Leadership

EU approves ABN Amro/Fortis aid, but extends probe

08.02.2010
The European Commission has temporarily approved a recapitalisation package of €6.9bn in favour of ABN Amro and Fortis Bank Nederland (FBN), while also extending its investigation into the aid provided to the two banks by the Dutch State.

The Commission acknowledged that the additional aid is needed to finance the separation of ABN Amro from its mother company and to meet the costs resulting from the merger between Fortis Bank Nederland and ABN Amro.

Its temporary approval falls under EU state aid rules on “urgent rescue aid”, the Commission said, as given their low level of capital post separation FBN and ABN are unable to finance the merger by their own means.

Extends in-depth investigation
At the same time, the Commission extended the scope of its in-depth investigation, opened in April 2009, into an aid package related to the purchase of Fortis Bank Nederland by the Dutch State to include these additional measures.

It said it needed to ensure that the aid was not used to “distort competition and to weaken competitors by adopting an aggressive pricing or acquisition policy”.

“This recapitalisation package is a further step towards the restructuring of Fortis Bank Nederland and ABN Amro. I sincerely hope that ABN Amro and Fortis will rapidly finalise their integration plans and resume their role as lender to the real economy in the Netherlands. The Commission will in the meantime make sure that competition is preserved,” said EU Competition Commissioner Neelie Kroes.

The Dutch State nationalised the Dutch arm of Fortis in October 2008 at a cost of €16.8bn. The Dutch Government also pumped €2.5bn into ABN Amro last summer.

The Dutch State also announced further aid measures for the two institutions late last year, including another capital investment of €3bn for ABN Amro and the Dutch arm of Fortis Bank.