Dutch government sets ABN AMRO share sale plans in motion

The Dutch government plans to sell lender ABN AMRO in an initial public offering (IPO) a year from now but is unlikely to recoup its costs.

It put the value of the state-owned bank at about €15 billion – above some analysts' estimates and well below the total that the Netherlands poured into the bank's 2008 rescue and later additional funds.

"We will get as good a price as possible," said prime minister Mark Rutte yesterday. "The chance of selling with a profit is small. We will decide in a year if it is time and in the meantime we will ask ABN AMRO to get ready for a listing."

By comparison, Britain is expected to make a profit when it sells part of its 39 per cent stake in Lloyds Banking Group , possibly next month. However, its sale of Royal Bank of Scotland, whose disastrous €70 billion-plus acquisition of ABN in 2007 cost the British and Dutch governments dearly, looks a long way off.

"The (finance) minister's plans are the first step towards entering the private market . . . the first opportunity for an IPO would be the first half of 2015," said ABN AMRO chief executive Gerrit Zalm.

The Dutch government paid nearly €40 billion to rescue the domestic financial sector in 2008, when it provided capital injections for banking and insurance group ING, insurer Aegon and financial group SNS Reaal, as well as nationalising ABN AMRO.

Five years later the Dutch global banks are shadows of their former selves after divestments and thousands of job cuts have left them largely focused on their domestic market and European back yard.

The rescue of ABN AMRO and related entities cost €16.8 billion, with subsequent support lifting the cost to €27.9 billion, said the finance ministry.

ABN AMRO yesterday reported second-quarter net profit down 3 per cent to €402 million from the first three months as impairment charges increased by €292 million. – (Reuters)