SNS Reaal NV, the Dutch lender nationalized this year, explored selling its bank operations to ABN Amro Group NV and disposing of its insurance arm in 2012 as its situation worsened, its chairman told lawmakers.
“In May 2012 we acknowledged the financial situation at SNS Reaal was worsening,” acting Chairman Piero Overmars, who was vice-chairman at the time, said today at a hearing in the Hague investigating the nationalization. “We foresaw the capital ratio would decline in the third quarter, and at that time we knew we could not continue on a standalone basis.”
Overmars said the plan to sell to ABN Amro, state-owned itself since 2008, was abandoned on concern a deal would be blocked by the European Commission. The Dutch central bank disclosed last month that it had proposed a four-way deal that would have seen ABN, ING Groep NV and Rabobank NV buy and split up SNS’s assets, only to be rejected by the European antitrust regulator. The Commission has forced Dutch banks to sell assets and barred them from purchases after they received state aid in the financial crisis.
“We thought it would not be seen as an acquisition but as a participation in a safety net,” making the rejection a surprise, Jan Sijbrand, executive director of the Dutch central bank, told lawmakers today. “We decided in January this year that we did not want to get into lengthy legal procedures involving all the large Dutch banks.”
Finance Minister Jeroen Dijsselbloem took control of Utrecht-based SNS Reaal on Feb. 1 after losses on real estate loans brought the lender to the brink of collapse. The state seized the bank’s shares and subordinated loans, a move that was upheld by the highest Dutch administrative court on Feb. 25.
Overmars was member of the board of directors of ABN Amro in 2006, when it sold the property-finance division of Bouwfonds to SNS Reaal. Financial problems at this division, which was renamed SNS Property Finance, led to the nationalization of SNS. Overmars told lawmakers he was not involved in the transaction at that time.