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15.12.2011 Official
Journal
of
the
European
Union
L
333/1
II
(Non-legislative acts)
DECISIONS
COMMISSION DECISION
of 5 April 2011
on the measures C 11/09 (ex NN 53b/08, NN 2/10 and N 19/10) implemented by the Dutch State for
ABN AMRO Group NV (created following the merger between Fortis Bank Nederland and ABN
AMRO N)
(notified under document C(2011) 2114)
(Only the English text is authentic)
(Text with EEA relevance)
(2011/823/EU)
THE EUROPEAN COMMISSION,
costs and obligations which stemmed from the
consortium shareholders agreement (‘CSA’). The CSA
described the rights and obligations of the three
Having regard to the Treaty on the Functioning of the European
financial institutions (Fortis SA/NV, Banco Santander
Union, and in particular the first subparagraph of Article 108(2)
and Royal Bank of Scotland (‘RBS’) or the three
thereof,
‘consortium members’) which had jointly bid for ABN
AMRO Holding via the newly created legal entity ‘RFS
Holdings’. On 7 October 2008, the Dutch State notified
the Commission of its measures of 3 October 2008
Having called on interested parties to submit their comments ( 1 )
(namely the acquisition of FBN for EUR 12,8 billion,
pursuant to Article 108(2) of the Treaty and having regard to
the novation of long-term loans with a nominal value
their comments,
of EUR 16,1 billion and the short-term liquidity facility
of EUR 45 billion, hereafter ‘the integrated transactions
of 3 October 2008’) as measures not constituting State
Whereas:
aid in order to get legal certainty on those measures.
Since the measures had already been implemented, the
Commission registered the case as an NN-case (that is,
NN53b/08).
1. PROCEDURE
(1) On
3
October
2008,
the
Dutch
State
acquired
Fortis
Bank Nederland (‘FBN’) (namely the Dutch banking
subsidiary of the financial holding company Fortis
SA/NV ( 2 )) including ABN AMRO Holding assets owned
by FBN (‘ABN AMRO N’) for an amount of EUR
(2)
During the negotiations leading to the acquisition of FBN
on 3 October 2008, the Dutch State relied on an
12,8 billion. In the same transaction, the Dutch State
external valuation report by […] (*), a copy of which
also replaced Fortis Bank SA/NV, the Belgian banking
was sent to the Commission on 15 October 2008.
subsidiary of Fortis SA/NV, as obligee in loans to FBN

with a nominal value of EUR 16,1 billion ( 3 ). The Dutch
State also granted FBN a short-term liquidity facility of
EUR 45 billion and agreed to indemnify Fortis SA/NV for
( 1 ) OJ C 124, 4.6.2009, p. 19 and OJ C 95, 15.4.2010, p. 10.
(3) By
letter
dated
30
October
2008,
the
Commission
( 2 ) Fortis SA/NV is also known as Fortis Holding. The pre-financial crisis
informed the Dutch Ministry of Finance of its preliminary
structure of Fortis SA/NV – which is relatively complex – is
described in point (6) of the Decision of 3 December 2008. The
opinion that the measures of 3 October 2008 seemed to
holding company Fortis SA/NV had grouped its banking activities in
constitute State aid to FBN. On 20 November 2008, a
the legal entity Fortis Bank SA/NV. Fortis Bank SA/NV on its turn
meeting took place between the services of the
was the owner of, inter alia, FBN.
Commission and the Dutch State.
( 3 ) A so-called ‘novation’, a legal transaction whereby a party to an
agreement is replaced with a new party leaving all other terms of
the agreement unchanged. (*)
[…]
Covered
by
the
obligation
of
professional
secrecy

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L 333/2
EN
Official Journal of the European Union
15.12.2011
(4) On
21
November
2008,
the
Dutch
State
officially
22 September 2009. The complainant provided further
decided that it would not keep FBN and ABN AMRO
information by letters of 21 August 2009 and 28 August
N apart, but instead would pursue a merger of the two
2009. These letters were forwarded to the Dutch State on
companies (‘the merger’), in line with the earlier plans of
23 September 2009 and the Dutch State replied on
Fortis SA/NV.
29 October 2009.
(5) On
3
December
2008,
the
Commission
took
a (11) On
15
May
2009,
the
Dutch
State
sent
a
letter
to
the
Decision ( 4 ) (‘the Decision of 3 December 2008’)
Commission answering a number of questions raised in
declaring the measures by the Dutch State of
the Decision of 8 April 2009. A detailed reply on
3 October 2008 in favour of Fortis Bank SA/NV as
substance – for which the Dutch State had asked more
State aid compatible with the common market.
time – was sent to the Commission on 11 August 2009.
However, recital 4 of that Decision stated explicitly that
the Commission would judge in a separate procedure
whether the measures implemented on 3 October 2008
also contained aid to FBN.
(12) In
a
non-paper
sent
on
15
June
2009
and
during
a
follow-up meeting with the Commission on 16 June
2009, the Dutch State informed the Commission of its
intention to implement a EUR 2,5 billion recapitalisation
(6) On
17
December
2008,
the
Dutch
State
informed
the
plan enabling ABN AMRO N to separate from its parent
Commission of its intention to acquire ABN AMRO N
company ABN AMRO Bank ( 6 ). During that meeting, the
from FBN for EUR 6,5 billion. The acquisition took place
Dutch State indicated that, after the first injection of EUR
on 24 December 2008. On 2 February 2009, the Dutch
2,5 billion, additional but not yet quantifiable measures
authorities notified that acquisition to the Commission as
would be necessary.
a measure not constituting State aid for reasons of legal
certainty.
(13) In the Decision of 8 April 2009, the Commission had
invited the Dutch financial supervisor (‘DNB’) to
(7) On
24
December
2008,
RBS,
Banco
Santander
and
the
comment on the soundness of FBN and ABN AMRO N
Dutch State signed an amendment to the CSA by which
respectively. The Commission received the requested
the Dutch State replaced Fortis SA/NV in the CSA.
information on FBN by letter of 18 June 2009 and an
update on 5 January 2010. The Dutch State also
forwarded a letter from DNB on ABN AMRO N on
20 January 2010.
(8) On
6
March
2009,
the
Dutch
State
sent
to
the
Commission a due diligence report ( 5 ) of the acquired
businesses which had been prepared by […] at the
request of the Dutch State.
(14) On 6 July
2009, ABN AMRO Bank – the parent
company of ABN AMRO N – sent a letter to the
Commission commenting on the Decision of 8 April
2009. That letter was forwarded to the Dutch State on
22 July 2009 and the Dutch State replied on
(9)
By Decision of 8 April 2009 (‘the Decision of 8 April
2009’), the Commission initiated the procedure laid
22 September 2009.
down in Article 108(2) of the Treaty under case
number C11/09 (ex-NN53b/08), with respect to alleged
aid granted to FBN and ABN AMRO N.
(15) On 9 July 2009, the Dutch State informed the
Commission that FBN had redeemed all the short-term
funding it had received from the Dutch State under the
3 October 2008 liquidity facility of EUR 45 billion.
(10) On
6
May
2009,
the
Commission
received
a
letter
of
complaint from Van Lanschot Bank (‘the complainant’),
a Dutch competitor of FBN and ABN AMRO N. That
letter was forwarded by the Commission to the Dutch
State on 22 July 2009, asking for comments. The Dutch
(16) On 15 July 2009, the Dutch State informed the
State asked for a deadline extension on 20 August 2009
Commission of plans by FBN to acquire Fortis Clearing
and sent a detailed answer to the complaint on
Americas (‘FCA’) from Fortis Bank SA/NV.
( 4 ) State aid case NN42/08 (Be), NN46/08 (Lux), NN53a/08 (NL), OJ
( 6 ) The financial holding company ABN AMRO Holding conducted its
C 80, 3.4.2009, p 8.
business almost entirely through its wholly owned subsidiary ABN
( 5 ) The due diligence report consists of five volumes: 1. ABN AMRO, 2.
AMRO Bank or that company’s own subsidiaries. For a detailed chart
Fortis Bank Netherlands, 3. Fortis Insurance Netherlands, 4. Fortis
describing the corporate situation at the time of the acquisition by
Corporate Insurance, 5. Subject Matter Memos.
RFS Holdings, see chart 1 in recital 41.

