Dutch Finance Minister Jeroen Dijsselbloem said he plans to put ABN Amro Group NV’s initial public offering back on his government’s agenda “soon,” brushing off criticism that he mishandled management of salary increases at the state-owned lender.
“When it’s up to me,” the IPO of ABN Amro will ’’soon be on the agenda’’ of the council of ministers, Dijsselbloem told lawmakers in The Hague today. “But this requires the bank to take a number of steps,” he said.
Dutch parliament is debating the matter after lawmakers’ outrage at pay rises awarded to Amsterdam-based ABN Amro executives forced the government to delay the bank’s IPO. Dijsselbloem came under scrutiny after the bank’s management said he had promised to defend the increases.
“Why didn’t the minister immediately respond as soon as he learned about the salary increase at ABN Amro if he really thought it was damaging? What’s the value of the minister’s words?” Tony van Dijck, a member of Geert Wilders’s Freedom Party, said in parliament.
Dijsselbloem told ABN Amro executives that the pay increases were “unwise,” its chairman, Rik van Slingelandt, said in an earlier hearing this week in parliament, before charging that the minister had said he would defend the increases as being legal.
The finance minister has had to juggle questions about the control of corruption risks at ABN Amro while leading euro-area negotiations with Greece over its bailout program in his role as the Eurogroup chairman. Lawmakers are concerned the Dutch state will lose billions of euros from its 22 billion-euro ($24 billion) bailout of the lender on the cusp of the financial crisis.
Parliament was caught by surprise last month when ABN Amro’s annual report revealed six board members were paid an additional allowance of 100,000 euros in 2014. Several lawmakers have said Dijsselbloem never informed them of the pay hike and have criticized him for not taking into account the reaction of Dutch voters. They were particularly outraged as the bank simultaneously let workers go and froze salaries of other employees.
“I regret the situation that emerged,” Dijsselbloem said today. He considered getting rid of ABN’s board, which would be the only way to roll back the pay rises, but concluded that wasn’t “the right decision,” he said.
Two days after the IPO was put on ice, the executives handed back their pay increase.
“The bank didn’t notice it has a certain responsibility to the society being a state-owned bank,” said Harald Benink, a banking and finance professor at Tilburg University in the Netherlands. “If Dijsselbloem really didn’t want the salaries to increase, he could have stopped it.”
The Dutch government was forced to nationalize parts of the bank after a 71.9 billion-euro takeover of the business by three lenders ended with the company’s breakup. The IPO will probably be the biggest in Dutch history when it occurs.
Dijsselbloem introduced the European Union’s toughest caps on bonuses in the Dutch financial industry in 2013. The law limiting bonuses at banks and insurers to 20 percent of fixed salaries came into force last year. European Union rules ban bonuses exceeding twice fixed pay.