Wednesday, April 25, 2007

The battle for ABN AMRO continues: bid from Fortis, Santander and RBS

While last week mr Wellink, the governor of the Dutch central bank (also bank supervisor) really annoyed the EU commission by stating that he found the combined of Fortis, Banco Santander and RBS as quite risky (more than the Barclays bid), the three have decided to do their bid on ABN AMRO. So, as can be seen in the press-release, the bidding continues...

And in reply to the statements of Dutch central banker Wellink, we can read the following:
The Banks believe that execution risk would be lower than in a transaction with Barclays. The Banks already have significant presence and experience in all of ABN AMRO’s main markets, and also have proven capabilities in delivering transaction benefits from large-scale integrations and IT conversions, underpinning their ability to manage and integrate ABN AMRO’s operations

Meanwhile, the Minister of Finance has made it clear that the central bank only has an advisory role on the merger. See the information here. Still, we should note that there is a significant difference between the neutral English version of the press releases and the Dutch version. The English version states that advice of the central bank will be sought:
Dutch law requires the government to issue a declaration of no-objection for holding or increasing a qualifying holding in Dutch Banks. If a request for such a declaration is made in a case involving one of the five largest Dutch Banks, the Minister of Finance decides on the request in cooperation with the Dutch Central Bank.

A decision to grant a declaration of no-objection shall also take into account the necessity of warranting the sound and prudent operations of the financial institution concerned as well as the transparency of the proposed structure of the financial institution. The Minister shall in this regard seek the advice of the Central Bank.

But the Dutch version (here) states that the Ministry of Finance will decide on the statement of no-objections, when positively advised by the Dutch central bank. This can either be a bit of uncareful translation or a bit of careful communication to different audiences. Could it be that the Minister of Finance wishes to assure the Dutch readers/public that it will follow the positive central bank advice (support Barclay) meanwhile suggesting to non-Dutch readers that it will decide independently (while taking aboard the advice of the central bank)?

As a reminder, we should note McCreevy's statements on the central bank behaviour. See the article in the Herald last week:
However, former Irish finance minister McCreevy leapt to the Scottish bank's defence yesterday through Oliver Drewes, his spokesman. Drewes said: "All bids should be assessed in a non-discriminatory way."
So are the English-reading public indeed now lulled to sleep with a neutral and non-discriminatory statement of our Ministry of Finance while the Dutch get a more informative wink as to the Ministries of Finance real position?