ABN AMRO

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ABN AMRO Holding N.V.
File:Abnamro logo.gif
Company type	Public (Euronext: AAB, NYSE: ABN)
Industry	Financial services
Founded	1991
Headquarters	Amsterdam, the Netherlands
Key people	Rijkman Groenink, CEO
Products	Asset management Commercial banking Investment banking Private banking
Revenue	€19.827 billion (2005)
Operating income	8,618,000,000 Euro (2023)
Net income	2,697,000,000 Euro
Total assets	369,970,000,000 Euro (2023)
Number of employees	105,000
Website	www.abnamro.com

ABN AMRO (Euronext: AAB, NYSE: ABN) is one of the largest banks in Europe and has operations all over the world, its history going back to 1824. It is the result of the merger in 1991 of Algemene Bank Nederland (ABN) and the Amsterdamsche-Rotterdamsche Bank (AMRO).

ABN AMRO Holding N.V. is the name of the holding company, which is listed on Euronext Amsterdam as part of the AEX index and the New York Stock Exchange, among other exchanges. Its main subsidiary is ABN AMRO Bank N.V.

On April 23 2007, Barclays annouced an agreement to buy ABN AMRO in an all-share €67 billion deal, according to Barclays' John Varley "the largest merger ever in the global financial services and the biggest cross-border transaction". In the Barclays offer, ABN AMRO would also sell its US division, Chicago-based LaSalle Bank, to Bank of America in a US$21 billion deal, giving the largest bank of the US a heightened presence in the Upper Midwest of that country. However three other banks, Royal Bank of Scotland, Fortis and Banco Santander, acting as a consortium had put forth a competing offer of US$98 billion for the bank.

Build up to Acquisition

ABN AMRO had come to a crossroads in the beginning of 2007. The bank had still not come close to their own target of being in the top 5 of their peer group measured on ROE, a target that was set in 2000 by the then just appointed CEO Rijkman Groenink. From 2000 till 2006, the ABN AMRO stock price had remained more or less stagnant.

The financial results for the FY 06 added to concerns about the bank's future. Operating expenses increased at a greater rate than operating revenue reflecting greater operating results difficulties. The efficiency ratio deteriorated further to 69.9%. Non performing loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales.

There had been some calls over the last couple of years for ABN AMRO to merge or to be acquired. On February 21 2007, these calls became very concrete, when the TCI hedge fund asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or break up of ABN AMRO, stating that the current stock price didn't reflect the true value of the underlying assets. TCI asked the chairman to put their request on the agenda of the annual shareholders meeting of April 2007.

Events accelerated when on March 20 2007, Barclays and ABN AMRO both confirmed they were in exclusive talks about a possible merger. On March 28 2007, ABN AMRO published the agenda for the shareholding meeting of 2007. It included all items requested by TCI, but with the recommendation not to follow the request for a break up of the company.

However, on April 13 2007, Royal Bank of Scotland contacted ABN AMRO to propose a deal in which a consortium of banks including RBS, Fortis and Banco Santander Central Hispano will jointly bid for ABN AMRO and thereafter, break up the different divisions of the company. According to the proposed deal, RBS would takeover ABN's Chicago operations, LaSalle, and possibly ABN's wholesale operations while Banco Santander would take the Brazilian operations and Fortis, the Dutch operations.

On April 23 2007, ABN AMRO and Barclays announced their proposed merger. The deal was valued at €67 billion. Part of the deal was the sell of the LaSalle Bank to Bank of America for €21 billion.

On April 25 2007 the RBS led consortium brought out their indicative offer worth €72 Billion, if ABN AMRO would abandoned its sale of LaSalle Bank to Bank of America. During the Shareholders meeting the next day a majority of about 68% of the shareholders voted in favour of the break up as requested by TCI.

