On Tuesday 5 April 2011 the European Commission announced the outcome of its state aid investigation procedure on ABN AMRO. ABN AMRO is pleased that the investigation has been concluded.
The European Commission states in its press release that it has approved under EU state aid rules the support package and restructuring plan for ABN AMRO Group, subject to certain conditions. These include a ban on acquisitions, and measures to stimulate competition in private banking in the Netherlands. Acquisitions are still possible if these are below a certain (cumulative) limit or are part of certain activities, such as private equity.
In addition, other conditions not mentioned in the press release of the European Commission are a continuation of the price leadership restrictions similar to the ones implemented in 2010; a ban on advertising State ownership; an interest payment to the Dutch State of EUR 18 million based on a recalculation; the monitoring of net interest income levels; and certain restrictions on coupon payments and calling of capital instruments.
The latter dictate that ABN AMRO shall not pay investors any coupon on existing core Tier 1, Tier 1 and Tier 2 capital instruments (including preference shares) or exercise any call option rights in relation to the same instruments until 10 March 2013 inclusive, unless there is a legal obligation to do so. The EC decision also allows ABN AMRO to make a dividend payment on its ordinary shares if the dividend payment exceeds EUR 100 million. This will oblige ABN AMRO to pay coupons on securities containing a dividend pusher. ABN AMRO announced on 4 March 2011 that, in consultation with the Dutch State, it had established a dividend policy that targets a dividend payout of 40% of the reported annual profit.
Most measures are implemented for the duration of three years starting 5 April 2011. The restrictions imposed on acquisitions will be prolonged to a maximum of five years if after three years the Dutch State continues to hold more than 50% of the ordinary shares.
For more information please contact:
ABN AMRO Group Press Office
+31 20 6288900
ABN AMRO Group Investor Relations
+31 20 6282282