History

Early years
In 1824 King William I established the Nederlandsche Handel-Maatschappij (NHM) a trading company to revive trade and financing of the Dutch East Indies and it would become one of the primary ancestors of ABN AMRO. The NHM merged with the Twentsche Bank in 1964 to form Algemene Bank Nederland (ABN). In the same year the Amsterdamsche Bank which was established in 1871 merged with the Rotterdamsche Bank which was established in 1873 (as part of merger that included Determeijer Weslingh & Zn. from 1765) to form AMRO Bank. In 1991 ABN and AMRO Bank agreed to merge to create ABN AMRO. Through these mergers and acquisitions, ABN AMRO gained a large number of overseas companies and branches. From the NHM organisation it had a significant branch network in Asia and the Middle East. One of these the Saudi Hollandi Bank which was the old NHM Jeddah branch and in which ABN AMRO still had a 40% stake, caused questions in the Dutch parliament from the political Party for Freedom. Another the Hollandsche Bank-Unie (HBU), which was created from the merger of the Hollandsche Bank voor de Middellandsche Zee (HBMZ) and the Hollandsche Zuid-Amerika Bank in 1933, gave ABN AMRO an extensive network of branches in South and Central America. In 1979 ABN expanded into North America with the acquisition of Chicago based LaSalle National Bank. After the merger of ABN and AMRO Bank in 1991, ABN AMRO continued to grow through a number of further acquisitions, including in 1996 the purchase of suburban Detroit based Standard Federal Bank and in 2001 the Michigan National Bank both of which were rebranded as LaSalle National bank. ABN Amro purchased The Chicago Corporation, an American securities and commodities trading and clearing corporation in fall 1995.[8] Other major acquisitions included the Brazilian bank Banco Real in 1998 and the Italian bank Antonveneta in 2006. It was also involved in the controversial acquisition of the Dutch local government mortgage and building development organisation, the Bouwfonds[9] in 2000. ABN AMRO sold the Bouwfonds as a going concern in 2006.

Reaching a cross roads

ABN AMRO had come to a crossroads in the beginning of 2005. The bank had still not come close to its own target of having a return on equity that would put it among the top 5 of its peer group, a target that the CEO, Rijkman Groenink had set upon his appointment in 2000. From 2000 until 2005, ABN AMRO's stock price stagnated. Financial results in 2006 added to concerns about the bank's future. Operating expenses increased at a greater rate than operating revenue, and the efficiency ratio deteriorated further to 69.9%. Nonperforming loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales. There had been some calls, over the prior couple of years, for ABN AMRO to break up, to merge, or to be acquired. On February 21, 2007, the call came from the The Children's Investment Fund Management hedge fund which asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or breakup 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 the British bank Barclays and ABN AMRO both confirmed they were in exclusive talks about a possible merger.

Acquisition battle
On March 28, ABN AMRO published the agenda for the shareholders' meeting of 2007. It included all items requested by TCI, but with the recommendation not to follow the request for a breakup of the company.[10]

ABN AMRO Insurance headquarters in Zwolle. However, on April 18, another British bank, the Royal Bank of Scotland (RBS) contacted ABN AMRO to propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for ABN AMRO and thereafter break up the different divisions of the company between them. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle, and ABN's wholesale operations; while Banco Santander would take the Brazilian operations and Fortis, the Dutch operations. On April 23 ABN AMRO and Barclays announced the proposed acquisition of ABN AMRO by Barclays. The deal was valued at 67 billion. Part of the deal was the sale of LaSalle Bank to Bank of America for 21 billion.[11] Two days later the RBS-led consortium brought out their indicative offer, worth 72 billion, if ABN AMRO would abandon 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 breakup as requested by TCI.[12] The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid, which hinged on further access to the US markets, in order to expand on the success of the group's existing American brands, Citizens Bank and Charter One. On May 3, 2007, the Dutch Investors' Association (Vereniging van Effectenbezitters), with the support of shareholders representing up to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, asking for an injunction

against the LaSalle sale. The court ruled 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 a general shareholder meeting. However in July 2007, the Dutch Supreme Court ruled that Bank of America's acquisition of LaSalle Bank Corporation could proceed. Bank of America absorbed LaSalle effective October 1, 2007.

