ABN AMRO has been listed on the stock exchange

ABN AMRO has been listed on the stock exchange. The first tranche of depositary receipts for shares was listed on Euronext Amsterdam on 20 November 2015. The government will remain a shareholder of ABN AMRO for some time and will gradually reduce its shareholding in the coming years.

Below is a list of frequently asked questions about the background of the IPO.

Information on depositary receipts for shares in ABN AMRO

Questions about depositary receipts for shares in ABN AMRO

Click here for more information about the depositary receipts for shares in ABN AMRO.

The Status

When will the next portion (tranche) of depositary receipts for shares be sold?

We don’t know yet. We do know, however, that NLFI (the foundation that manages the shares of ABN AMRO on behalf of the Dutch State) is subject to a lock-up period of 180 days. This means that it has to wait at least 180 days before offering the next tranche of shares on the stock exchange. ABN AMRO may also not issue any new shares during this lock-up period.

Has an anti-takeover mechanism been put into place to protect ABN AMRO from a hostile takeover?

The shares that the Dutch State wants to sell are managed by the Stichting Administratiekantoor Continuïteit ABN AMRO Group (STAK). The STAK issues the depositary receipts for shares, which investors can buy. The STAK is set up such that ABN AMRO is protected against shareholder activism or a potential hostile takeover.

For more information, watch the video.

What is the ‘STAK’?

The shares that the Dutch State wants to sell are managed by the Stichting Administratiekantoor Continuïteit ABN AMRO Group (STAK). The STAK issues the depositary receipts for shares, which investors can buy. The STAK is set up such that ABN AMRO is protected against shareholder activism or a potential hostile takeover.

For more information, watch the video.

Will the listing on the stock exchange change anything for you?

Now that ABN AMRO has been listed on the stock exchange, will anything change for me?

The listing will not have an effect on our service: you will be able to conduct your banking business as usual, in whatever way it suits you. Our employees will as always be available to assist you. We put our clients’ interests first.

Now that ABN AMRO has been listed on the stock exchange, will the bank’s strategy change?

No. We will continue to execute the bank’s long-term strategy, which we announced in 2013. The key elements of the strategy are: Enhance client centricity, Maintain a moderate risk profile, Invest in our future, Improve profitability and Pursue selective international growth.

Now that ABN AMRO has been listed on the stock exchange, is my money safe?

ABN AMRO has been listed on the stock exchange. The first tranche of depositary receipts for shares was listed on Euronext Amsterdam on 20 November. The government will remain a shareholder of ABN AMRO for some time and will gradually reduce its shareholding in the coming years.

The IPO will not affect the safety of your money. ABN AMRO is a solid bank that the Dutch government deemed ready to be privatised through an IPO. DNB (the Dutch central bank) and the ECB (the European Central Bank) have issued Declarations of No Objection for the IPO.

ABN AMRO has a moderate risk profile; the IPO will not change this. In addition, we believe we are a well-capitalised bank. The results of the European Central Bank’s (ECB’s) Asset Quality Review and stress test confirmed this. The results show that ABN AMRO has taken sufficient loan impairments for possible non-performing loans and that we have a good capital position, allowing us to absorb potential losses and economic shocks. In short, we believe that ABN AMRO is a healthy bank.

In addition, the deposit guarantee scheme (DGS) applies to ABN AMRO’s clients. This scheme guarantees amounts up to a maximum of 100,000 euros per account holder with ABN AMRO (account holders may be either private individuals or small businesses).

Background of the IPO process

Did ABN AMRO have to be privatised? Couldn’t the State continue to hold all of the bank’s shares?

The Dutch State does not wish to be the permanent owner of a commercial bank. State ownership has always been a temporary emergency measure, and the Dutch State has always intended to eventually sell ABN AMRO. The Dutch Finance Minister is of the opinion that privatisation would have a positive effect on the competitive landscape. The first tranche of depositary receipts for shares was listed on the stock exchange on 20 November. The government will remain a shareholder for some time and will gradually reduce its shareholding in the coming years.