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EN
15.12.2011 Official
Journal
of
the
European
Union
L
333/3
(17) On
17
July
2009,
the
Dutch
State
formally
notified
a
Decision, the Commission temporarily approved those
plan with recapitalisation measures worth EUR
measures as rescue aid measures until 31 July 2010.
2,5 billion ( 7 ) consisting of a credit default swap (‘CDS’)
The Dutch State sent the Commission a letter with a
with a capital relief effect of EUR 1,7 billion (‘the capital
price leadership ban commitment applicable until the
relief instrument’ or ‘CRI’) and a Mandatory Convertible
end of 2010.
Security (‘MCS’) of EUR 800 million. The measures were
initially recorded under case number N429/09, but since
the measures were implemented before the Commission
had taken a decision on them, the case was moved from
(24) On
23
March
2010,
the
Commission
received
a
reply
by
the register of notified aid to the non-notified aid register
the Dutch State – which had asked for a deadline
(under number NN 2/10).
extension – to the Decision of 5 February 2010. The
Dutch State also provided extra information on the
December 2009 Restructuring Plan of the new ABN
AMRO Group with, inter alia, financial projections for
(18) On
10
September
2009,
the
Dutch
State
sent
a
non-
a worst case scenario.
paper to the Commission with an update of the
separation process and indications that additional
(unquantified) State aid measures would be unavoidable.
(25) The
Commission
asked
additional
questions
on
8
April
2010, which were answered on 7 May 2010. The Dutch
State also provided the Commission with extra
information on cross liabilities resulting from the imple
(19) During
a
meeting
with
the
Commission
on
9
November
mentation of the Merger Remedy ( 9 ) on 26 May 2010.
2009, the Dutch State indicated that FBN and ABN
On the same day, the Commission sent an electronic
AMRO N would need additional measures worth EUR
mail with follow-up questions, which were answered
4,39 billion, thereby bringing the total amount of
on 9 June 2010.
measures (including the measures notified on 17 July
2009) to EUR 6,89 billion. The measures were further
detailed in an addendum of 10 November 2009 to the
non-paper of 10 September 2009, and in an additional
(26) On 20 July 2010, the Dutch State asked the Commission
explanatory note of 13 November 2009.
to extend the temporary approval of the rescue aid
measures registered under NN2/10 and N19/10. The
Dutch State also sent a letter extending the price
leadership ban commitment until the earlier of 30 June
(20) On
26
November
2009,
the
Dutch
State
provided
the
2011 or until the adoption date of the final Decision of
Commission with a report of […] commenting on the
the Commission.
transaction of 24 December 2008. The submission also
contained some background material explaining […].
(27) On
30
July
2010,
the
Commission
decided
to
extend
the
temporary approval of the rescue aid measures registered
under case numbers NN2/10 and N19/10 until the
(21) On
4
December
2009,
the
Dutch
State
submitted
to
the
Commission had finalised its investigation C11/09.
Commission a first version ( 8 ) of a restructuring plan for
ABN AMRO Group (the ‘December 2009 Restructuring
Plan’), the new entity resulting from the merger between
FBN and ABN AMRO N. That plan described the new
(28) On
20 August 2010, the Dutch State sent to the
entity’s strategy and also contained financial projections
Commission a document explaining in detail its exit
for a base case scenario.
strategy.
(22) On 14 January 2010, the Dutch State formally notified
(29) On
5
October
2010,
the
Dutch
State
provided
a
business
the new State aid measures of EUR 4,39 billion in
plan for the private equity division of ABN AMRO
addition to the measures already notified in July 2009.
Group. A similar plan for the division ‘Energy,
The Commission registered the new measures under
Commodities and Transportation’ of ABN AMRO
number N19/10.
Group was sent to the Commission on 10 January 2010.
(30) On
15
October
2010,
ABN
AMRO
Group
announced
(23) By Decision of 5 February 2010 (‘the Decision of
that it would exercise its call option to terminate the
5 February 2010’), the Commission decided to extend
capital relief instrument as of 31 October 2010.
the investigation procedure C11/09 to include the
measures registered under NN2/10 and N19/10. In that
( 9 ) ABN AMRO N sold two entities (namely New HBU and IFN) to
Deutsche Bank in order to sort out the concentration issues on
( 7 ) Announced informally already in mid-June as described in recital 12.
the Dutch banking market resulting from the merger between
( 8 ) An updated version was provided on 8 November 2010 as is
ABN AMRO N and FBN. Further information on this can be
described in recital 31.
found in recitals 44 and 45.

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L 333/4
EN
Official Journal of the European Union
15.12.2011
(31) On
8
November
2010,
the
Dutch
State
sent
an
update
(36) ABN
AMRO
R
comprised, inter alia, the business unit
(‘the November 2010 Restructuring Plan’) – dated
(‘BU’) Global Business & Markets, BU Asia, BU Global
29 October 2010 – of ABN AMRO Group’s restructuring
Transaction Services and the international network,
plan of 4 December 2009. On 10 January 2011, the
while ABN AMRO S comprised, inter alia, BU Latin
Dutch State sent a document explaining how the ABN
America and BU Antonveneta (Italy).
AMRO Group updated forecasts of 8 November 2010
compared to the original forecasts of 4 December 2009.
(37) ABN
AMRO
N comprised
the
BUs
Netherlands
and
Private Banking and also the International Diamond
(32) During
the
procedure,
numerous
information
exchanges,
and Jewelry Group.
teleconferences and meetings between representatives of
the Dutch State, ABN AMRO N and FBN and the
European Commission took place.
(38) Items that were not allocated to the individual
consortium members were brought together in the so-
called ABN AMRO Z-share (‘ABN AMRO Z’), which
remained responsible for head office functions for
2. DETAILED DESCRIPTION OF THE BENEFICIARIES
instance. Each consortium member held a pro-rata
AND THE MEASURES
stake ( 11 ) in ABN AMRO Z.
2.1. The creation of ABN AMRO Group
(33) In
spring
2007,
the
consortium
members
created
a
new
(39) On
3
October
2008,
the
Dutch
State
acquired
FBN
from
legal entity ‘RFS Holdings’ to acquire ABN AMRO
Fortis Bank SA/NV for EUR 12,8 billion. As a result of
Holding.
that acquistion, the Dutch State also became the indirect
owner of ABN AMRO N, since FBN was – within Fortis
Bank SA/NV – the legal owner of ABN AMRO N. On
3 October 2008, the Dutch State also committed itself to
(34) The
consortium members intended to separate
ABN
indemnify Fortis SA/NV for any charge Fortis SA/NV
AMRO Holding into three parts and the arrangements
would face as a consequence of its continued presence
for that separation process were set out in the ‘CSA’.
in the CSA. On 24 December 2008, RBS, Banco
Santander and the Dutch State signed an amendment
to the CSA, by which the Dutch State replaced Fortis
(35) In order to facilitate the break-up, the consortium
SA/NV in the CSA.
members created so-called ‘tracking shares’ representing
the economic ownership of the businesses attributed to
each consortium member. As a result, RBS, Banco
(40) On
24
December
2008,
the
Dutch
State
acquired
ABN
Santander and Fortis SA/NV became the economic ( 10 )
AMRO N from FBN for EUR 6,5 billion, thereby
owners of respectively the so-called R-share, S-share
becoming the direct owner of ABN AMRO N. Prior to
and N-share (‘ABN AMRO R’, ‘ABN AMRO S’ and
that acquistion, the Dutch State controlled ABN AMRO
‘ABN AMRO N’).
N indirectly via FBN.
( 10 ) The so-called tracking shares had no legal status.
( 11 ) RBS (38,28 %), Santander (27,91 %) and Fortis SA/NV (33,81 %).

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EN
15.12.2011 Official
Journal
of
the
European
Union
L
333/5
(41) Chart
1:
Separation of ABN AMRO N
(42) On
21
November
2008,
the
Dutch
State
decided
that
it
would
merge
ABN
AMRO
N
with
FBN
(which had been the unimplemented intention of Fortis SA/NV). The merger could only be imple
mented once ABN AMRO N was separated from ABN AMRO Bank, its parent company. As a first
step, the activities of ABN AMRO N were transferred to a new legal entity within ABN AMRO Bank
which was named ABN AMRO II.
(43) On
6
February
2010,
ABN
AMRO
II
was
separated
as
described
in
recital
41
and
renamed
ABN
AMRO Bank. At the same time, the legal entity formerly known as ABN AMRO Bank was renamed
‘The Royal Bank of Scotland NV’ (‘RBS NV’) (see chart above).
(44) Before
the
new
entity,
ABN
AMRO
Bank,
could
merge
with
FBN,
it
first
had
to
implement
a
merger
remedy. When Fortis SA/NV acquired ABN AMRO N in 2007, the Commission had concluded ( 12 )
(the ‘Merger Decision’) that a merger between ABN AMRO N and FBN would lead to concentration
problems in the Dutch banking market, especially in the segments of commercial banking and
factoring.
(45) To
remedy
those
concentration
problems,
Fortis
SA/NV
committed
to
sell
a
number
of
activities
(that
is, the factoring division IFN and the commercial banking activities of ‘New HBU’) to Deutsche Bank.
When the Dutch State acquired FBN and ABN AMRO N on 3 October 2008, Fortis SA/NV had not
yet completed the intended sale of New HBU and IFN to Deutsche Bank. Once the Dutch State had
decided to proceed with the merger between FBN and ABN AMRO N, it resumed negotiations with
Deutsche Bank ( 13 ). The sale of New HBU and IFN to Deutsche Bank was closed on 1 April 2010.
( 12 ) For more details, see Commission Decision of 3 October 2007 in Case No M/4844 – Fortis/ABN AMRO Assets –
OJ C 265, 7.11.2007, p. 2.
( 13 ) On 23 December 2009, ABN AMRO Bank and Deutsche Bank signed a share purchase agreement for New HBU and
IFN. The transaction price amounted to EUR 700 million and the transaction also included a guarantee provided for
75 % of the credit losses of New HBU (‘credit umbrella’) up to a maximum of EUR 1,6 billion.