ABN AMRO in Sydney. On July 23 Barclays raised its offer for ABN AMRO to 67.5bn, after securing investments from the governments of China and Singapore, but it was still short of the RBS consortium's offer. Barclay's revised bid was worth 35.73 a share 4.3% more than its previous offer. The offer, which included 37% cash, remained below the 38.40-a-share offer made the week before by the RFS consortium. Their revised offer didn't include an offer for La Salle bank, since ABN AMRO could proceed with the sale of that subsidiary to Bank of America. RBS would now settle for ABN's investment-banking division and its Asian Network.

Acquisition and break up

On July 30 ABN AMRO withdrew its support for Barclays offer which was lower than the offer from the group led by RBS. While the Barclays offer matched ABN AMROs strategic vision, the board couldnt recommend it from a financial point of view. The US$98.3bn bid from RBS, Fortis and Banco Santander was 9.8% higher than Barclays offer. Barclays Bank withdrew its bid for ABN AMRO on 5 October, clearing the way for the RBS-led consortium's bid to go through, along with its planned dismemberment of ABN AMRO. Fortis would get ABN AMRO's Dutch and Belgian operations, Banco Santander would get Banco Real in Brazil, and Banca Antonveneta in Italy and RBS would get ABN AMRO's wholesale division and all other operations, including those in Asia. On October 9, the RFS consortium led by Royal Bank of Scotland, bidding for control of ABN AMRO, formally declared victory after shareholders, representing 86 percent of the Dutch banks shares, accepted the RFS groups 70bn offer. This level of acceptance cleared the way for the consortium to take formal control. The group declared its offer unconditional on October 10, when Fortis completed its 13bn rights issue. Thus the financing required for the groups 38-a-share offer, which included 35.60 in cash, was realised. Rijkman Groenink, Chairman of the Managing Board of ABN AMRO, who heavily backed the Barclays offer, decided that he would step down.[13]

Impact of the 2008 financial crisis

RBS

Further information: Royal Bank of Scotland Group#20082009 financial crisis

ABN AMRO in Dubai. On 22 April 2008 RBS announced the largest rights issue in British corporate history, which aimed to raise 12billion in new capital to offset a writedown of 5.9billion resulting from the bad investments and to shore up its reserves following the purchase of ABN AMRO. On 13 October 2008, British Prime Minister Gordon Brown announced a UK government bailout of the financial system. The Treasury would infuse 37 billion ($64 billion, 47 billion) of new capital into Royal Bank of Scotland Group Plc, Lloyds TSB and HBOS Plc, to avert financial sector collapse. This resulted in a total government ownership in RBS of 58%. As a consequence of this rescue the chief executive of the group Fred Goodwin offered his resignation, which was duly accepted. In January 2009 it was announced that RBS had made a loss of 28bn of which 20bn was due to ABN AMRO.[14] At the same time the government converted their preference shares to ordinary shares resulting in a 70% ownership of RBS.[15] Fortis

ABN AMRO headquarters in Amsterdam.