What conditions had to be met before ABN AMRO could be privatised?

The Finance Minister stated that the bank had to meet the conditions that he had previously set:
- The financial sector is sufficiently stable
- There is sufficient market interest
- The company is ready to be an independent bank again, now and in the future.

What steps were involved in preparing for the IPO?

First, the Dutch Finance Minister informed the Dutch Parliament about the cabinet’s decision to start the sale of ABN AMRO through an IPO. The Dutch Parliament then agreed to the Finance Minister’s proposal and the global coordinators (or the banks that will take the leading role in underwriting the IPO) were selected by NLFI.

On 27 October NLFI (the foundation that manages the shares of ABN AMRO on behalf of the Dutch State) and ABN AMRO announced the intention to float ABN AMRO. This means that NLFI officially stated its intention to list ABN AMRO on the stock exchange.

After the intention to float was announced, the prospectus was published. This document contains all the information that potential investors in ABN AMRO require to make a well-considered investment decision. For instance, the prospectus includes sections on ABN AMRO’s strengths and strategy as well as potential risks that investors should consider and that could affect our business operations and the execution of our long-term strategy.

In the weeks following publication of the prospectus, the members of the Managing Board and representatives from the global coordinators held presentations for large potential investors. At the same time, the book-building period also took place, during which institutional investors stated how many depositary receipts they planned to buy and what price they were willing to pay. After the book-building period, the advised introduction price was announced and the depositary receipts allocated. The first day of listing was 20 November. The first tranche of depositary receipts for shares has been listed on the stock exchange. The government will remain a shareholder for some time and will gradually reduce its shareholding in the coming years.

For more information, watch the video.

Who were the global coordinators and what did they do?

NLFI (the foundation that manages the shares of ABN AMRO on behalf of the Dutch State) selected ABN AMRO, Deutsche Bank and Morgan Stanley as the joint global coordinators for ABN AMRO’s intended IPO. The global coordinators arranged ABN AMRO’s initial public offering: they gave advice about the equity story based on the bank’s business plan, commented on the prospectus and, on behalf of NLFI, looked for investors to buy the depositary receipts for shares.

Why was ABN AMRO appointed as one of the global coordinators for ABN AMRO’s IPO?

NLFI was authorised to grant one of its shareholdings the right to appoint one investment bank (including itself) to coordinate the IPO. NLFI decided to grant this right to ABN AMRO Group. In line with market practice, ABN AMRO Group exercised this right by appointing ABN AMRO as a global coordinator. Corporate Banking’s Equity Capital Markets and FIG Advisory fulfilled this role.

Who were the bookrunners and the co-lead managers, and what did they do?

On 26 August 2015, NLFI (the foundation that manages the shares of ABN AMRO) selected eight investment banks for the roles of bookrunner and co-lead manager for ABN AMRO’s IPO. These were the banks that, on behalf of NLFI, looked for investors to buy depositary receipts for shares of ABN AMRO. The bookrunners and the global coordinators entered the bids from institutional and retail investors for the shares of ABN AMRO in a record called the ‘book’.

Bookrunners: BofA Merrill Lynch, Barclays, Citigroup, ING, JP Morgan and Rabobank.
Co-lead managers: Keefe, Bruyette & Woods, a Stifel Company and RBC Capital Markets.

To find out more about this appointment, visit www.nlfi.nl/publications.

What is an intention to float?

The intention to float is the press release in which a company officially announces that it intends to list its shares on the stock exchange. In this case, NLFI (on behalf of the Dutch State) and ABN AMRO made this announcement.

Who wrote the prospectus?

Employees from various departments of ABN AMRO wrote the prospectus, incorporating the comments of the underwriting banks. The Dutch Authority for the Financial Markets (AFM) approved the prospectus before it was published.

What was the prospectus used for?

The prospectus was used in the run-up to the listing to inform potential investors about ABN AMRO.

Parties involved in the IPO

Who currently owns ABN AMRO?

