The Netherlands plans to cut its stake in ABN Amro Bank NV in half, taking the bank closer to full private ownership.
The state’s investment vehicle NLFI is looking to reduce its holding to 10.5% through a trading plan, from the current 20.7%, it said in a statement on Wednesday. ABN Amro had a market value of about €34.5 billion ($38.7 billion) at Tuesday’s close.
“We welcome” the decision, which was “not an unexpected” one, ABN Amro Chief Executive Officer Marguerite Berard said on Bloomberg TV. It’s “additional proof of the confidence the Dutch government has.”
The state has been ABN Amro’s largest holder since it bailed out the lender at the height of the 2008 financial crisis. It has been selling down its holding for years, partly helped by rising valuations. In late July, it said it sold shares worth about €2.5 billion.
ABN Amro fell 1% at 10:30 a.m. in Amsterdam. The shares have risen more than 40% this year, making the bank a top performer across Europe’s finance industry.
Berard, a former BNP Paribas SA executive who took over last year, has been working to restructure the firm by cutting thousands of jobs and selling less profitable businesses. She has also sought to expand the bank’s retail business in the Netherlands with the €960-million deal to buy NIBC Bank.
Asked if the development meant there was further room for acquisitions, Berard said the bank would “keep building scale in the Dutch retail market.”
ABN Amro has also been expanding its private banking businesses, including through the takeover of German private bank Hauck Aufhäuser Lampe. Berard has set a goal for a return on equity of at least 12% in 2028 while targeting a cost-income ratio below 55% under a strategy unveiled in November.
“Lower state ownership raises M&A optionality, though the integration of the NIBC and HAL acquisitions should keep ABN Amro’s deal appetite disciplined,” Bloomberg Intelligence analyst Maria Antonia Casado Guia wrote in a note.
The gradual sell-down of the government’s stake comes as consolidation in European banking heats up, and has fueled speculation that other banks may try to acquire ABN Amro. BNP Paribas, Deutsche Bank AG and Belgian lender KBC Group NV have looked at the Dutch lender in recent years, people familiar with the matter have said.
Finance Minister Eelco Heinen wrote in a letter to parliament that “the divestiture plan is in line with the government’s current policy to further reduce the state’s stake.” The government and ABN Amro agreed that NLFI’s information rights will remain in place for as long as the investment vehicle holds at least 10% in the bank.