ABN Amro Group NV, the Dutch bank nationalized in 2008, is eliminating 40 jobs after closing its Delta One Arbitrage equity-derivatives division to reduce risk.
“These activities are not directly client-driven and do not fit in with the moderate risk profile ABN Amro strives for,” Jeroen van Maarschalkerweerd, a spokesman for the Amsterdam-based company, said by phone today.
The derivatives operations, which concerned the inter-bank market, were halted with immediate effect and the move was announced internally last week, he said. ABN Amro will cut staff in Amsterdam, New York, London, Frankfurt and Hong Kong at the unit, which was generating revenue and wasn’t ended because its trading would lose money, the spokesman said. Derivatives executed for clients will be done by another desk.
Chief Executive Officer Gerrit Zalm has said he wants to steer clear of the investment-banking operations ABN Amro Holding NV had before the 2007 sale and splintering of what was then the largest Dutch bank. The company wants to limit its investment banking to activities that are directly in customers’ interest and executed at clients’ request, van Maarschalkerweerd said today.
Zalm heads a bank that has shrunk to 23,429 employees and now generates 83 percent of its operating income from its home Dutch market. That compares to almost 108,000 employees and 21 percent, respectively, in 2006.
Royal Bank of Scotland Group Plc, Spain’s Banco Santander SA and Fortis bought ABN Amro in 2007 for about 72 billion euros ($95 billion) in the world’s biggest banking takeover. The aftermath of the deal led to the nationalizations of RBS and Fortis.
Zalm plans to strengthen the bank’s position in the Netherlands while selectively expanding its international network to serve Dutch customers. He is bidding to generate growth from activities including trade and commodities finance, equities and derivatives clearing and private banking.
“What we definitely are not planning to do is rebuild a London-style investment bank, trading in second-hand products,” he told reporters in March, after the lender picked up a team of 70 investment bankers from RBS’s Dutch unit.
Other operations in the bank’s markets division won’t be affected, Van Maarschalkerweerd said today. Christmas drinks in the Amsterdam unit were canceled after the announcement, which was made to staff last week.
The Netherlands bought Fortis’s Dutch banking and insurance units and its stake in ABN Amro Holding NV in 2008 after the company ran out of short-term funding. Following a 30 billion-euro bailout, the Dutch government is studying options to return the bank to the market.