Dutch State Raises $1.68 Billion Selling 7% Stake in ABN Amro

  • State entity sells 65 million shares for EU22.75 apiece
  • Sale of shares adds to wave of European bank offerings

The Dutch state raised about 1.48 billion euros ($1.68 billion) from selling an additional 7 percent stake in ABN Amro Group NV, taking advantage of steady demand for European bank stocks as it progresses toward full privatization.

The government sold 65 million shares for EU22.75 apiece in an accelerated bookbuild, reducing its holding to 63 percent, NLFI, which manages the state’s financial investments, said Wednesday. The remaining shares in ABN Amro are subject to a lock-up period of 60 days following the settlement, NLFI said.

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 shares closed Wednesday at 23.24 euros.

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.

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