Dutch Government Signals Move To Float ABN AMRO

Tom Burroughes

27 October 2015

, the Netherlands-based group providing services including private banking, is gearing up to float on the stock exchange in one of the largest European IPOs since the financial crisis that saw it bailed out by the Dutch state in October 2008.

The Netherlands government intends to sell shares in as soon as the final quarter of this year. The government has said it may sell as much as 30 per cent of ABN AMRO in 2015.

The bank and government have been thought to be considering a share float for some time, conditional on the state of the market and general readiness of the bank.

ABN AMRO’s private bank is a significant player and among moves of recent years, bought the onshore German private banking business - Bethmann - of Credit Suisse, completing the move in 2014 (to see an interview with ABN AMRO and Bethmann about this transaction, see here). Bank executives told WealthBriefing last year that plans to float the whole Dutch group were on track. Such a move, if or when it goes ahead, will see it gain a march on the UK’s Royal Bank of Scotland, which was nationalised by the UK government around the same time amid the financial crisis.

“NL Financial Investments on behalf of the Dutch State, and ABN AMRO Group, confirm their intention to proceed with the next step towards an initial public offering and listing of ABN AMRO on Euronext Amsterdam. The intended IPO will consist of a secondary offering of depositary receipts representing shares in ABN AMRO,” according to a statement on the bank’s website today.

“Barring unforeseen circumstances, the offering could be launched as of Q4 2015,” the statement said.

“The group has made significant progress on improving its profitability, with return on equity increasing to13 per cent in the first half of 2015, assuming expected regulatory levies are included equally across the four quarters. The targeted annual dividend pay-out ratio is 50 per cent over the full year 2017, underpinned by a favourable Dutch macro-economic environment, a mix of capital generative and growth businesses, potential for further efficiencies and a strong capitalisation and asset quality,” the bank said.

In October 2008, the Dutch state nationalised Fortis Bank Nederland (Holding) including the Fortis’ owned part of the former ABN AMRO group.

The bank said the latest announcement is in line with the previously announced objective of the Dutch state to return the bank to the market “as soon as reasonably possible”, so long as the financial sector is sufficiently stable; there is sufficient interest in the market and the company is ready.

ABN AMRO Bank, Deutsche Bank, London Branch and Morgan Stanley & Co. International are acting as joint global coordinators and, together with Barclays Bank, Citigroup, Coöperatieve Centrale Raiffeisen-Boerenleenbank, ING Bank, JP Morgan and Merrill Lynch, as joint bookrunners for the Offering. Keefe, Bruyette & Woods and RBC Europe are acting as co-lead managers.

Third-quarter results are issued on 13 November.