The Dutch government announced its plans to reduce its stake in lender ABN Amro by a quarter to 30% through a trading plan. Shares of ABN Amro traded lower in response to this news. The government currently holds a 40.5% interest in the bank and has been gradually selling off its shares since last year. In September, the government sold shares worth about 1.17 billion euros to bring its shareholding under 50%. The proceeds were used to pay off some of the state’s debts. ABN Amro was bailed out by the state during the 2008 financial crisis and was privatized in 2015.
Finance Minister Eelco Heinen reiterated that the government’s intention was not to profit from its ownership of ABN Amro but to ensure the stability of the financial system. He mentioned that in order to recoup the government’s total expenditure, the remaining stake would have to be sold at a price of 31.49 euros per share, which he deemed unrealistic in the short term. ABN Amro’s share price as of the Monday close was 15.83 euros. The government is using a pre-arranged trading plan executed by Barclays Bank Ireland to sell its shares in the bank. This move comes as other European governments have also been selling off their shareholdings in banks taken over during the financial crisis.
The banking sector has been in the spotlight recently, particularly after UniCredit’s move to take a stake in German lender Commerzbank raised questions about cross-border mergers in Europe and the lack of a complete banking union in the region. Governments in the U.K. and Germany have both made moves this year to reduce their respective shareholdings in NatWest and Commerzbank. ABN Amro itself was the subject of acquisition speculation last year, with reports suggesting that French bank BNP Paribas was interested in acquiring the Dutch lender. However, BNP Paribas denied these reports at the time.
The Dutch government’s decision to reduce its stake in ABN Amro reflects a broader trend of governments capitalizing on a rebound in shares to sell their shareholdings in banks that were bailed out during the financial crisis. These moves are aimed at reducing the government’s exposure to the banking sector and recouping some of the funds invested in the bailout. The gradual reduction in the government’s stake in ABN Amro is part of a long-term strategy to privatize the bank and allow it to operate independently in the market. The government’s intention is not to profit from its ownership but to ensure the stability of the financial system.