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L 333/6
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Official Journal of the European Union
15.12.2011
(46) New HBU had total assets of EUR [10 - 20] billion and employed around [1 000 - 1 500] full time
equivalents (‘FTEs’). New HBU included Hollandsche Bank Unie (‘HBU’) (a commercial bank owned by
ABN AMRO N), some ABN AMRO sales offices (13 out of a total of 78) and some ABN AMRO
Corporate Client Units (2 out of a total of 5).
(47) ABN AMRO Bank and FBN officially merged to form ABN AMRO Group on 1 July 2010, as is
described in the Chart 2 in recital 49.
(48) The Dutch State transferred the management of its stake in ABN AMRO Z to the new ABN AMRO
Bank as it did not want to dedicate resources to the day-to-day management of that participation.
Nevertheless, the Dutch State has remained the legal owner of ABN AMRO Z and is entitled to all
potential gains and liable for all potential losses of ABN AMRO Z ( 14 ).
(49) Chart
2:
Creation of ABN AMRO Group
( 14 ) By letter of 26 May 2010 to the Commission, the Dutch State described the corporate governance situation of ABN
AMRO Z as follows: ‘This means for example, that if an asset is sold and the sale creates a surplus of regulatory
capital, RFS Holdings would then be obliged … to repatriate the capital surplus to the consortium members. In the
case of a loss on an asset or the recognition of a new or increased liability, the consortium members would be
obliged to remediate any deficiency in regulatory capital. The economics of the Z-share are therefore owned directly
by the consortium members.’

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15.12.2011 Official
Journal
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European
Union
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333/7
2.2. Beneficiaries
(54) The
second
business
unit,
BU
Private
Banking
targeted
individuals with net investable assets of more than EUR
2.2.1. Economic activities of ABN AMRO N and ABN
1 million with various asset management and estate
AMRO Z
planning products. BU Private Banking had built up a
well-developed network, through organic growth in the
(50) ABN
AMRO
N
–
on
a
stand-alone
basis
the
third
largest
Netherlands and France and through acquisitions in
bank in the Netherlands behind Rabobank and ING –
Germany (Delbrück Bethmann Maffei) and Belgium
consisted of BU Netherlands and BU Private Banking.
(Bank Corluy). BU Private Banking also included the
French insurance joint venture Neuflize Vie.
(51) The
first
business
unit,
BU
Netherlands
offered
retail
and
commercial banking services via a branch network of
510 bank shops and 78 advisory branches and also
(55) The
businesses
acquired
on
3
October
2008
by
the
through alternative channels such as the Internet,
Dutch State also included the International Diamond
ATMs ( 15 ) and call centres. BU Netherlands employed
and Jewelry Group, which is a division dedicated to
roughly 19 000 FTEs.
companies involved in jewellery manufacturing and the
trading of diamonds.
(52) In
retail
banking,
BU
Netherlands
had
a
strong
customer
franchise segmented in ‘mass retail’ (more than [3,5 - 5]
million customers) and ‘preferred banking’ (more than
(56) ABN
AMRO
Z
did
not
contain
operational
assets
but
[250 000 – 420 000] customers) (
included, inter alia, tax assets, a number of participations

16 ), which it offered a
wide range of products (such as savings, investments,
(amongst others in the Saudi Hollandi Bank) and the
mortgages, insurance, credit card loans and payments).
remaining private equity portfolio. In terms of liabilities,

there was a provision to settle obligations in respect of
the United States Department of Justice, other provisions
(partly personnel-related) and inter-company financing of
(53) In commercial banking, ABN AMRO N serviced
[300 000 – 400 000] SME (
company assets. As stated in footnote 11, the stake

17 ) customers and [9 000 –
owned by the Dutch State represents 33,81 % of ABN
21 000] larger corporate customers (though under the
AMRO Z.
terms of the CSA, ABN AMRO Bank’s larger customers

were attributed to RBS) with a broad range of products
(such as credits, payment & cash management, savings,
treasury, risk and insurance management, complex
(57) A
number of pro-forma
key financial
data of ABN
financial solutions & products, leasing and factoring).
AMRO N are summarised in Table 1 below:
Table 1
Key financial data ABN AMRO N (in
million EUR)
2008 2009
Total operating income ( 1 ) 5
189 4
899
Net profit 471 (117)
Return on equity 6,7
% –
2,7
%
Cost-income ratio 73
% 77,5
%
Total assets 183
539 202
084
Total equity 7
044 4
278
( 2 )
RWA ( 3 ) 91
700 74
973
( 4 )
Tier 1 ratio 9,4
% 10,2
%
( 5 )
( 15 ) Automated Teller Machine.
( 16 ) ABN AMRO’s ‘preferred banking’ unit targeted the mass affluent
segment and included customers with liquid assets of more than
EUR 50 000 and net monthly income of more than EUR 5 000.
( 17 ) Small-and-medium-sized enterprises

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L 333/8
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Official Journal of the European Union
15.12.2011
Key financial data ABN AMRO N (in
million EUR)
2008 2009
Total capital ratio or BIS-ratio 12,6
% 14,8
%
Stable funding/non liquid assets 107
% 110
%
Source: ABN AMRO Bank NV, Annual Review 2009, ex ABN AMRO Z and private equity consolidation, but including New HBU.
( 1 ) Mainly ‘Net interest income’ and ‘Net commission and fee income’.
( 2 ) ABN AMRO’s press release on the 2009 results, dated 26 March 2010, explained that equity in 2009 declined by EUR
2,7 billion to EUR 4,3 billion, compared to 31 December 2008, mainly due to a reallocation of capital within ABN AMRO
Holding to cover the capital requirements for the Dutch State’s interest in ABN AMRO Z (see later Measure A).
( 3 ) Risk-weighted assets.
( 4 ) That figure already includes the reduction of RWA as a result of the capital relief instrument.
( 5 ) The press release on the 2009 results, dated 26 March 2010, explained that the increase of capital ratios (2009 compared to
2008) was mainly due to the following capital actions: ‘On 31 August 2009 the Ministry of Finance acquired a EUR
800 million Mandatory Convertible Tier-1 Security issued by ABN AMRO Bank. Also on that date a credit default swap
agreement was signed with the Ministry of Finance through which ABN AMRO Bank purchased credit protection on a EUR
34,5 billion portfolio of residential mortgages. On 23 December 2009, the Dutch State acquired two Mandatory Convertible
Securities. A EUR 967 million Mandatory Convertible Security was issued in December 2009 for the benefit of the former
ABN AMRO Bank. An EUR 833 million Mandatory Convertible Security was issued directly by the then ABN AMRO II N.V.,
now ABN AMRO Bank N.V., to cover the expected losses in respect of the EC Remedy business disposal. This instrument
classifies as regulatory capital as of January 2010. Conversion of the three Mandatory Convertible Securities after legal
separation will result in an increase of share capital in the amount of EUR 2,6 billion.’
(58) For
the
financial
year
2009,
ABN
AMRO
N
reported
a
loss
of
EUR
117
million.
The
loss
was
due
to
higher loan impairments, pressure on interest margins, higher charges related to the Dutch deposit
guarantee scheme and separation and integration costs ( 18 ). Excluding separation and integration
costs, ABN AMRO N would have recorded a small net profit for 2009 of EUR 52 million.
2.2.2. Fortis Bank Nederland (FBN)
(59) On a stand-alone basis, FBN was the fourth largest bank on the Dutch market (after Rabobank, ING
and ABN AMRO N, but before SNS REAAL).
(60) The
Dutch
State
(and
previously
Fortis
SA/NV)
held
directly
92,6
%
of
FBN,
with
the
investment
vehicle Fortis FBN(H) Preferred Investments BV owning the remaining stake of 7,4 % in the form of
preferred shares. The Dutch State owned 70 % of the shares in that investment vehicle, with the
remaining 30 % in the hands of a number of private investors ( 19 ). The privately-owned preferred
shares had a nominal value of EUR 210 million and a (non-cumulative) dividend of 5,85 % ( 20 ).
(61) FBN’s
activities
were
subdivided
in
three
segments
–
Retail
banking,
Private
banking
and
Merchant
banking.
(62) Retail Banking activities included the traditional retail banking activities (with a network of 157
branches, [2 - 3] million individual customers and [20 000 – 60 000] SME customers) but also
Directbank (which offered mortgage solutions via intermediaries) and the consumer finance and
payment card products of respectively Alfam and ICS.
(63) Private
Banking
was
mainly
developed
under
the
Fortis
Mees
Pierson
brand
name
and
offered
wealth
management services (estate planning, investing, lending and insurance) on a segmented basis to
[15 000 – 40 000] customers throughout the Netherlands.
( 18 ) Net interest income fell from EUR 3 223 million (2008) to EUR 2 994 million (2009) due mainly to interest margin
pressure in the first half of 2009. Non-interest income decreased by EUR 61 million or 3 % to EUR 1 905 million
and loan impairments increased from EUR 776 million in 2008 to EUR 1 172 million in 2009 (source: FY 2009
result press release of 26 March 2010).
( 19 ) […].
( 20 ) As of 1 January 2013 and every 5 years thereafter, the dividend will be recalculated and reset as: benchmark interest
rate + a spread, with the benchmark interest rate equal to the 5 year Euro denominated interest rate swap + a spread
reflecting the then prevailing market conditions.

