Dutch agree more funding for ABN Amro
The Dutch government yesterday said it would have to inject another €3bn (£2.7bn) into nationalised bank ABN Amro, which will raise the national debt with no immediate return for the state.
The finance ministry also said that a long-negotiated ABN asset sale to Deutsche Bank was worth €700m, but could collapse unless parliament approves it by 31 December.
However, Deutsche Bank declined to comment.
The government has now committed more than €23bn in the last 13 months to ABN Amro and the nationalisation process, making it one of the world’s costliest bailouts since the financial crisis began.
The state took control of the local operations of Fortis, including ABN Amro, for €16.8bn in October 2008, a year after a consortium including Fortis and Royal Bank of Scotland (RBS) bought ABN .
“I doubt that this is the last capital injection,” said Arnoud Boot, professor of corporate finance and financial markets at the University of Amsterdam. “Undoubtedly there will be a few billion more along the way.”
But finance minister Wouter Bos made clear he meant for yesterday’s infusion to be the last.
He said: “It is our intention that this is the last time money goes to ABN. If, under normal circumstances, there will be a situation that capital is needed, they have to find a solution on their own and not come back to us again.”
In addition to the €3bn cash, the government said €1.4bn in long-term bonds would be converted to equity for ABN Amro, making the total infusion €4.4bn.
The government had already pumped another €2.5bn into ABN Amro this summer to help fund the split of the state-owned assets from assets legally owned by RBS.