French bank is aiming for greater presence in the Netherlands via ABN Amro takeover
Will the former Fortis be fourteen years after a failed takeover attempt of ABN Amro? It is far from that yet, but on Friday it was announced that the French BNP Paribas – to which Fortis now belongs – had met with the Dutch Ministry of Finance to discuss a possible takeover of the bank.
The Dutch government has informed the French that it is not currently open to a sale of ABN Amro. But it is money: the Belgian Fortis took over ABN Amro in 2007, together with Banco Santander and Royal Bank of Scotland. When Fortis ran into problems at the beginning of the financial crisis, the Dutch government jumped in and took over ABN Amro. The Belgian branch of Fortis went to BNP Paribas in 2009.
Also read: BNP Paribas expressed interest in buying ABN Amro
The Dutch government subsequently brought Amro back to the stock exchange in ABN from 2015, but currently still owns 56.3 percent of the shares. Minister Sigrid Kaag (Finance, D66) said earlier this year that she had asked the NLFI, the foundation that manages the State’s participation in financial institutions, to consider how the interest in the bank could be further reduced.
According to Bloomberg, which first brought the news about the interest from BNP Paribas, even more interests in ABN have been reported to the ministry. It is not clear whether they visited the Dutch State like BNP Paribas.
One of the largest banks in Europe
Should BNP Paribas still want to pursue the interest and the ministry is open to negotiations, ABN Amro could merge into what is currently one of the largest banks in Europe. The French bank had a balance sheet total of 2.521 billion euros at the end of 2021. By way of comparison: ING had more than 937 billion euros on its balance sheet at that time, ABN 395 billion euros.
But important: Paribas has room to take. In recent years, European banks have abandoned the idea that they should be active all over the world. BNP is not developing compared to any development: it sold its part of the Bank of the West at the end of the year to focus more on Europe. The acquisition price of 16.3 billion euros will be used by the company, among other things, to buy back shares, acquire them and develop them.
Also read: Why are the shareholders of ABN Amro not satisfied?
Also for ABN Amro that they will present themselves less as a world bank. On landing, in 2006, the group had no fewer than 4,500 branches spread over 53. After the credit crisis in 2008 and 2009, banks gradually abandoned the idea of wanting to be active all over the world. Two years ago, CEO Robert Swaak announced in the international business branch. It contain until the closure of offices in the US, Australia and China.
It should ensure that they earn more on every dollar they earn.
BNP Paribas currently has a strong foothold in the Dutch market. The bank already has between 1,200 and 1,300 employees in the Netherlands, making it the largest foreign bank in its own words.
In 2018, banker Geert Lippens was appointed to lead the Dutch branch. He was given the task of achieving an annual turnover of 6 to 7 percent, something that has also been achieved in recent years. “For BNP Paribas it is an excellent region to invest in, not least in the Netherlands,” he said in the Netherlands two years ago. in the FD† “There is a lot in this corridor, a lot of industry and activity.”
Nevertheless, with the low interest rates in recent years, it had become more difficult for banks to realize substantial income growth by, for example, selling. Margins are under pressure, which can fuel acquisitions and mergers. Yet that has not happened in recent years: Commerzbank talked about a merger a few years ago, but those talks did not lead to a concrete result.
The ECB has previously announced that it welcomes the merger of banks. “If we will attract more to ourselves, we will therefore have to improve our market share,” said BNP director there about the Netherlands.
Paribas
In addition to the bank, BNP also has its own leasing company, Arval. The simple research center is already in the Netherlands. Lips about the Netherlands on your own website a good test country for all kinds of sustainability initiatives of the bank. “It’s not too small, but it’s not too big either.”
In addition to its current presence, the French bank also has a strong link to the Netherlands. Paribas, or Banque de Paris et des Pays-Bas in full, originated from a merger in 1872 between several banks, including an Amsterdam bank. When the French Société Générale wanted to take over Paribas in 1999, a bidding war with BNP arose. A year later, the merger of the two was a fact.
The investor sees a takeover of ABN Amro by BNP Paribas, as it turned out on Friday afternoon. The price was at a plus of more than 16 percent during the afternoon, but then fell back slightly. ABN Amro itself can respond to the interest of the French.