---

EN
15.12.2011 Official
Journal
of
the
European
Union
L
333/9
(64) In Merchant Banking, FBN distinguished seven different sub-divisions. In the division ‘Commercial
Banking’ (1), FBN had 23 business centres offering multiple products to companies with a turnover of
up to EUR 250 million. Companies with a turnover of more than EUR 250 million as well as the
public sector were serviced by another subdivision, ‘Corporate & Public Banking’ (2). There were also
‘Investment banking’ (3) ( 21 ), ‘Specialised Financial Services’ (4) ( 22 ), ‘Energy, Commodities & Transportation’
(5), ‘Global Markets & Institutional Banking’ (6) ( 23 ) and ‘Clearing Funds & Custody’ (7) ( 24 ) sub-divisions.
(65) A
number
of
FBN’s
key
financial
data
are
summarised
in
Table
2
below:
Table 2
Key financial data FBN
(in million EUR)
2006 2007 2008
( 1 ) 2009
Total operating income 3
473 3
553 3
096 2
171
Net profit 1
157 1
296 –
18
486 406
Return on equity
20,1 % 8,9
% 4,9
% 0,7
%
(norm.) ( 2 )
Cost-income ratio 50,5
% 54,2
% 64,9
% 84,2
%
Total assets 209
749 272
378 184
203 189
785
Total equity 5
910 21
763 2
944 4
716
RWA 66
995 75
850 70
932 53
730
( 3 )
Tier 1 ratio 8,6
% 11,2
% 7,4
% 12,5
%
Total capital ratio 10,5
% 11,2
% 11,2
% 16,7
%
Loan-to-deposit ratio 167
% 237
% 208
%
Source: FBN annual reports 2008/2009.
( 1 ) The 2008 accounts took already into account the sale of ABN AMRO N to the Dutch State.
( 2 ) Normalised return on equity excludes the exceptional items.
( 3 ) Basel II with Basel I floor of 80 %.
(66) In 2008, FBN made a loss of EUR 18,5 billion, but that loss was to a large extent linked to
exceptional items. The company was obliged to report a net loss of EUR 16,8 billion on its stake
in RFS Holdings and the sale thereof and it also incurred an impairment of EUR 922 million (net of
taxes) in its division Prime Fund Solutions due to the Madoff fraud ( 25 ). Net underlying profit,
excluding those elements, came in to EUR 604 million, almost exclusively realised in the first half
of 2008.
(67) In
2009,
FBN
realised
a
net
profit
of
EUR
406
million,
helped
by
two
exceptional
gains
(a
EUR
362,5 million cash settlement with Fortis Capital Company) and a Madoff-related recovery of
provisions of EUR 16 million. Net underlying profit decreased to EUR 27 million ( 26 ) (from EUR
604 million in 2008).
( 21 ) Investment banking included, inter alia, business lending, real estate finance, acquisition & leverage finance, advisory,
structured finance and equity.
( 22 ) Specialised financial services included, inter alia, factoring, trade services and cashflow & working capital management.
( 23 ) Global Markets & Institutional Banking included, inter alia, forex, money markets, equity, fixed income and securities
finance.
( 24 ) Clearing Funds & Custody included, inter alia, brokerage, clearing and custody and also Prime Fund Solutions (‘PFS’)
(fund administration, bridge/leverage financing and banking to hedge funds).
( 25 ) FBN had no direct exposure to the Madoff fraud but it was exposed to collateralised leverage financing provided to
certain hedge funds which had invested in Madoff-managed accounts.
( 26 ) Net interest income fell from EUR 1 584 million in 2008 to EUR 1 150 million in 2009 on the back of higher
funding costs for savings and issued debt, while net commissions and fee income also fell (EUR 724 million in 2009
down from EUR 823 million in 2008). While total expenses decreased from EUR 2 010 million in 2008 to EUR
1 827 million in 2009, impairments increased from EUR 331 million in 2008 to EUR 412 million in 2009. Other
elements influencing the results were the profit on the sale of Intertrust (EUR 81 million), provisions related to the
bankruptcy of the Dutch bank DSB (EUR 15 million) and separation and integration costs (EUR 66 million).

---

L 333/10
EN
Official Journal of the European Union
15.12.2011
2.2.3. ABN AMRO Group
(73) In September 2009, FBN (and its partner Banque
Générale du Luxembourg (‘BGL’) ( 33 ) sold Intertrust to
(68) ABN
AMRO
Group,
which
was
created
following
the
private equity specialist Waterland. Intertrust is one of
merger between FBN and ABN AMRO Bank (that is to
the largest players in global trust and corporate
say ABN AMRO N activities) on 1 July 2010 groups all
management. It employs 1 000 experts in 19 countries
the activities of FBN and ABN AMRO N in two separate
and has operating income and RWA of respectively EUR
BUs, ‘Retail and Private banking’ and ‘Commercial and
[…] million and EUR […] million.
Merchant banking’. The group had a 2008 pro forma
operating income of EUR 7,15 billion and pro forma
total assets of EUR 360 billion. According to the latest
figures ( 27 ), ABN AMRO Group has total IFRS ( 28 ) equity
of EUR 11,7 billion.
(74) In
May
2010,
FBN
also
announced
the
sale
of
PFS
to
Credit Suisse. PFS provides fund services to the alter
native asset management industry including, for
example, administration, banking, custody and financing.
(69) ABN AMRO Group is well diversified with EUR
Its customers range from boutique asset managers to
4,2 billion operating income in ‘Retail and Private
large global institutions such as pension funds and
banking’ and EUR 2,8 billion operating income in
sovereign wealth funds. PFS was responsible for the
‘Commercial and Merchant banking’. Geographically,
EUR 922 million post-tax provision related to the
the bulk of ABN AMRO Group’s revenues (namely [65
Madoff-fraud which FBN registered in 2008. PFS has
- 95] % of the total) originates in the Netherlands.
income of EUR […] million and RWA of EUR […]
million.
(70) In ‘Retail and Private banking’, the integrated ABN
AMRO Group has market shares of [15 - 20] % and
[15 - 20] % ( 29 ) in respectively ‘mass retail’ and ‘preferred
(75) On
4
March
2011,
ABN
AMRO
Group
published
its
banking’ (
results for the fiscal year 2010, showing a net loss of

30 ), which makes it third-largest on the Dutch
banking market in terms of market share. In private
EUR 414 million. Excluding separation and integration
banking (branded ABN AMRO Mees Pierson), ABN
costs, ABN AMRO Group reported an underlying profit
AMRO Group is by far the largest in the Dutch market
of EUR 1 077 million. As at 31 December 2010, ABN
with a market share of approximately [30 - 40] % ( 31 ). In
AMRO Group’s Core Tier 1, Tier 1 and total capital ratio
‘Commercial and Merchant banking’, the market share of
were 10,4 %, 12,8 % and 16,6 % respectively. In consul
ABN AMRO Group is around [15 - 25] % ( 32 ).
tation with the Dutch State, ABN AMRO Group estab
lished a dividend policy targeting a dividend payout of
40 % of the reported annual profit.
(71) ABN
AMRO
Group
no
longer
includes
New
HBU
and
the factoring activities of IFN which were divested in the
framework of the Merger Remedy on 1 April 2010.
2.3. Description of the Restructuring Plan of
December 2009 and the updated Restructuring Plan
of November 2010
(76) The
Dutch
State
provided
the
Commission
with
the
(72) As
part
of
the
restructuring
process,
two
small
divisions
December 2009 Restructuring Plan on 4 December
of FBN (namely Intertrust and Prime Fund Solutions
2009. Further information was provided in March
(‘PFS’)) were also divested and are no longer part of the
2010 ( 34 ). A merger between FBN and ABN AMRO N
ABN AMRO Group.
is central to the business concept developed in the
December 2009 Restructuring Plan. ABN AMRO
Group, the new bank emerging from the December
( 27 ) Status at the end of 3Q 2010 (source: press release of
19 November 2010).
2009 Restructuring Plan, will focus on the mid-market
( 28 ) International Financial Reporting Standards.
segment in the Netherlands ( 35 ) and will be active in
( 29 ) See page 14 of the Restructuring plan of 4 December 2009, based
‘Retail and Private Banking’ and ‘Commercial and
on figures of Milward Brown/Teletrack.
Merchant Banking’.
( 30 ) ‘Preferred banking’ targets the mass affluent segment including
households with annual income higher than EUR 50 000 and/or
disposable assets between EUR 50 000 and EUR 1 million.
( 33 ) BGL is one of the largest banks in Luxembourg and was a sister
( 31 ) See page 15 of the Restructuring plan of 4 December 2009, based
company of FBN in Fortis SA/NV. BGL became a member of the
on assets under management (‘AUM’) figures from, inter alia, BCG
BNP Paribas Group in May 2009.
Wealth Management Database 2007.
( 34 ) The 2009 Restructuring Plan lacked essential information such as
( 32 ) That market share figure already takes into account the divestments
financial projections for a worst case scenario. The missing
of New HBU and IFN; see page 16 of the Restructuring Plan of
information was provided on 23 March 2010.
4 December 2009, based on TNS/NIPO/Financial Monitor for
( 35 ) Roughly [65 - 95] % of operating income will come from the
Commercial Banking and Corporate Clients.
Netherlands.

