Background
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). Also in 1964, the Amsterdamsche Bank, established in 1871, merged with the Rotterdamsche Bank, established in 1873 (as part of a merger that included Determeijer Weslingh & Zn. from 1765), to form Amsterdamsche en Rotterdamsche Bank, known as AMRO Bank.
ABN and AMRO merger
On 22 September 1991, ABN and AMRO merged to form ABN AMRO. In 1993, two of its investment banking subsidiaries ― Bank Mees & Hope and Pierson, Heldring & Pierson ― merged in turn to form MeesPierson.
The two merged banks brought to ABN AMRO a large network of overseas companies and branches. From NHM, ABN owned a significant branch network in Asia and the Middle East, including the Saudi Hollandi Bank owned by the NHM Jeddah branch. Another, the Hollandsche Bank-Unie (HBU), which grew 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 had expanded into North America with the acquisition of Chicago-based LaSalle National Bank.
After the 1991 merger, ABN AMRO continued to grow through a number of further acquisitions, including the 1996-purchase of suburban Detroit based Standard Federal Bank followed five-years later by the acquisition of its Detroit-based competitor Michigan National Bank which was rebranded as Standard Federal. In 2005, Standard Federal became LaSalle Bank Midwest to unite ABN AMRO's two banking networks in the U.S. In 1995, ABN AMRO purchased The Chicago Corporation, an American securities and commodities trading and clearing corporation.[10]
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 in 2000.[11] ABN AMRO sold the Bouwfonds as a going concern in 2006.
In July 2006, Favonius Ventures, which was founded and headed by Roel Pieper, received all of the technology investments of ABN AMRO Capital which is the private equity business unit of ABN AMRO Bank N.V.[12]
Mid-2000s weakness, acquisition and breakup
ABN AMRO had come to a crossroads in early 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 five 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%. Non-performing loans increased considerably year on year by 192%. Net profits were only boosted by sustained asset sales. In 2006, research findings were publicly released regarding ABN AMRO Bank N.V.'s predecessors and connections to African slavery. An examination of 200 predecessors of ABN AMRO Bank N.V. founded before 1888 determined that some had connections to African slavery, either in the United States or elsewhere in the Americas.[13]
By 2007, ABN AMRO was the second-largest bank in the Netherlands and the eighth-largest in Europe by assets. At that time, the magazine The Banker and Fortune Global 500 placed it 15th[14] in the list of world's biggest banks and it had operations in 63 countries, with over 110,000 employees.
2008 financial crisis
Both RBS and Fortis were increasingly visibly overextended following the ABN AMRO acquisition. 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 11 July 2008, Fortis CEO Jean Votron stepped down after the ABN AMRO deal had depleted Fortis's capital.[20][21] The total worth of Fortis, as reflected by its stock value, was at that time one-third of what it had been before the acquisition, and just under the value it had paid for the Benelux activities of ABN AMRO.[22]
On 3 October 2008, Fortis was nationalised. The Dutch government bought a number of Fortis divisions plus Fortis's share in ABN AMRO for EUR 16.8 billion. It subsequently announced that the parts of ABN AMRO it had acquired would be integrated with Fortis Bank Nederland (FBN) to create a new 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.
Disposals outside of the Netherlands
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.[25][26]
In September 2009, RBS rebranded the Morgans sharedealing business in Australia as RBS Morgans. This followed the rebranding of the ABN AMRO Australia unit to RBS Australia in March that year.[27]
On 10 February 2010, RBS announced that branches it owned in India[28]
Dutch operations restructuring
The Dutch government had obtained full control of all Fortis operations in the Netherlands, including those parts of ABN-AMRO then belonging to Fortis, at a price of €16.8bn.[32] The 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. This was completed in July 2010, when Fortis operations in the Netherlands were rebranded ABN AMRO.[33]
In November 2008, a Belgian court dismissed a suit by shareholders of Fortis objecting to the Belgian government's handling of the Fortis/ABN AMRO transaction and subsequent break-up.[34]
The Dutch government appointed former Dutch finance minister Gerrit Zalm as CEO to restructure and stabilise the bank, and in February 2010 the assets it owned were legally demerged from those owned by RBS.[35] This demerger created two separate organisations, ABN AMRO Bank N.V. and The Royal Bank of Scotland N.V.
Post-restructuring history
ABN AMRO acquired the specialist on-line mortgage provider Direktbank Hypotheken as part of the nationalisation and from 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.[39]
In November 2020, ABN AMRO announced it would cut 2800 jobs and sell its head offices as a plan to reduce costs, hoping to save €700 million by 2024.[40]
In December 2023, ABN AMRO acquired BUX to boost its digital presence for an undisclosed amount.[41]
In May 2024, ABN AMRO agreed to buy Hauck Aufhäuser Lampe (HAL), a German private bank specialised in wealth management, for 672 million euros ($730 million) from Chinese conglomerate Fosun International.[42]
