ABN Amro's Dutch state owner selling 7% as part of exit plan

AMSTERDAM (BLOOMBERG) - The Dutch state plans to sell a 7 per cent stake in ABN Amro Group, taking advantage of a rising stock price a year after returning the bank to the market in an initial public offering.

The state intends to sell about 65 million shares in the Amsterdam-based bank in an accelerated sale, pushing its stake down to 70 per cent from 77 per cent, NLFI, the government entity that manages nationalized financial assets, said in a statement Wednesday. The stake was worth about 1.36 billion euros (S$2.06 billion) at the Wednesday closing price, according to Bloomberg calculations.

ABN Amro has gained about 18 per cent since the Dutch state sold 23 per cent of the bank in the IPO about a year ago, outperforming European rivals that struggled to raise capital buffers and profitability. Dutch Prime Minister Mark Rutte's government, which faces an election in about four months, has said it plans to sell the rest of ABN Amro over time.

"We have followed the market closely, and decided this was the right moment to sell another stake," said Huub Hieltjes, a spokesman for NLFI.

The shares slipped 2.8 per cent to 20.31 euros at 9:14 a.m. in Amsterdam. They have declined about 1.7 per cent this year, while the 38-member Bloomberg Europe Banks and Financial Service Index dropped 14 per cent.

ABN Amro on Wednesday reported a 19 per cent jump in third-quarter profit, beating analyst estimates, and said that it plans to eliminate 1,500 jobs to help deepen cost cuts.

The lender is a remnant of the company that fell prey to a takeover in 2007 by a group including Royal Bank of Scotland Group, Banco Santander and Fortis. The Dutch state stepped in the following year to rescue the bank in the throes of the financial crisis, spending almost 22 billion euros in the process. Under government ownership, ABN Amro transformed itself from one of the world's largest banks to a consumer lender focused on the Netherlands.

When it appointed Chief Financial Officer Kees van Dijkhuizen last week to succeed Chief Executive Officer Gerrit Zalm, the bank had unveiled plans to cut as many as 1,375 jobs by 2020., the bank said one of his tasks will be to complete the privatization. Finance Minister Jeroen Dijsselbloem heralded the executive's "strong sense for society".

"They're just sort of taking the profit at this moment, which is fair," said Vardhman Jain, an analyst at Macquarie in London with an outperform rating on the shares, said of the Dutch government. "They have disclosed that they would gradually phase out" their investment, "and it's in line with that."