The Dutch state said on Thursday it would inject an extra 3.0 billion euros (4.5 billion dollars) in cash into the merger of nationalised banks ABN Amro and Fortis.
“The state will pay three billion euros in cash,” Finance Minister Wouter Bos announced in a letter to the lower house of parliament.
The two banks were rescued by the state at the height of the financial crisis in October 2008.
“The integration (of the two banks) into a single bank, and the capital requirements of the supervisory body, mean that an extra injection of capital, which I expect to be the last, is needed,” the minister said.
The capitalisation, he added, “must be seen as an investment to get the new bank started”.
“Unless unforeseen circumstances arise, this will be the last capital injection that the government provides.”
Bos also announced that state loans worth 1.4 billion euros to ABN Amro would be converted into capital.
The government nationalised the Dutch part of Fortis at a cost of 16.8 billion euro last October after the giant and emblematic Dutch-Belgian bank and insurance group was broken up as a result of the crisis.
In December, the Dutch state paid 6.5 billion euros for Fortis Netherlands’
holding of 33.8 percent in RFS Holdings, the grouping that had taken over Dutch bank ABN Amro.
The fusion of the two banks as envisaged by the government has yet to receive approval from parliament. It would allow for annual savings of about
1.1 billion euros, said Bos.
The new group would continue operating under the name ABN Amro.
The minister said the ABN Amro subsidiaries HBU and IFN Finance will be sold for about 700 million euros, less than he thinks they are worth. The European Union insists on the sale as a condition for the ABN Amro-Fortis merger.
Germany’s biggest bank, Deutsche Bank, offered in October to buy the subsidiaries, but the deal has to be approved by the Dutch parliament before December 31.
ABN Amro said in a statement the sale would result in an overall loss of 800 to 900 million euros, which includes a provision for credit guarantees.
In May, ABN Amro announced that it would cut 4,000-5,000 jobs from a total workforce of 30,000 by 2012 as part of a merger with Fortis Netherlands.