---

EN
15.12.2011 Official
Journal
of
the
European
Union L
333/11
(77) The
December
2009
Restructuring
Plan
starts
from
the
B a s e c a s e s c e n a r i o
diagnosis that the capital needs were not related to the
underlying performance of FBN and ABN AMRO N, but
(81) In
the
base
case
scenario,
the
Dutch
State
starts
from
the
rather to the need to finance their respective separation
assumption that business volumes will grow in line with
from their parent companies and the up-front integration
inflation. Personnel costs are assumed to rise by [1 - 6] %
costs of the merger.
per annum and other costs by a more moderate [1 - 5] %
per annum The Dutch State also anticipates that ABN
AMRO Group’s loan loss provisions will start to
decrease from the high level reported in 2009.
(78) In a counterfactual scenario without State aid, the
December 2009 Restructuring Plan acknowledges that,
without the coordinated effort of the Benelux
governments, Fortis SA/NV would have collapsed,
(82) In
the
base
case
scenario
in
the
November
2010
Restruc
which would also have dragged down FBN and ABN
turing Plan, ABN AMRO Group realises a negative net
AMRO N.
result of EUR […] million in 2010 before returning to
profits from 2011 on (that is, EUR […] million profit in
2011).
(79) The December 2009 Restructuring Plan contains
financial projections for the period 2009-2012 with a
divisional breakdown into Retail Banking, Private
Banking NL, Private Banking International and
(83) In
2012
and
2013,
it
is
expected
that
ABN
AMRO
Commercial & Merchant Banking. Specifically for 2012,
Group’s net profits increase to respectively EUR […]
ABN AMRO Group has also calculated a ‘run-rate’ profit,
million and EUR […] million, translating in a Return
which excludes transition costs and assumes that cost
on Equity ( 36 ) (‘RoE’) of around […] %. The improvement
synergies were already accounted for the full year.
of the ABN AMRO Group’s profitability is driven by
Those projections were provided for a base case
better operating income (which should recover after the
scenario and a worst case scenario.
weak 2009 figure), the cost-cutting programme which at
cruise speed should lower costs by EUR 1,1 billion pre-
tax per annum and a normalisation of loan loss provisions
after a peak in 2009. In 2013, ABN AMRO Group’s cost-
(80) On
8
November
2010
in,
the
Dutch
State
updated
the
income ratio is projected to be […] %.
December 2009 Restructuring Plan’s financial projections
for the period until 2012, including additional
projections for 2013 in the November 2010 Restruc
turing Plan.
(84) Base
case
scenario
Table 3
2009
2010
(Actual)
(E ( 1 ))
2011 (E) 2012 (E) 2012 run
rate (E) 2013 (E)
Operating income 7
039 […] […] […] […] […]
Net interest income 4
528 […] […] […] […] […]
Net fee & comm. income 1
933 […] […] […] […] […]
Other income 849 […] […] […] […] […]
Operating expenses –
5
568 […] […] […] […] […]
Op. exp. – business as usual –
5
258 […] […] […] […] […]
Op exp. – transition –
310 […] […] […]
Operating result 1
471 […] […] […] […] […]
Loan impairments –
1
585 […] […] […] […] […]
Profit before taxes –
114 […] […] […] […] […]
Taxes and minorities 45 […] […] […] […] […]
( 36 ) The Return on Equity is the amount of net income returned as a
percentage of shareholders equity.

---

L 333/12
EN
Official Journal of the European Union
15.12.2011
2009
2010
(Actual)
(E ( 1 ))
2011 (E) 2012 (E) 2012 run
rate (E) 2013 (E)
Net profit –
68 […] […] […] […] […]
Underlying net profit
163 […] […] […] […] […]
(ex transition costs)
( 1 ) ‘E’ stands for ‘Estimate’.
W o r s t c a s e s c e n a r i o
The final decision on the IPO rests with the Dutch
Minister of Finance and will depend on market circum
(85) Under the worst case scenario in the November 2010
stances, the ‘IPO readiness’ of ABN AMRO Group and
Restructuring Plan, the Dutch State started from more
the expected proceeds. On 24 January 2011, the Dutch
conservative assumptions than under the base case
government also publicly set out its exit strategy ( 38 ).
scenario. It used interest margins which were 7,5 %
lower than in the base case, more cautious forecasts
for commissions & fees (growth of 4 % per annum as
opposed to 7 % in the base case), lower synergies
C a p i t a l A d e q u a c y
(impact of – EUR […] million on 2013 profit) and
15 % lower recovery rate of loan loss provisions
(89) The
December
2009
Restructuring
Plan
(and
also
the
(impact of – EUR […] million on 2013 profit).
updated November 2010 Restructuring Plan) show that
– after implementation of all the State aid measures-
ABN AMRO Group is sufficiently capitalised. During
the restructuring period, the projected Tier 1 ratios
should stay comfortably above […] % between 2009
(86) While,
those
more
conservative
figures
would
lead
to
and 2012, to increase further to […] % in 2013.
lower results, ABN AMRO Group would still be able to
post a profit. The worst case scenario foresees an
underlying net profit of EUR […] million and EUR
[…] million in respectively 2012 and 2013 (which
D i v e s t m e n t s
compares to respectively EUR […] million and EUR
(90) In its December 2009 Restructuring Plan, the Dutch State
[…] million in the base case scenario).
explains that ABN AMRO Group has already divested a
number of businesses. Apart from the sale of New HBU
and IFN during the Merger Remedy process, ABN AMRO
N and FBN also divested Intertrust and PFS.
E x i t
(87) In its December 2009 Restructuring Plan, the Dutch State
also touched upon its exit strategy, underlining that it
(91) Compared
to
ABN
AMRO
Group,
Intertrust
and
PFS
jointly represent [0 - 5] %, [0 - 5] % and [0 - 5] % in
does not have the intention to remain a long-term
terms of its projected total operating income, costs and
investor in ABN AMRO Group.
RWA respectively.
(92) During
the
restructuring
process,
FBN
also
made
an
(88) By
letter
of
20
August
2010,
the
Dutch
State
provided
acquisition to correct a misalignment resulting from the
the Commission with more details on its exit strategy.
break-up of Fortis SA/NV. FBN was the legal owner of
The Dutch State explained that it is contemplating a
the BU Brokerage, Clearing and Custody and all the
placement in the form of an IPO ( 37 ), but is keeping
offices related to that business except for the Chicago
open other options such as a private sale to an
office, which had remained part of Fortis Bank SA/NV.
investor or market participant. In its letter of
To correct that separation-linked misalignment, FBN
20 August 2010, the Dutch State indicates that a first
acquired the Chicago branch of Fortis Clearing
stake of between [0 - 50] - [10 - 60] % might be made
Americas from Fortis Bank SA/NV on 31 July 2009
available for an IPO in […] at the earliest, followed by a
for a price of approximately USD […] million.
secondary offering of another [0 - 50] - [10 - 60] % in
2015. The Dutch State wants to earn back its initial
investment increased by its cost of funding of [2 - 5]
%. It is the Dutch State’s intention to reduce its stake in
2.4. Description of the measures
ABN AMRO Group up to a maximum of [25 - 65] %,
preferably before the end of [2014 - 2018]. Ultimately,
(93) To identify the individual State aid measures, the
the Dutch State is fully committed to a complete exit.
Commission uses in this Decision the same letter codes
as in its Decision of 5 February 2010.
( 37 ) Initial Public Offering or the first sale of a company to the public.
After an IPO, a company’s shares will be listed on a public stock
( 38 ) http://www.rijksoverheid.nl/nieuws/2011/01/24/exitbeleid-
exchange.
financiele-deelnemingen.html