It had become clear that the management of the bank faced strong opposition from their shareholders. The day after the shareholder meeting the Assocation of Dutch shareholders also brought ABN AMRO to court. The court ruled on May 3, 2007, that the sale of LaSalle could not be viewed apart from the current merger talks of Barclays with ABN AMRO, and that the ABN AMRO shareholders should be able to approve other possible merger/acquisition candidates in an general shareholder meeting. It is not clear yet what this means for the contractual obligation (stemming from the LaSalle sale agreement) ABN AMRO has towards Bank of America. Bank of America said later that day that it sees the agreement to purchase LaSalle from ABN AMRO as a binding contract, and that it will fight to protect its legal rights.

Business units

The business units of ABN AMRO are currently organised by regions:

The Netherlands
Europe (excluding the Netherlands)
North America
Latin America
Asia Pacific

Some of the specialty products and clients of ABN AMRO Bank have a global presence:

Private Clients
Global Clients
Global Markets
Transaction Banking
Consumer Banking
Asset Management

Further, the support functions of ABN AMRO are divided into two global business units:

Group Functions
Services

ABN AMRO ranks eighth in Europe and 13th in the world based on total assets, with more than 4,500 branches in 53 countries, a staff of over 110,000 full-time equivalents and total assets of €999 billion (as of September 30 2006).

The bank has developed a strategy of having three home markets: The Netherlands, the United States, and Brazil. The U.S. commercial banking operations of ABN AMRO consist of LaSalle Bank in Chicago, Illinois and LaSalle Bank Midwest in Detroit, Michigan which operate under the name LaSalle Bank Corporation. LaSalle Bank Midwest is the former Standard Federal Bank, which changed its name on September 12 2005. ABN AMRO also used to operate ABN AMRO Mortgage Group, one of the leading mortgage servicing companies in the US, but in January 2007 it sold this business to Citigroup. In Brazil, ABN AMRO's subsidiary is Banco Real. Banco Real recently completed an acquisition of Sudameris, a peer bank in the Brazilian market.

In 2005 ABN AMRO acquired Banca Antonveneta of Italy, this effectively gave it a fourth home market. Antonveneta had been a cooperation partner for some years and has a similar client base to ABN AMRO.

In March 2007 ABN AMRO announced that it was bidding US$227mn for a 93.4% stake in Pakistan's Prime Bank, and would tender for the remainder. Prime Bank is Pakistan's 19th largest bank and has 52 billion rupees worth of assets and 41 billion rupees in deposits. It has a network of 69 branches in 25 Pakistani cities. The acquisition, when combined with ABN AMRO's existing operations, would make ABN AMRO the second largest foreign bank in Pakistan (after Standard Chartered, and put it among the 10 largest banks in the country.

Offices

Headoffice ABN AMRO in Amsterdam
Headoffice ABN AMRO Insurance in Zwolle
Renzo Piano designed the Australian offices in Sydney

Trivia

ABN AMRO sponsors Ajax Amsterdam football club. The sponsor logo is the only one in the world to be printed vertically down the right hand side of the front of the shirt.
In 2005, ABN AMRO entered into a major IT outsourcing contract involving five vendors. This was notable for two reasons: It involved several vendors competing with each other, deviating from the usual exclusivity arrangements prevalent in most outsourcing contracts. Also, it was the largest contract that Indian firms Tata Consultancy Services and Infosys had signed with any Western company at the time.
ABN AMRO sponsors a number of racing sailboats including two entries in the Volvo Ocean Race. On May 18 2006 one of the crew Hans Horrevoets, 32, died after being swept overboard in high seas. Although the boat turned around and picked him up he never regained consciousness, and died.
The ABN AMRO-sponsored "ABN AMRO ONE" won the Volvo Ocean Race 2006
ABN AMRO is the founding partner of NEWS, the platform for Dutch students abroad.

References

External links

v t e AEX companies of the Netherlands
ABN AMRO Adyen Aegon Ahold Delhaize AkzoNobel ArcelorMittal ASM International ASML ASR Nederland BE Semiconductor DSM Firmenich EXOR Heineken IMCD ING KPN NN Group Philips Prosus Randstad RELX Shell Universal Music Group Unilever Wolters Kluwer

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