On July 11, 2008, the CEO of Fortis, Jean Votron, stepped down after the ABN AMRO deal had depleted Fortis' capital.[16][17][18] The total worth of Fortis, as reflected by its stock value, was at that time a third of what it had been before the acquisition, and just under the value it had paid merely for the Benelux activities of ABN AMRO.[19] Fortis announced in September 2008 that it intended to sell its stake in RFS Holdings, which includes all activities that have not been transferred yet to Fortis (i.e. everything except Asset Management).[20][21] Disposals and renaming In 2008, RFS Holdings completed the sale of a portfolio of private equity interests in 32 European companies managed by AAC Capital Partners to a consortium comprising Goldman Sachs, AlpInvest Partners and the Canada Pension Plan for $1.5 billion through a private equity secondary market transaction.[22][23] In September 2009, RBS rebranded the Morgans sharedealing business in Australia as RBS Morgans in September 2009.[24] This followed the rebranding of the ABN AMRO Australia unit to RBS Australia in March that year.[25] On 10 February 2010, RBS announced that branches of the businesses it owned in India[26] and the United Arab Emirates were to be rebranded under its name.[27] HSBC Holdings said it would buy the Indian retail and commercial banking businesses of Royal Bank of Scotland for $1.8b.[28][29] Dutch government ownership Continuing problems in the Fortis operations in the 2008 financial crisis led to the Dutch state obtaining full control (for 16.8bn) of all Fortis operations in the Netherlands, including those parts of ABN-AMRO then belonging to Fortis. The Dutch government and the De Nederlandsche Bank president have announced the merger of Dutch Fortis and ABN AMRO parts will proceed while the bank is in state ownership.[30] In January 2009, it was reported that shareholders in Belgium-based Fortis plan to file a lawsuit against the Belgian government over its handling of the carve-up of the troubled financial services group and are also considering a case against the Dutch government. The initial outcome of the lawsuit favours the Dutch state. On 9 February 2010, the businesses of ABN AMRO acquired by the Dutch state were legally demerged from the RBS acquired businesses. This created two separate banks within ABN AMRO Holdings, The Royal Bank of Scotland and the new entity named ABN AMRO Bank, each licensed separately by the Dutch Central Bank.[31] ABN Amro acquired the specialist on-line mortgage provider Direktbank Hypotheken as part of the nationalisation and from the 1 January 2011 it stopped selling these products under this brand to the public. It absorbed the mortgage business into its own products under the ABN AMRO brand as well as Florius brand.[32]

Goldman Sachs SEC lawsuit

Main article: Goldman Sachs#SEC civil fraud lawsuit, filed in April 2010

ABN Amro was mentioned by the United States Securities and Exchange Commission (SEC) SEC in court fillings when it sued Goldman Sachs and one of Goldman's collateralized debt obligation (CDO) traders on April 16, 2010. The SEC alleges that ABN Amro was on the wrong side of the CDO instruments Goldman was creating and that Goldman defrauded both IKB (a German bank) and ABNAmro in failing to disclose that the CDO's ABN Amro was purchasing were not assembled by a third party, but instead through the guidance of a hedge fund that was counterparty in the CDS transaction. This hedge fund, Paulson & Co., stood to reap great financial benefit in the event of default.[33]

Bank operations
ABN AMRO Bank has offices in 15 countries, but all but 5,000 of its 32,000 employees are in the Netherlands. Businesses include a private bank focusing on high-net-worth clients in 14 countries and a commercial and merchant banking operation, which is a player in specialist markets such as energy, commodities and transportation as well as brokerage, Clearing & Custody.[34]

Financial data
Years Sales net of interest EBITDA Staff Source: OpesC' Financial Data 2002 2003 2004 2005 2006 18.280mn 18.793mn 19.793mn 23.215mn 27.641mn 4.719mn 5.848mn 6.104mn 6.705mn 6.360mn 105,000 105,439 105,918 98,080 135,378

Net Result Share of the group 2.267mn 3.161mn 4.109mn 4.443mn 4.780mn

Alumni
Former employees of ABN AMRO:

Vladimer Gurgenidze - Prime Minister of Georgia (2007-2008) John Hewson - Member of the Australian House of Representatives (1987-1995) Joop Wijn - Dutch Minister of Economic Affairs (2006-2007) Graeme Le Saux - English football player

Marketing
Name usage and spelling
The bank refers to itself as ABN AMRO in all capitals, based on an acronym of the two originating banks names Algemene Bank Nederland and the Amsterdam and Rotterdam Bank, in the second case the first two letters of each town make up the AMRO. The letters in 'ABN' are pronounced separately and 'AMRO' is pronounced as a word. For this reason some media spell the name as 'ABN Amro'. In written text both versions are used, although the bank itself uses only the uppercase version. In verbal conversations the bank is sometimes referred to as simply ABN or AMRO bank depending on your location around the world.

Logo and style

The green and yellow shield logo was designed by the design house Landor Associates for ABN AMRO in 1991 and has been used as a brand for the bank and all its subsidiaries.

Sponsorships
ABN AMRO was the main sponsor of Ajax Amsterdam football club between from 1991 to 2008. The sponsor logo was (at the time) the only one in the world to be printed vertically down the right hand side of the front of the shirt.