ABN Amro stake sale stirs ghost of UniCredit-Commerzbank

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The Dutch government plans to sell roughly a quarter of its stake in ABN Amro, according to a statement Tuesday from NLFI, the nation’s investment vehicle. The government now owns 40.5% of the bank but is looking to reduce that share to roughly 30%, NLFI said.

The sale will come as part of a “pre-arranged trading plan” to be executed “in the coming days,” NLFI said.

Barclays “will have full discretion, subject to certain pre-set parameters,” to conduct a “measured and orderly sell down,” the investment vehicle said.

European governments this year have sold off roughly €13 billion in shares of banks they bailed out during the 2007-08 financial crisis, according to Bloomberg. That’s a faster clip than any year since the crisis.

But the last major share sale – when the German government sold a 4.5% stake in Commerzbank in September – ignited a debate about cross-border bank acquisitions on the continent.

Italy’s UniCredit outbid the field to double its stake in Commerzbank to 9%, then used derivatives contracts to push its claim to 21% of the bank, fueling questions as to whether it planned to acquire Commerzbank in full.

UniCredit CEO Andrea Orcel suggested acquiring Commerzbank was one option but, in public dismissed the buy-up as “an investment.” Commerzbank quickly named a new CEO, launched a slate of ambitious growth targets, and executives of the two banks met for discussions, but no major announcements followed.

The roughly 10.5% chunk of ABN Amro the Dutch government is selling is worth roughly €1.4 billion, Bloomberg reported

European governments are selling at a relatively high time. Robust interest rates over the past two years have driven banks to record profits – and higher valuations.

But it is “not realistic” to wait to sell until ABN Amro’s share price is high enough that the Dutch government breaks even, Sigrid Kaag, the nation’s former finance minister, said in a letter to parliament last year, according to Bloomberg.

With that said, the Netherlands has raised more than €10.9 billion from sales of ABN Amro stock dating back to 2015, according to NLFI filings – and the government has received nearly €6.3 billion in dividends on its investment.

The Dutch government’s stake in ABN Amro now accounts for about €5.3 billion of the bank’s €13.2 billion market value.