Before the listing, NLFI (NL Financial Investments) was the sole shareholder (on behalf of the Dutch State). After the listing, NLFI will remain a shareholder for some time and will gradually reduce its shareholding in the coming years. The STAK will hold the remaining shares and will give voting rights (except in a hostile situation) to holders of depositary receipts for shares by means of the depositary receipts. For more information, watch the video.

What is NLFI, and what does it do?

NLFI (NL Financial Investments) manages the shares of ABN AMRO and other companies on behalf of the Dutch State. NLFI advises the Dutch Finance Minister on the sale of these shares and on a possible IPO. This organisation was established to ensure a transparent separation of interests, an independent exit strategy (in this case the IPO) and a non-political, commercial governance of ABN AMRO.

What was the role of the Finance Minister in the IPO?

The Dutch Finance Minister ultimately decided whether or not and when ABN AMRO would be listed on the stock exchange and under which conditions. NLFI advised the Dutch Finance Minister on this matter.

What was the role of the Dutch central bank (DNB) in the IPO?

The Dutch Finance Minister stated that he would obtain the opinion of DNB and the European Central Bank (ECB) in this matter. ABN AMRO asked DNB for a Declaration of No Objection (DNO) for the public offering. DNB and the ECB issued Declarations of No Objection for the IPO.

What was the role of the Authority for the Financial Markets (AFM) in the IPO?

ABN AMRO requested the AFM to give its approval for the prospectus. The AFM checked whether the prospectus contained all mandatory required information. The AFM also checked whether the prospectus was internally consistent and comprehensible. Under Dutch law, the AFM did not have the means to verify whether the information in the prospectus was accurate.

Proceeds of the sale of depositary receipts for shares in ABN AMRO

What are the expected proceeds of the sale of the total share capital of ABN AMRO?

The proceeds from the sale of all depositary receipts for shares in ABN AMRO will depend on the size and price of the different offerings. We will only know the proceeds once the Dutch State has fully reduced its shareholding. The Dutch State will remain a shareholder for some time.

Who will receive the money that is raised in the IPO?

The money raised on the sale of existing shares will go to the selling shareholder NLFI (which manages the shares on behalf of the Dutch State) and, ultimately, the Dutch State.

Did the Managing Board receive a bonus or salary increase when ABN AMRO was listed on the stock exchange?

As long as the Dutch State is ABN AMRO’s shareholder, the Bonus Prohibition for State-supported Enterprises Act will apply to the members of the ABN AMRO Managing Board and no bonuses will be paid to them. Moreover, the Dutch Parliament has decided that ABN AMRO’s new articles of association must state that the bank adheres to a restrained remuneration policy.

History

Why did the State acquire ABN AMRO?

In October 2008, the Dutch State nationalised Fortis Bank Nederland (Holding) N.V. including the part of the former ABN AMRO group owned by Fortis in order to safeguard the stability of the financial sector in the Netherlands. Since nationalisation, the Dutch Minister of Finance has indicated the temporary nature of the investment.

Disclaimer

This document and the information contained herein are not for distribution in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the “United States”), Canada, Australia or Japan.  This document does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities (the “Shares”) of ABN AMRO Group N.V. (the “Company”) in the United States.  The Shares of the Company have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to “qualified institutional buyers” as defined in Rule 144A under the Securities Act. 

In any EEA Member State that has implemented Directive 2003/71/EC, as amended (together with any applicable implementing measures in any member State, the “Prospectus Directive”), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

This document does not constitute a prospectus within the meaning of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht) and does not constitute an offer to acquire securities. Any offer to acquire Shares will be made, and any investor should make his investment, solely on the basis of information that will be contained in the prospectus to be made generally available in the Netherlands in connection with such offering. When made generally available, copies of the prospectus may be obtained at no cost from the Company or through the website of the Company.
In the United Kingdom, this communication is only being distributed to, and is only directed at, and any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, “qualified investors” (as defined in section 86(7) of the Financial Services and Markets Act 2000) (i) who are persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, or other persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as “relevant persons”).  Persons who are not relevant persons should not take any action on the basis of this communication and should not act or rely on it.