---

EN
15.12.2011 Official
Journal
of
the
European
Union L
333/13
2.4.1. Measures covered by the Decision of 8 April 2009
developed a two-step system encouraging FBN to reduce
its reliance on the State. A first tranche of funding (irre
(94) On
3
October
2008,
the
Dutch
State
acquired
FBN
spective of the maturity) was made available at EURIBOR
(including ABN AMRO N) from Fortis SA/NV for EUR
+ 25 basis points but once that threshold was exceeded,
12,8 billion (‘Measure X’). The Commission did not open
FBN could only get extra liquidity at EURIBOR + 50
the procedure in respect of that measure, which as such
basis points ( 44 ). The amount of the total liquidity
did not provide State aid to FBN, even if it was part of a
facility and the amount of the first threshold were
transaction providing State aid to FBN (see recital 32 of
gradually lowered. On 9 July 2009, the Dutch State
the Decision of 8 April 2009).
informed the Commission that FBN had repaid all its
short-term loans to the State.
(95) At the time of the FBN’s acquisition by the Dutch State,
FBN depended heavily on Fortis Bank SA/NV for its
funding. To ensure full separation of FBN from Fortis
(97) The
long-term
loans
novated
to
the
Dutch
State
(Measure
Bank SA/NV, it was necessary for the Dutch State to
Y2) amounted to EUR 16,1 billion, including EUR
end the funding relationship between FBN and Fortis
8,15 billion of Tier 2 capital (of which EUR 3 billion
Bank SA/NV. To cut the existing links, the Dutch State
upper Tier 2) and EUR 7,95 billion of senior loans.
granted FBN a short-term liquidity facility of EUR
45 billion (‘Measure Y1’) on 3 October 2008. That
liquidity facility allowed FBN to repay to Fortis Bank
SA/NV short-term loans of EUR 34 billion. The Dutch
State also replaced Fortis Bank SA/NV as a lender of
long-term loans to FBN for a nominal amount of EUR
(98) On
24
December
2008,
the
Dutch
State
acquired
ABN
16,1 billion in a so-called ‘novation’ (‘Measure Y2’) (
AMRO N from FBN for EUR 6,5 billion (‘Measure Z’).

39 ).
The Dutch State did not pay in cash but paid for the
purchase by cancelling EUR 6,5 billion of long-term debt
it had obtained in the integrated transactions of
3 October 2008 as part of Measure Y2. In other
words, the Dutch State waived EUR 6,5 billion of
(96) The
short-term
liquidity
facility
covered
by
Measure
Y1
claims towards FBN to pay for ABN AMRO N ( 45 ).
remained in place until the end of June 2009. While that
measure was in place the remuneration changed a
number of times. In the period between 6 October
2008 and 23 October 2008, the Dutch State provided
FBN short-term funding at EONIA ( 40 ) (for overnight
lending with a maximum amount of EUR 5 billion) or
2.4.2. Measures covered by the Decision of 5 February 2010
EURIBOR ( 41 ) (for longer-term liquidity with a maximum
amount of EUR 40 billion) without any extra spread.
(99) Some of the measures covered by the Decision of
After 23 October 2008, there was a short period (until
5 February 2010 ( 46 ) were notified to the Commission
5 November 2008) during which the Dutch State applied
in July 2009 and the remainder in January 2010. In July
EONIA + 50 basis points and EURIBOR + 50 basis
2009, the Dutch State notified a capital relief instrument
points. During that second period, that arrangement
or ‘CRI’ (‘Measure A’ with a capital relief effect of EUR
was still for maximum amounts of EUR 5 billion for
1,7 billion), a Mandatory Convertible Security (‘MCS’) of
overnight liquidity and EUR 40 billion for longer-term
EUR 500 million (‘Measure B1’) and a second MCS-
liquidity. In the period between 5 November 2008 and
tranche of EUR 300 million (‘Measure B2’).
1 March 2009, the Dutch State changed the remun
eration to EONIA + 25 basis points for overnight
loans, EURIBOR + 25 basis points for loans with a
maturity ( 42 ) of less than 3 months and EURIBOR + 50
basis points for loans with a maturity of more than 3
months ( 43 ). After 1 March 2009, the Dutch State
(100) In January 2010, the Dutch State notified additional
capital measures worth EUR 4,39 billion. The Dutch
State subscribed to additional MCS-instruments of EUR
( 39 ) All contractual features of the existing loan contracts remained
2,28 billion to cover additional separation costs (EUR
unchanged, except the name of the lender.
( 40 ) Eonia (Euro OverNight Index Average) is an effective overnight
780 million, ‘Measure B3’), the capital shortfall resulting
rate computed as a weighted average of all overnight unsecured
from the sale of New HBU (EUR 300 million, ‘Measure
lending transactions in the interbank market, initiated within the
B4’) and integration costs (EUR 1,2 billion, ‘Measure B5’).
euro area by the contributing panel banks.
To bring FBN’s Tier 1 capital in line with regulatory
( 41 ) Euribor (Euro Interbank Offered Rate) is the rate at which euro
interbank term deposits are being offered by one prime bank to
another within the European Monetary Union zone.
( 44 ) For example, in March 2009, the maximum liquidity facility
( 42 ) The date on which a debt comes due for payment.
amounted to EUR 34 billion with the first 24 billion made
( 43 ) Early November 2009, the liquidity facility still amounted to EUR
available at EURIBOR + 25 bp and the remaining EUR 10 billion
45 billion (EUR 5 billion overnight and EUR 40 billion longer-term
at EURIBOR + 50 bp.
liquidity). But from 14 November 2008 on, the facility was reduced
( 45 ) That amount included EUR 4,9 billion of Tier 2 loans (of which
to EUR 39 billion (still EUR 5 billion overnight but only EUR
EUR 3 billion upper Tier 2) and EUR 1,6 billion of senior loans.
34 billion longer-term liquidity).
( 46 ) OJ C 95, 15.4.2010, p. 10.

---

L 333/14
EN
Official Journal of the European Union
15.12.2011
requirements, the Dutch State also converted EUR
(108) Under the CSA, the three consortium partners had to
1,35 billion of FBN-Tier 2 capital it already owned into
ensure that ABN AMRO Z remained sufficiently capi
Tier 1 capital (‘Measure C’). The Dutch State also paid the
talised. In that context, the Dutch State had to contribute
other consortium members EUR 740 million in cash
EUR 2,2 billion to the ABN AMRO Z capital shortfall.
(‘Measure D’) as was foreseen in the CSA to settle
The aim of the CRI was to allow ABN AMRO N to make
issues that only emerged in the course of the separation
part of that EUR 2,2 billion contribution to ABN
process. Finally, the Dutch State also provided a
AMRO Z.
guarantee on cross liabilities resulting from the sale of
New HBU (‘Measure E’).
(109) The Dutch State preferred the unconventional CRI-
Capital relief instrument (Measure A, capital equivalent of
solution over a traditional capital increase since, prior
EUR 1,7 billion)
to the separation, it could not ring-fence capital
contributions in ABN AMRO Bank. In other words,
(101) The Dutch State sold credit protection via a CDS on a
since ABN AMRO N was not a separate legal entity, a
Dutch mortgage portfolio of ABN AMRO N, representing
capital injection in ABN AMRO Bank could also have
around [30 - 80] % of ABN AMRO N’s total home loan
benefited the other two consortium members. That
portfolio. That measure had the effect of reducing the
course of action could have had severe implications
risk weighted assets of ABN AMRO N.
especially in scenarios of increased distress.
(102) To remunerate the credit protection, the Dutch State
received an annual fee of 51,5 basis points (calculated
(110) When the separation took place, ABN AMRO N became
as a percentage of the portfolio value in the beginning of
a separate legal entity (the new ABN AMRO Bank). The
each reference period).
Dutch State continued to bear the responsibility under
the CSA to fill the EUR 2,2 billion capital shortage of
ABN AMRO Z. The Dutch State decided that ABN
AMRO N should use cash from MCS-instruments
(103) That fee was calculated using the capital equivalent cost
(namely Measure B3 insofar as it related to the prudential
methodology. The Dutch State determined how much
margin of EUR 500 million and EUR 1,2 billion of
capital ABN AMRO N could free up due to the capital
Measure B5) to inject EUR 1,7 billion in ABN AMRO
relief instrument (namely EUR 1,7 billion, based on Basel
Z, while it kept the CRI in place in the new ABN
I requirements which were still applied at the time the
AMRO Bank to cover the prudential margin of EUR
CRI agreement was implemented) and then it calculated a
500 million and the integration costs of EUR 1,2 billion.
return of 10 % on that capital relief (namely 10 % on
EUR 1,7 billion), which was equivalent to 51,5 basis
points of the initial portfolio value of EUR 34,5 billion.
(111) On 15 October 2010, ABN AMRO Bank and the Dutch
State announced that the CRI would be terminated as of
(104) Each year, ABN AMRO N kept a first loss tranche of 20
30 October 2010. Indeed, as ABN AMRO Bank had in
basis points (calculated as a percentage of the initial
the meantime implemented the Basel II requirements, the
portfolio value).
CRI had become less interesting and less necessary ( 48 ).
(105) ABN AMRO N kept a vertical slice of 5 % of the
remaining risk.
Mandatory Convertible Security to cover part of the of ABN
AMRO Z capital shortfall (Measure B1, EUR 500 million)
(112) Since the CRI did not suffice to cover the entire EUR
(106) The pricing of the credit protection instrument would
2,2 billion capital shortfall of ABN AMRO Z, the Dutch
not be adjusted once ABN AMRO N fully adopted
State provided extra capital to ABN AMRO Bank via an
Basel II capital requirments, even though the capital
MCS.
relief effect of the CRI would then be substantially
smaller.
(113) That MCS was categorised as hybrid Tier 1 capital, it
(107) In principle, the CDS-contract had a maturity of 7 years,
carried a coupon of 10 % and automatically converted
but ABN AMRO N had call options enabling it to
into shares of ABN AMRO II at the time of the
terminate the contract on a number of pre-determined
separation of ABN AMRO N from ABN AMRO Bank.
reference dates (for example October 2010, January
From that moment on, it qualified as core Tier 1 capital.
2011 and January 2012) ( 47 ).
( 48 ) As was also indicated on 15 October 2010 in the official letter of
( 47 ) More details on that measure can be found in section 2.2.1 of the
the Dutch Minister of Finance to the Dutch Parliament: https://zoek.
Decision of 5 February 2010, OJ C 95, 15.4.2010, p. 10.
officielebekendmakingen.nl/kst-31789-40.html.

