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ABN Amro / BNP Paribas: private progression

21st April 2005
By BBR Staff Writer

ABN Amro has agreed the sale of its Dutch private banking unit to BNP Paribas.

BNP Paribas [BNP.PA] is to enter the Dutch private banking market with the purchase of Nachenius, Tjeenk & Co from ABN Amro [AAB.AS]. The deal reflects both banks' continuing plans to create a pan European private banking network. If the same pro-active approach can be extended to developing their recently acquired businesses then both groups look very well-placed for the future growth.

ABN Amro's move brings BNP Paribas E1.3 billion in assets under management and its first foothold within the Dutch wealth management market. The French bank has also bought businesses in Turkey and Spain in recent years, as well as some operations in smaller territories such as Monaco and Switzerland. Yet on a broader level, the deal is further proof of the two banks' proactive approach to delivering on their European strategies.

While ABN Amro and BNP Paribas were both slower off the mark than rival UBS in terms of merger and acquisition activity, the pace of their efforts has picked up significantly in the last 18 months and there is now a sense that they are laying the latter elements of the groundwork for their future European development.

Although ABN Amro is not revealing terms of the deal, analysts at Rabo Securities expect it to net the Dutch bank around E50-75 million. ABN Amro insists the sale was in accordance with its strategy to focus on its core activities, an explanation that may raise some eyebrows given that private banking in the Netherlands is clearly one line of business to which the group is heavily committed under its own ABN Amro private banking brand. The move is also slightly surprising given that it could have exploited similar synergies in the Dutch market to the ones BNP Paribas is proposing.

It would therefore seem that ABN Amro has taken this opportunity to reshuffle its private banking portfolio. Overall this is probably a sensible move, as it recognizes its strong penetration in the Dutch market gives it has less scope for growth there than in Italy, Portugal and Germany, where it has been actively deal-making in the last 18 months to secure itself a pan-European presence and a platform for growth.

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