Dutch state close to breaking even on ABN Amro bailout

The Dutch state is close to recouping the full cost of the 2008 nationalisation of ABN Amro, after a share price rally took the bank’s stock above €40 this week, according to calculations by the Financieele Dagblad.

The finance ministry had long assumed the rescue would be a loss-making operation. In late 2023 it told MPs it was “not realistic” that the state would break even in the short term, projecting a shortfall of almost €7 billion.

Since then the shares have tripled in value, from €13.20 at the time to just over €40 on Thursday. The state, which still owns 20.5% of the bank has now recouped €14.2 billion through staged sell-offs, and its remaining stake is worth some €6.7 billion, the FD said.

That brings the total close to the €21.7 billion the ministry says has been pumped into the bank since 2008.

Slow sell-off
The state bought ABN Amro, Fortis Bank Nederland and the insurer now known as ASR in October 2008 for €16.8 billion to stop parent company Fortis collapsing in the credit crisis, and injected roughly €8 billion more into the banks in the years that followed.

ABN Amro returned to the stock market in 2015, but the share price languished for years and the sell-off repeatedly stalled. Former D66 finance minister Sigrid Kaag restarted the sales in 2023, and every tranche since has fetched a higher price.

Interest paid on the money borrowed for the rescue has been roughly cancelled out by dividend income over the years, the FD said.

Cost cutting
Morningstar analyst Johann Scholtz told the FD the share price rise is partly due to the state selling its stakes and the bank therefore having more freedom to cut costs, along with investors speculating about takeovers in the European banking sector.

The windfall will not plug the cabinet’s budget gaps, however, as one-off share sales cannot be counted towards the deficit under EU rules.