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15.12.2011 Official
Journal
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European
Union L
333/15
The conversion took place at nominal value ( 49 ). The
with some margin above the minimum regulatory
measure allowed ABN AMRO II (renamed ABN AMRO
requirements.
Bank) to contribute EUR 500 million to ABN AMRO Z.
Mandatory Convertible Security to cover capital shortfall due to
Mandatory Convertible Security to cover separation costs
sale of New HBU (Measure B4, EUR 300 million)
(Measures B2 and B3, EUR 1,08 billion in total)
(119) FBN and ABN AMRO N could only merge once the
(114) In order to cover costs related to the separation of ABN
concentration issues identified in the Merger Decision
AMRO N from ABN AMRO Bank, the Dutch State
were resolved. Therefore, the Dutch State decided to
subscribed to additional MCS. A first tranche of
sell New HBU and IFN to Deutsche Bank. That trans
roughly EUR 300 million (Measure B2) was notified in
action resulted however in an additional capital need of
July 2009, with the remainder (namely EUR 780 million)
EUR 470 million, which ABN AMRO N could not deal
notified in January 2010 (Measure B3).
with entirely on its own. The Dutch State decided to help
and injected EUR 300 million in the form of MCS ( 50 ).
(115) The full amount of EUR 1,08 billion (namely Measures
B2 and B3 together) was needed to cover the following
Mandatory Convertible Security to cover integration costs
costs:
(Measure B5, EUR 1,2 billion)
(120) To implement the merger, ABN AMRO N and FBN (and
after the merger ABN AMRO Group) had to pay for
upfront integration costs of EUR 1,2 billion (after tax),
— EUR 480 million of well-defined separation costs;
related to redundancy costs, the integration of ICT
platforms and the restructuring of the branch network.
Since ABN AMRO N and FBN were not able to finance
those costs themselves, the Dutch State decided to inject
— EUR 90 million to set up a money market desk; and
capital in the form of MCS ( 51 ).
— EUR 500 million to provide for a prudential margin.
Conversion of FBN Tier 2 hybrid capital into core Tier 1
capital (Measure C, EUR 1,35 billion)
(121) FBN was obliged to increase its Tier 1 capital after the
DNB (
(116) The Dutch State provided a further breakdown of the

52 ) had indicated that there was a Tier 1 capital
separation costs of EUR 480 million. They related to
shortage of approximately EUR 1,26 billion. After the
cross liabilities exposure (EUR [0 - 200] million),
separation from its parent company Fortis SA/NV, FBN
unwinding of risk allocation letters (EUR [0 - 200]
also had to spend EUR 90 million to cover costs related
million), repurchase of securitisation notes (EUR [0 -
to the set up of a treasury desk, Basel-related models,
200] million), the transfer from ABN AMRO R of
licenses and consultancy services.
trading-related market risk of ABN AMRO N customers
(EUR [0 - 200] million), discontinuation of capital relief
( 50 ) The Dutch State indicated in its Communication to Parliament of
instruments (EUR [0 - 200] million) and sundry
19 November 2009 (page 10 of http://www.rijksoverheid.nl/
separation and unwinding costs (EUR [0 - 300] million).
documenten-en-publicaties/kamerstukken/2009/11/20/ec-remedy-

en-herkapitalisatie-abn-amro-en-fortis-bank-nederland.html) that the
total negative capital impact of EUR 470 million was the result of
the negative difference between the transaction price and the book
value (i.e. 180 million EUR) and the costs of a credit umbrella
granted to Deutsche Bank (i.e. 740
million EUR), partly
(117) After the separation from its parent company ABN
compensated by the capital relief of the transferred RWA (i.e.
AMRO Bank, ABN AMRO II needed to set up a
450 million EUR). The Dutch State explained in that document
money market desk on its own, which cost EUR
that the total capital impact would gradually decrease (mainly
90 million.
because the loan portfolio protected by the credit umbrella will
mature). The capital impact after 1 year would be only EUR
180 million (rather than EUR 470 million at the time of the trans
action).
( 51 ) When the Dutch State provided capital in the form of MCS
(118) Finally, the Dutch State injected another EUR 500 million
(Measures B1 to B5) after the separation of ABN AMRO II, it
in capital to ensure that ABN AMRO N could operate
immediately converted the MCS into shares, which made it de
facto a capital contribution in cash.
( 52 ) In a letter dated 17 December 2009 and registered on 5 January
( 49 ) The contractual features of the MCS implied that if capital problems
2010, the DNB wrote to the Commission that it had informed FBN
had surfaced before the separation, the MCS would have converted
on 3 September 2009 on the results of its ‘Supervisory Review and
into Non-Cumulative Modified Securities, the only difference with
Evaluation Process 2009’. The DNB decided […] – that FBN had a
the original securities being that the coupon payments would have
Tier 1 capital shortage of 1,26 billion EUR as of 31 December
been no longer cumulative. Under IFRS, the Non-Cumulative
2008. Simultaneously, the DNB also set FBN’s minimum Tier 1
Modified Securities would have qualified as equity.
ratio at […] %.

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L 333/16
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Official Journal of the European Union
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(122) The Dutch State provided that extra capital by converting
towards its own creditors. Likewise New HBU will face
Tier 2 debt with a nominal value of EUR 1,35 billion
cross liabilities towards creditors of ABN AMRO Bank
into Tier 1 capital. Consequently, the transaction did not
and ABN AMRO II. Since the cross liabilities were
involve any new cash ( 53 ).
rooted in the sale of New HBU which resulted from a
decision of ABN AMRO II and its shareholders, it was
also their responsibility to find a solution. The proposed
Payment obligations towards other consortium members
solution implied that the Dutch State and Deutsche Bank
(Measure D, EUR 740 million)
(namely the purchaser of New HBU) agreed that new
HBU and ABN AMRO II would indemnify each other
(123) When the consortium members negotiated the
acquisition of ABN AMRO Holding in 2007, they
for those cross liabilities by providing each other
realised that not all facts were already known at the
collateral, so as to reduce the induced regulatory capital
time. Therefore, the CSA contained a number of
requirements to a desired 20 %. As a result of that
general principles to settle certain payment obligations,
agreement, ABN AMRO II had to provide collateral to
which would only become apparent during the
New HBU for an amount up to EUR 950 million
separation process. The exact amounts result from a
(declining over time as underlying liabilities mature) for
negotiating process in which the Dutch State (and
the liabilities of New HBU towards ABN AMRO II and
Fortis SA/NV before it) participated.
towards ABN AMRO Bank (now RBS NV). Since ABN

AMRO II did not have the means to provide the
collateral needed in respect of the liability towards
(124) The total amount of EUR 740 million relates to:
ABN AMRO Bank (now RBS NV), the State provided a
counter-indemnity in the form of a guarantee on the
debt of ABN AMRO Bank (now RBS NV).
[…]
(127) The Dutch State priced that risk as if it was a State
Those cash outflows are partly compensated by the fact
guarantee on ABN AMRO Bank (now RBS NV) subor
that the Dutch State received […] from the other
dinated debt. The pricing – based on the European
consortium members related to stranded costs.
Central Bank (‘ECB’) Recapitalisation Recommen
dation ( 54 )– was set at 200 basis points plus the
(125) The balance of the payment obligations in respect of
median CDS-spread ( 55 ).
other consortium members (namely EUR 740 million)
was paid in cash, in part directly to the other consortium
members and in part to ABN AMRO Bank (now RBS
(128) Table 4 summarises the measures assessed in this
NV).
Decision. The column ‘Reason’ is the same as that in
Table 1 at point (57) of the Decision of 5 February
2010. As indicated in recital 110, following the
Cross liabilities (Measure E, EUR 950 million)
separation of ABN AMRO N with ABN AMRO Bank
on 6 February 2010, the measures and the objectives
(126) Even after the divestment of New HBU, ABN AMRO
of the measures were reshuffled. More specifically,
Bank (now RBS NV) and ABN AMRO II (or its legal
Measure A was used from that date on for the objectives
successors) will remain liable towards creditors of New
of Measure B3 (insofar as it concerns the prudential
HBU if New HBU is unable to meet its obligations
margin) and Measure B5 and vice versa.
Table 4
State support measures Description
Size
(in EUR billion)
Reason
Legal entity to which
the measure is granted
Measures covered by the Decision of 8 April 2009
Y1 ST
funding 45 FBN
Y2 LT
funding 16,1 FBN
(to
allow
repayment to Fortis
Bank SA/NV)
( 53 ) On 3 October 2008, the Dutch State took over EUR 16,1 billion of
long-term FBN debt (Measure Y2). The Tier 2 loans came down
from initially 8,15 billion EUR to 1,9 billion EUR (minus EUR
4,9 billion because of Measure Z and minus 1,35 billion because
( 54 ) Pricing based on European Central Bank Recapitalisation Recom
of Measure C). The senior loans were reduced from EUR
mendation, which can be found on the following weblink: www.
7,95 billion to EUR 5,95 billion because of Measure Z (minus
ecb.eu/pub/pdf/other/recommendations_on_pricing_for_
EUR 1,6 billion) and also because loans of EUR 0,4 billion
recapitalisationsen.pdf
reached maturity (status as at 4 May 2010).
( 55 ) The CDS reference period is January 2007 – August 2008.

