ABN Amro may soon get the green light for its IPO

THE Dutch government is poised to proceed with an initial public offering (IPO) of ABN Amro Group that may value the bank at as much as

20 billion (R264.5bn), according to people with knowledge of the sale, helping to recoup part of the lender’s state bailout.

Dutch Finance Minister Jeroen Dijsselbloem may present the plan today, sticking with the objective of selling stock this year in what may be the country’s biggest IPO ever.

The transaction could value ABN Amro at between

15bn and 20bn, said the people, who asked not to be identified because the discussions are private.

A public outcry over pay rises for some board members and regulatory probes into alleged internal policy breaches at the bank in recent weeks threatened to delay the IPO as lawmakers questioned whether the company was fit for sale.

Chief executive Gerrit Zalm has sought to quell that concern by apologising publicly over the botched increase in compensation, which came as the bank boosted profit to the highest in four years.

Zalm’s apologies “are a strong signal”, Dijsselbloem said on Tuesday. “The cabinet has the ambition to make a start with the IPO this year.”

A spokeswoman for the finance ministry said she could not comment on the ministers’ meeting agenda.

“We have to wait until the shareholder considers the time right for an IPO,” said Jeroen van Maarschalkerweerd, spokesman for ABN Amro.

“Our preparations are on schedule,” he said.

Higher valuation

With the IPO, Dijsselbloem is seeking to recover the Netherlands’ 22bn investment in the lender. A record 71.9bn takeover of ABN Amro by three banks on the cusp of the financial crisis ended in the company’s breakup and forced the Dutch government to nationalise parts of the institution and bail out firms, including ING Groep, amid a credit crunch.

Time is running out for an IPO this year. Dijsselbloem had planned to inform parliament on the sale in the first quarter. Last month, he told lawmakers in The Hague that if the government had decided to initiate the IPO in that period, the listing would have probably taken place in October or November.

At 20bn, the bank would probably trade at about 1.25 times its tangible book value, according to three stock analysts. At that price the valuation would be higher than rivals such as ING, Deutsche Bank and BNP Paribas. – Bloomberg