Money-strapped Fortis unloads Dutch commercial- and private-banking arms. Dutch-Belgian banking and insurance firm Fortis is selling the Dutch commercial- and private-banking parts of ABN Amro to Deutsche Bank for about $1.1 billion, about $471 million less than the net asset value of the businesses.

The Brussels- and Utrecht, Netherlands-based Fortis has also agreed to insure about $16 billion in risk-weighted assets against unexpected losses for an undisclosed period of time.

Raising money

Last year Fortis agreed to pay about $30 billion for the Dutch banking and asset-management units of Amsterdam-based ABN Amro. The sale of a portion of the business it had just agreed to buy was imposed on Fortis by European Union regulators as a condition for approving its part in the $100-billion, three-buyer takeover of ABN Amro.

It seems the price it agreed to pay for part of ABN Amro last year and unfavorable market conditions since then are taking a toll on Fortis. In addition to the fire-sale to Frankfurt-based Deutsche Bank, it just issued more shares and canceled a dividend payment in a bid to raise its capital reserve by approximately $13 billion.

The private-client business Fortis is selling to Deutsche Bank serves about 8,000 clients; the commercial-banking business has 35,000 customers. Altogether the businesses employ about 1,400.

The deal makes Deutsche Bank the Netherlands' fourth biggest commercial bank.

A few weeks ago, Zurich-based UBS agreed to pay an undisclosed amount for Amsterdam-based wealth-management boutique VermogensGroep.

Merrill Lynch is another firm looking to expand its standing as a wealth manager in the Netherlands. The wirehouse has just hired ex-Fortis private bankers Martijn Duijnstee, Rob van Duist and Floris van Zinnicq Bergmann and, to round off the business-owner focused team, brought private-client advisor Jeroen van Lom over from the Dutch wing of Brussels-based Bank Degroof. -FWR

Purchase reproduction rights to this article.