The Dutch government is cutting its stake in ABN Amro Bank NV to below 50% through a sale of depositary receipts after a five-year hiatus in its disposal of the lender’s shares.
(Bloomberg) — The Dutch government is cutting its stake in ABN Amro Bank NV to below 50% through a sale of depositary receipts after a five-year hiatus in its disposal of the lender’s shares.
NLFI, the state body that holds the stake in the bank, will conduct the sale through a pre-arranged trading plan that will be executed by Citigroup Global Markets Europe, according to a statement Friday. Rothschild & Co is acting as the sole financial adviser to NLFI.
The announcement comes a year after Dutch Finance Minister Sigrid Kaag asked NLFI to reconsider conditions under which the state’s holding can be further reduced in the lender. The last such sale took place in September 2017, when the government sold a 7% stake for about €1.5 billion ($1.8 billion).
The Dutch state stepped in to rescue ABN Amro during the financial crisis from 2008, spending almost €22 billion in the process. Under government ownership, ABN Amro transformed itself from one of the world’s largest banks to a consumer lender focused on the Netherlands. ABN Amro returned as a publicly traded company in November 2015, after the government sold a 23% stake in an initial offering.
What Bloomberg Intelligence Says:
A welcome move by the Dutch government is the plan to cut its ABN Amro stake to below 50% from 56.3% — via the sale of depository receipts — signaling potential for the lender to return to majority private ownership. Acquired during the 2008 financial crisis, the sell-down follows ABN Amro’s strong 4Q report showing a revenue revival (consensus beat of 10%), 4% lower costs and a new €500 million share-buyback program. ABN Amro shares have outperformed peers by almost 50% over three months.
— Philip Richards, BI banking analyst
On Wednesday, ABN Amro reported fourth-quarter profit that beat analysts’ expectations as the Dutch lender restrained costs and announced a €500-million share buyback. The shares have gained 28% so far this year and are trading unchanged at €16.55 apiece as of 10:50 a.m. in Amsterdam.
Currently the government holds a stake of 56.3% in the lender, split into 49.9% shares and 6.4% depositary receipts. The trading plan will become operational in the coming days and will terminate when the maximum number of depository receipts have been sold, but can be renewed at NLFI’s discretion.
(Updates with details and analyst comment)
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