DBRS Says ABN AMRO Bank N.V.’s AA Ratings Unaffected by the Sale of Bouwfonds
Dominion Bond Rating Service (DBRS) says today that its AA long-term ratings of ABN AMRO Bank N.V. (ABN AMRO) were unaffected by the announcement of the sale of Bouwfonds Property Finance to Dutch bancassurance group SNS Reaal for total consideration of EUR 810 million. This follows the sale of Bouwfonds Property Development, Bouwfonds Asset Management and some related activities to Rabobank in July for EUR 845 million. DBRS says that these divestitures are consistent with ABN AMRO’s disposal plan initiated in 2005 for activities no longer fitting with the group’s strategy. DBRS also highlights the bank’s enhanced strategic focus and a more dynamic capital allocation to businesses where the bank intends to achieve a leadership position.
Initially acquired from Dutch municipalities in 2000 for EUR 1.9 billion, ABN AMRO merged Bouwfonds’s mortgage franchise within its own mortgage activities in March 2006, thus creating the third largest mortgage business in the Netherlands with prospects for higher critical mass, improved efficiency and profitability in the highly competitive Dutch retail market. ABN AMRO expects to book a total net gain of EUR 350 million on the Bouwfonds disposal.
ABN AMRO’s AA/R-1 (high) ratings assigned by DBRS in September 2006 have a Stable trend, and could take advantage, over the longer term, of progress in the bank’s operating leverage; of the upside potential expected from the Banca Antonveneta acquisition; and of measurable success in the implementation of the new strategy and business organization in terms of increased penetration, cross sale and turnover in key markets.
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