible). Legal separation of ABN AMRO
Bank N.V. occurred on 1 April 2010, with the shares in that entity being transferred by RBS
Holdings N.V. to a holding company called ABN AMRO Group N.V., which is owned by the
Dutch State. Following legal separation, RBS Holdings N.V. has one direct subsidiary, The Royal
Bank of Scotland N.V. (RBS N.V.), a fully operational bank within the Group. RBS N.V. is
independently rated and regulated by the Dutch Central Bank. On 31 December 2010, the
shareholdings of RFS were amended such that approximately 98% of its issued share capital is
now held by the company with the remainder owned by the State of the Netherlands and Banco
Santander S.A. Certain assets within RBS N.V. continue to be shared by the Consortium
Members. On the division of an entity by demerger, Dutch law establishes a cross liability
between surviving entities in respect of the creditors at the time of the demerger. RBS N.V.’s cross
liability is limited by law to the lower of its equity and the debts of ABN AMRO Bank N.V. on 1
April 2010. The likelihood of any cross liability crystallising is considered remote.

The above information is provided in relation to the principal related undertakings as permitted by
Section 410(2) of the Companies Act 2006. Full information on all related undertakings is
included in the Annual Return delivered to the Registrar of Companies for Scotland.