Dutch to Sell $1.7 Billion ABN Amro Stake After Share Rally

  • Sale of 7% holding adds to wave of European bank offerings
  • State to reduce stake to 63%, with further sales planned

The Dutch state will sell an additional 7 percent of ABN Amro Group NV, a stake worth about 1.5 billion euros ($1.7 billion) at current prices, taking advantage of steady demand for European bank stocks as it progresses toward full privatization.

About 65 million shares will be sold in an accelerated bookbuild, bringing the government’s controlling stake down to 63 percent, NLFI, which manages the state’s financial investments, said Tuesday after markets closed. The Netherlands has gradually sold 30 percent of the lender over the past two years after bringing it back to the market.

The offering adds to some $44 billion of European bank shares sold or scheduled to be placed this year amid optimism about growth in the euro region. Wind-downs of several troubled lenders in Spain and Italy this year have also failed to dent confidence. Spanish Economy Minister Luis de Guindos said Tuesday that his country plans to sell further stakes in Bankia SA if there’s demand, after the state-owned lender agreed to take over Banco Mare Nostrum SA.

ABN Amro, once one of the world’s biggest banks, has refocused its business on domestic lending in the wake of its near collapse during the financial crisis. It returned as a publicly traded company in November 2015 when the government sold a 23 percent stake in an initial offering. The Dutch state plans to gradually sell down its holding.

ABN Amro has rallied about 10 percent this year, compared with a 6.8 percent gain in the 37-member Bloomberg Europe 500 Banks and Financial Services Index.

The bank recently has been reshuffling its senior ranks, replacing veterans of its state-brokered reorganization as it prepares for the return to full private ownership. In May, it announced that Delta Lloyd Chief Financial Officer Clifford Abrahams would take on the same role at the bank, replacing Kees van Dijkhuizen, who was named chief executive officer in January. ABN Amro also intends to appoint Tanja Cuppen from Rabobank North America as chief risk officer.

Margins are under pressure on loans due to low interest rates from the European Central Bank, though a lending push helped drive profit. Net interest income, the bank’s main source of revenue, rose 3 percent to 1.6 billion euros. Total loans rose by 4.5 billion euros in the first quarter compared with the final three months of 2017, driven by corporate lending and residential mortgages.

Other banks that sold shares this year include Deutsche Bank AG, Credit Suisse Group AG and UniCredit SpA, which raised a combined 25 billion euros. Banco Santander SA sought another 7 billion euros when it announced the acquisition of struggling rival Banco Popular SA this month.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE