Update on EC Remedy

Press release -

Heads of Agreement with Deutsche Bank As announced on 20 October 2009, the Dutch State and Deutsche Bank have entered into a "Heads of Agreement" outlining the principal terms and conditions for the sale to Deutsche Bank AG of the new HBU II N.V. consisting of part of the Dutch commercial clients' activities and selected regional branch offices and IFN Nederland B.V. to comply with the European Commission's requirements for competition and to thus enable the integration of the new ABN AMRO Bank and Fortis Bank Nederland.

ABN AMRO have now prepared a preliminary analysis of the impact of the transaction on the results and the regulatory capital of the Group, on the basis of which the Ministry of Finance is informing the Parliament on the implications of the transaction. ABN AMRO assesses that the loss on the transaction will be in the range of EUR 800 to EUR 900 million. The total loss on the transaction includes the impact of a provision to be taken for a credit guarantee to the buyer guaranteeing 75% of the credit losses on the transferred loan portfolio of HBU II under the "Heads of Agreement".

ABN AMRO expects that in the 4th quarter of 2009, after the Group's Managing Board and the Supervisory Board approval of the transaction and the execution of the transaction becoming highly probable, the majority of the losses on the transaction will have to be recorded. The remainder will be recorded up to the closing of the transaction, expected soon after separation of the new ABN AMRO Bank N.V. from the existing ABN AMRO Group. 

ABN AMRO Group estimates the cumulative net impact on its tier 1 capital on recognition of the loss on transaction to be in the range of 50-55 basis points on ABN AMRO Group ratios. This reflects the loss on sale and the initial capital requirement for the credit guarantee provided to the purchaser. The capital requirement for the credit guarantee will after closing of the transaction decrease over its life, with only a minor part remaining after the first five years.

ABN AMRO Group is in discussion with the Dutch State on the capitalization of the Dutch State acquired businesses up to separation and these discussions include the impact of this transaction. The resulting capital actions will ensure that by legal demerger and by legal separation, the capital requirements of the Dutch State acquired businesses are adequately addressed.

Further information on ABN AMRO Group is available on www.abnamro.com

For further information, please contact:

ABN AMRO Group Press Office
+31 20 6288900

RBS Group Investor Relations
+44 207 672 1758

RBS Group Media Relations
+44 131 523 4414



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