Central bank wary over Amro takeover risk

Royal Bank of Scotland’s plans to snap up ABN Amro could be scuppered after the Dutch central bank today warned such a deal would be risky and complicated.

De Nederlandsche Bank (DNB) said in a statement that an offer from the RBS-led consortium would “constitute a strong risk-increasing and complicating factor” and that it would examine any formal approach with “meticulous care”.

The comments from DNB will be seen as a potentially serious blow to the RBS consortium’s hopes of putting in a bid for ABN Amro in competition with Barclays, given the Dutch central bank’s influence over Dutch regulatory approval.

Dutch regulators must consult with DNB when deciding whether to approve a takeover of one of the nation’s top banks, with the central bank given the power to decide if the acquiring company is operationally sound.

DNB has already caused controversy with previous comments on the ABN Amro bid saga.

Nout Wellink, president of the Dutch central bank, told the Financial Times earlier this month that regulators would “not object in principal” to a bid from a consortium even if it led to ABN Amro being restructured and broken up.

The statement was thought to pave the way for RBS to put in a rival offer to a proposed Barclays merger – an apparent u-turn on earlier comments he reportedly made in a Dutch newspaper saying that break-up calls by activist hedge fund The Children’s Investment Fund were “a bridge too far”.

The RBS consortium, also including Belgium-based Fortis and Spain’s Santander, is said to want to divide ABN between them.

But the group confirmed today it had met with DNB and was “confident it can address” issues raised by the Dutch central bank.

ABN Amro has extended the exclusivity deadline for its £89bn (€131bn) merger talks with Barclays until the end of the week.

It added late yesterday that it was to meet with the RBS consortium early next week, but after the deadline has passed.