EU backs Dutch aid to AFN AMRO, Fortis

The EU competition watchdog yesterday temporarily approved a Dutch recapitalisation package for ABN AMRO and Fortis Bank Nederland (FBN), while extending its in-depth probe into state aid for the nationalised banks.
The 6.9-billion-euro recapitalisation “is necessary to finance the separation of ABN Amro from its mother company and the integration costs resulting from the merger between FBN and ABN Amro,” the European Commission said in a statement.
“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,” EU Competition Commissioner Neelie Kroes said.
She also warned that the commission “will in the meantime make sure that competition is preserved.”
The EU executive arm has thus extended the scope of its investigation, opened in April os last year into an aid package related to the purchase of Fortis Bank Nederland by the Dutch state, to include these additional measures.
“This will allow the commission to assess in detail the combined effect of all the support measures in favour of Fortis Bank Nederland and ABN Amro and give interested parties an opportunity to comment on the additional measures,” the commission said in its statement.
The government nationalised the Dutch part of Fortis at a cost of 16.8 billion euros in October 2008 after the giant and emblematic Dutch-Belgian bank and insurance group was broken up as a result of the global economic crisis.
ABN Amro last June benefitted from a Dutch state injection of 2.5 billion euros.
Late last year, the Netherlands announced supplementary measures, including another cash injection of 3 billion euros in ABN Amro and the Dutch arm of Fortis Bank and the convertion of 1.4 billion euros in long-term bonds to equity for ABN AMRO.
The extended probe is required “to ensure that the aid is not used to distort competition and to weaken competitors by adopting an aggressive pricing or acquisition policy,” the commission insisted.