Seven years after nationalization, Dutch bank ABN Amro was back on the stock market, with shares rising in what was billed as one of the biggest debuts by a European lender since the 2008 financial crisis.
After ringing the gong to mark the symbolic start of trading at the Amsterdam stock exchange, the chairman of ABN Amro's board, Gerrit Zalm, said being back at the stock market was "great" and that the bank was "solid, and offered an attractive yield."
Banking officials clapped and cheered as the share price climbed steadily within the first two hours to 18.18 percent and settling at around 18.36 euros, up more than 3 percent.
In a statement released prior to the IPO, the bank said the share price had initially been set at 17.75 euros, meaning it would raise some 3.3 billion euros ($3.5 billion), with the bank's current stock now worth a total of 16.7 billion euros.
The market return of the Netherland's third largest bank was closely watched by Dutch Finance Minister Jeroen Dijsselbloem, as it marks a new era for the bank after seven years of state ownership. In the wake of the 2008 financial crisis, the government had to bail out the troubled lender and is now hoping to recoup some to the 22 billion euros it spent on rescuing ABN Amro.
"Naturally we want to see a small upwards movement, so there is no disappointment. As you know we have another 80 percent of the shares to sell," Dijsselbloem said.
ABN Amro has confirmed that a further 3.0 percent of the shares are available that "can be exercised to cover over-allotments or short positions" if there is high demand. In an effort to avoid all the shares being snapped up by major investment funds and other institutional investors, ABN Amro held back 10 percent for individual buyers in the Netherlands.
Return to health
ABN Amro traces its roots back to the 19th century. It was listed on the Amsterdam stock exchange for years, before being bought in 2007 by a consortium consisting of Spanish lender Santander, the Royal Bank of Scotland, and the Belgian-Dutch outfit Fortis.
But ABN's balance sheet turned out to be littered with financial bombs that exploded when the global financial crisis broke out very shortly after the buyout, and the 71 billion-euro deal, one of the largest in banking history, proved calamitous for the three buyers.
Royal Bank of Scotland is now 73 percent owned by the British government after a rescue totaling 45.5 billion pounds ($71 billion, 53 billion euro) in 2008. Fortis was also dismantled during 2008 to avoid bankruptcy. Its Dutch activities, including its share in ABN Amro, were bailed out by the Dutch government, which then merged it back into ABN Amro Bank.
Today ABN Amro is a commercial bank focused especially on the highly competitive mortgage market. Last week it trumpeted good results, with net profits of some 509 million euros for the third quarter - a 33 percent year-on-year increase.
However, contrary to government claims that the bailout had cost Dutch taxpayers about 22 billion euros, the country's main audit body estimated the true price tag at about 32 billion euros.
uhe/nz (Reuters, dpa, AFP)