The headquarters of ABN Amro Group in Amsterdam. The second-largest bank in the Netherlands is a remnant of the company that fell prey to a takeover in 2007 by a group including Royal Bank of Scotland, Banco Santander and Fortis.

Bloomberg
London

ABN Amro Group, a lender bailed out by the Dutch government during the financial crisis, rose as much as 3.4% on its return to the market after raising €3.3bn ($3.6bn).
The bank sold 188mn shares at €17.75 apiece in the initial public offering, equivalent to a 20% stake and valuing ABN Amro at €16.7bn, according to a statement on Friday. The stock was trading up 3.5% at €18.37 in Amsterdam compared with a 1% decline in the Euro STOXX Banks Index. ABN Amro started trading at about 1.1 times book value compared with an average book value of 1.15 for the 46 member firms tracked by the index.
ABN Amro, the second-largest bank in the Netherlands, is a remnant of the company that fell prey to a takeover in 2007 by a group including Royal Bank of Scotland Group, Banco Santander and Fortis.
The Dutch state, which spent almost €22bn to rescue the bank the following year, is recouping part of its investment in the first of a series of stake sales. Under government ownership, ABN Amro transformed itself from one of the world’s largest banks to a consumer lender focused on the Netherlands.
“The Dutch financials are punching above their weight again,” said Patrick Lemmens, who helps oversee about 10bn euros in financial-services stocks at Orix Corp’s Robeco Groep in Rotterdam. “It’s a prime example of a solid, dividend- paying bank with a clear model and good profit going back to market.”
The government may retain some control over the shares even after it cuts the holding further through a foundation, or stichting, that can seize the voting rights of investors for as long as two years to block a takeover or other situation deemed hostile. The shares had been on sale for as much as €20 apiece.
ABN Amro’s €72bn takeover, the financial services industry’s largest ever, proved disastrous when the crisis struck in 2008.
The UK government bailed out RBS, while the Netherlands had to buy the Dutch banking and insurance units of Fortis for €21.7bn.
The government enlisted Gerrit Zalm, a former finance minister, as chief executive officer to rebuild ABN Amro into a smaller lender focused on its home market. “The new ABN Amro proves things have changed in the financial sector,” said Michael Enthoven, director of NL Financial Investments, which owns nationalized financial companies on behalf of the Dutch government. “You don’t know how hard you have to work for a bank to become boring.”
Finance Minister Jeroen Dijsselbloem delayed a decision on the IPO in March, when a 100,000-euro salary increase for six ABN Amro board members caused an uproar among lawmakers and prompted the resignation of a supervisory board member. The group subsequently gave up the increase.
Dijsselbloem said in May that the government would go ahead with the IPO as soon as this year and that it might sell as much as 30% of its stake. The Dutch state plans eventually to completely exit the company.
ABN Amro’s return on equity, a measure of profitability, was unchanged in the third quarter from a year ago at 12.7%. The firm said in September that it plans to pay out 50% of profit in dividends in 2017, up from 40% this year.
“If you look at all the regulation surrounding banks like ABN Amro, it’s going to get increasingly more difficult for them to generate attractive returns on equity,” Lodewijk van der Kroft, a partner at Comgest, which has $24.1bn in assets under management, said by phone. “Not a day goes by that you’re not confronted with a bank that has to pay a fine.”
ABN Amro has not been immune. An internal inquiry in Dubai this year showed staff failed to comply with company guidelines, prompting some people to leave the lender. The Dutch central bank and the Dubai Financial Services Authority fined the firm for the alleged violations.
About 10% of the offer was allocated to retail investors. They received preferential treatment when subscribing to the offering, according to a Friday statement from NLFI, which owns nationalised financial companies on behalf of the Dutch government.
Banks managing the offer had recommended a sale price of €17.50 after order-taking was completed Thursday and a price of as much as €18 was discussed with the government, people with knowledge of the discussions told Bloomberg.
The shares trade as depositary receipts with one DR equal to one share.
Morgan Stanley, Deutsche Bank and ABN Amro are managing the IPO, along with Bank of America Corp, Barclays, Citigroup, JPMorgan Chase & Co, ING Groep and Rabobank. Rothschild acted as financial adviser to the government and Lazard was adviser to the company.