Situation confirmed for clients with interest rate derivatives

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Last week over 300 clients were told about the outcome of the reassessment of their interest rate derivatives. Almost all clients who are entitled to compensation now have confirmation of their situation.

Gerben Dragt, who is in charge of the reassessments at ABN AMRO, explains, “This is a positive and important event for the clients who are affected, and for everyone else involved. We’ve worked hard to give clients the information they need and to compensate them. Now we’ll start processing the offers that have been accepted and paying out compensation to those clients. At the same time, our external file reviewer is looking at our offers.”

The acceptance level remains high, at around 95%. In total, approximately 5,300 clients have now agreed to the proposed compensation. These figures are updated every month on the reassessment website.

Recovery framework for compensating clients

At the request of the Dutch Minister of Finance, in the summer of 2016 an independent committee of experts developed a uniform recovery framework describing how to compensate clients with interest rate derivatives. A great deal of time and attention was put into ensuring consistency in its interpretation and implementation. The banks, including ABN AMRO, were then able to set up their processes and related controls to carry out the reassessments and give clients confirmation of their situation. PwC also played an important part as ABN AMRO’s external file reviewer.

Gerben Dragt continues, “We would have preferred to give clients the necessary information sooner, but thoroughness was more important than speed. To accommodate our clients financially, we advanced them part of their compensation in 2017.”

Fact and figures

The various facts and figures can be found on the reassessment website. “We’re in touch with all our clients that haven’t been sent the results yet, to discuss the reassessment of their interest rate derivatives. We’re also missing the current addresses of a number of clients and former clients: we contacted them by registered post but the letters couldn’t be delivered. Of course we’re doing everything we can to find out their addresses.”

In total, ABN AMRO’s reassessment process includes some 7,500 clients, of whom around 6,900 are eligible for an offer. If everyone accepts their offer, the total compensation that will be paid out will be approximately EUR 500 million. The bank has had more than 450 of its own people and external contractors working full-time on the reassessment over the past years.

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