Netherlands cuts ABN Amro stake to 10.5% through new share sale plan
The Dutch government will reduce its holding in ABN Amro from 20.7% to 10.5% through a fifth trading plan executed by BofA Securities Europe, preparing to end special information rights.
Accelerated share divestment
The Dutch government is cutting its stake in ABN Amro Bank NV from 20.7% to 10.5% through a new share sale program. NL Financial Investments (NLFI), the state holding entity managing government participations in financial institutions, announced the fifth pre-agreed trading plan on Wednesday. BofA Securities Europe will execute the sale of share certificates on behalf of the state over the coming period. Under the terms of the relationship agreement between ABN Amro and NLFI, special information rights granted to the state vehicle will automatically terminate once the public holding drops below 10%. The divestment forms part of the government's long-term plan to eventually return the bank entirely to private ownership.
- Before fifth plan
- 20.7 %
- Target under fifth plan
- 10.5 %
- Final government target
- 0 %
Background of state ownership
The Dutch state originally nationalised ABN Amro in 2008 for 16.8 billion euros to prevent a collapse during the global financial crisis. Officials deemed the lender too big to fail because a bankruptcy risked triggering a broader chain reaction across the Dutch banking sector. The state commenced the gradual reprivatisation process in 2015 by launching an initial public offering on Euronext Amsterdam. A previous share sale round announced at the end of July brought the state holding down to 20.7%, generating nearly 2.5 billion euros over a ten-month execution window. Rising valuations have increased the total proceeds from the divestment, raising the prospect that the state could fully recover its initial intervention costs or secure a modest net gain.
- Dutch government nationalises ABN Amro for 16.8 billion euros during the financial crisis
- ABN Amro returns to the stock market through an initial public offering
- State holding reduced to 20.7% after a sale generating almost 2.5 billion euros
- NLFI announces fifth trading plan to cut the holding to 10.5%
Strategic overhaul and acquisitions
Bank leadership reacted positively to the government's planned reduction in ownership. In an interview with Bloomberg TV, chief executive Marguerite Bérard welcomed the divestment as an orderly development for the institution.
We welcome the decision.
Bérard, who previously worked at BNP Paribas and assumed leadership of ABN Amro last year, is directing a wide restructuring of the lender. Her program includes cutting thousands of jobs and divesting less profitable divisions to streamline operations. ABN Amro is simultaneously pursuing targeted expansion in domestic retail banking through the agreed 960 million euro acquisition of NIBC Bank. In wealth management, the lender expanded its European footprint by buying the German private bank Hauck Aufhäuser Lampe.
Market reaction and financial targets
ABN Amro shares fell 1.3% in Amsterdam trading at 9:02 AM following the announcement on Wednesday. Despite the morning dip, the stock has gained roughly 40% since the start of the year, making it one of the strongest performers in the European banking sector. ABN Amro had a market capitalisation of approximately 34.5 billion euros at the close of trading on Tuesday. Under a strategic plan presented in November, Bérard established a goal of achieving a return on equity of at least 12% by 2028. The strategy also targets reducing the cost-to-income ratio to below 55% by that date.
