ABN Amro Fined $1.3 Million Over Deficiencies at Dubai Unit

Updated on
  • Dutch lender fined by authorities in Netherlands and U.A.E.
  • CEO Gerrit Zalm says case won't have any impact on IPO plans

ABN Amro Group NV, the Dutch state-owned lender preparing for an initial public offering, was fined more than $1.3 million after regulators found that it failed to control money-laundering risks at its private bank in Dubai.

The Dutch central bank fined ABN Amro 625,000 euros ($684,000), while the Dubai financial watchdog imposed $640,000 in penalties, Chief Executive Officer Gerrit Zalm said in a letter Wednesday to Dutch Finance Minister Jeroen Dijsselbloem. 

The bank accepts the findings and terminated its relationship with about 80 clients and a number of intermediaries. Zalm, a former finance minister, said at a press conference last week that there are “no signals” U.S. regulators are looking at the Dubai case.

The incident won’t affect ABN Amro’s IPO or valuation of the business, Dijsselbloem said in a letter to parliament. The Dutch government plans to sell shares in Amsterdam as soon as the fourth quarter after taking over the bank in a bailout seven years ago.

Earlier this year, nine employees in Dubai left after an internal probe showed they failed to comply with the bank’s guidelines. The investigation also found that some customers in the country didn’t meet the bank’s conditions to hold accounts.

ABN Amro’s “failings were widespread,” according to a statement by the DFSA.  The Dubai regulator reduced the amount of the fine to $640,000 from $1 million, after the lender self-reported the issues, cooperated fully with the investigation and took the “initiative to act quickly on the issues raised.”