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State support measures Description
Size
(in EUR billion)
Reason
Legal entity to which
the measure is granted
Z Acquisition
of
ABN
6,5 FBN
(purchase
price
AMRO N
paid by waiving
debt)
Capital measures notified in July 2009 and implemented in July/August 2009
Measure A Capital
relief
CDS-protection on Filling the capital ABN AMRO Bank
instrument
a EUR 34,5 billion shortage of ABN (now RBS NV) and
portfolio (having a AMRO Z
moved to ABN
capital relief effect
AMRO II (now ABN
of EUR 1,7 billion)
AMRO Bank) on
separation date
Measure B1 MCS 0,5
Measure B2 MCS 0,3 First
tranche
of
ABN AMRO Bank
separation costs
NV (now RBS NV)
and moved to ABN
AMRO II (now ABN
AMRO Bank on
separation)
Additional capital measures notified in January 2010
Measure B3 MCS 0,78 Second
tranche
of
EUR 967
million
separation costs
paid to ABN AMRO
and prudential
Bank (now RBS NV)
margin of EUR and then moved to
0,5 billion
ABN AMRO II (now
ABN AMRO Bank)
on separation, the
Measure B4 MCS 0,3 Capital
remainder directly
impact
from
sale of new HBU
paid to ABN AMRO
II
Measure B5 MCS 1,2 Integration
costs
Measure C Exchange
Tier
2 1,35 Tier
1
shortage
at
FBN
into common
the level of FBN
equity
Measure D Cash
payment
to 0,74 Payment
obligations
Other consortium
consortium partners
resulting from the partners/ABN AMRO
CSA
Bank (now RBS NV)
Measure E Guarantee
on 0,95 Cross
liabilities
ABN AMRO II (now
liabilities of EUR
resulting from sale ABN AMRO Bank)
950 million
of new HBU
3. GROUNDS TO OPEN
favour of FBN and ABN AMRO N. The Commission
believed that those measures allowed FBN and ABN
3.1. Grounds to open in the Decision of 8 April
AMRO N to stay on the market and pursue their
2009
activities. It had reasons to believe that those measures
were selectively advantageous to FBN and ABN AMRO N.
(129) In the Decision of 8 April 2009, the Commission opened
proceedings because it had grounds to believe that
Measures Y1, Y2 and Z ( 56 ) represented State aid in
(130) In recitals 29 and 30 of the Decision of 8 April 2009,
the Commission noted that Measures X, Y1 and Y2 were
( 56 ) In respect of Measure X, the Commission in recital 32 of the
part of the same sale contract, which aimed at separating
Decision of 8 April 2009 indicated that while Measure X did not
provide State aid as such to those banks, it was nevertheless part of
FBN from the rest of the Fortis SA/NV. The Decision of
a set of integrated transactions containing State aid to those banks.
3 December 2008 already concluded that by entering

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L 333/18
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Official Journal of the European Union
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in that contract on 3 October 2008, the Dutch State had
taken sufficient measures to limit undue distortions of
not acted as a normal investor in a market economy.
competition, in line with point (27) of the Banking
Communication.
(131) In recital 33 of the Decision of 8 April 2009, the
Commission argued that Measure Y1 was apparently
(135) The Commission was also concerned that ABN AMRO N
advantageous to FBN as it had received an amount of
had – potentially indirectly – benefited from the liquidity
funding, which it could not have found on the markets,
measures provided to FBN. Therefore, it asked the Dutch
the markets being at the time in complete disarray.
State to provide more information on ABN AMRO N’s
Keeping in mind those extreme market circumstances,
funding position and funding strategy.
the Commission also doubted that the interest rates
required by the Dutch State would have been acceptable
to a private investor. The Commission also noted that
the solidity of its new funding provider seemed advan
tageous to FBN. FBN was no longer dependent on a
(136) With respect to Measure Z, the Commission doubted that
liquidity-constrained company in distress like Fortis
the Dutch State paid FBN the market price for the
SA/NV but received its funding from the Dutch State.
acquisition of ABN AMRO N. The Commission
observed that the Dutch State paid more than the
3 October 2008 ‘current market conditions’ valuation
of the Dutch State’s own valuation expert […] in its
report which was mentioned in recital 2. Moreover, the
(132) The Commission doubted that Measure Y1 was
Commission observed that the Dutch State had not
compatible with the Communication from the
applied a correction factor to reflect the stock market
Commission – The application of State aid rules to
decline that occurred between October and December
measures taken in relation to financial institutions in
2008 and which was especially pronounced for bank
the context of the current global financial crisis (the
stocks. If the Dutch State overpaid when buying ABN
‘Banking Communication’) ( 57 ) as it was neither propor
AMRO N, Measure Z was equivalent to State aid
tional nor limited to the minimum necessary. More
helping to recapitalise FBN.
specific concerns were raised in recital 52 of the
Decision of 8 April 2009 on the compatibility of the
following elements: (1) the remuneration that FBN paid,
(2) the maximum period during which FBN could benefit
from funding, (3) the maximum maturity of instruments
(137) In general, the Commission also observed in the Decision
concerned and (4) the volume of the liquidity facility.
of 8 April 2009 that the Dutch State had not yet
submitted an evaluation of FBN and ABN AMRO N by
the DNB. Nor had the Dutch State provided a viability
plan or a restructuring plan with detailed financial
(133) The Commission also indicated that Measure Y2 could
projections. Because neither a viability plan nor a restruc
contain elements of State aid if Fortis Bank SA/NV was at
turing plan were available, the Commission was unable
the time of the acquisition in a position to request the
to determine whether, as a result of Measures X, Y1, Y2
immediate redemption of the long-term loans should the
and Z, ABN AMRO N and FBN had sufficient capital and
ownership of FBN change. If there was indeed an
were able to realise an acceptable level of profitability.
ownership-related redemption clause, Measure Y2
allowed FBN to benefit from long-term loans at pre-
crisis interest rates. Measure Y2 implied that FBN was
not obliged to find alternative funding at the prevailing
3.2. Grounds to extend the proceedings in the
market conditions at that time. Moreover, since Fortis
Decision of 5 February 2010
Bank SA/NV had the right to ask for redemption, the
Dutch State choice to provide of long-term loans rather
E x i s t e n c e o f S t a t e a i d i n a c c o r d a n c e
than short-term loans could be questioned. Therefore, in
w i t h A r t i c l e 1 0 7 ( 1 ) o f t h e T r e a t y
the Decision of 8 April 2009, the Commission voiced
concerns that Measure Y2 contained State aid for a
(138) When on 17 July 2009 and on 15 January 2010, the
longer-term period than was strictly necessary. To be in
Dutch State notified extra measures in favour of FBN and
a position to evaluate the State aid implications of
ABN AMRO N as measures not constituting State aid, the
Measure Y2, the Commission requested the Dutch State
Commission was concerned that some of these additional
to provide more information on the contractual early
measures represented extra State aid to FBN and ABN
redemption terms of the long-term loan contracts.
AMRO N.
(134) In recital 54 of the Decision of 8 April 2009, the
(139) In the Decision of 5 February 2010, the Commission
Commission also doubted whether the Dutch State had
observed that under the CSA the Dutch State had a
number of obligations, which were not obligations of
( 57 ) OJ C 270, 25.10.2008, p 8.
ABN AMRO N. Measures taken by the Dutch State to

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Union L
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comply with its obligations under the CSA (and in
(143) The Commission took note of the fact that the merger
particular the obligation to bear the cost of ABN
and the specific conditions surrounding the separation
AMRO Z and the obligation to separate ABN AMRO
resulted in cross liabilities (Measure E). Dutch corporate
N from ABN AMRO Bank) would at first sight not
law implied that ABN AMRO Bank (now RBS NV) and
qualify as State aid to ABN AMRO N.
ABN AMRO II remained liable for the debt-holders of
New HBU should New HBU (or its new owner Deutsche
Bank) fail to fulfil its payment obligations. New HBU had
similar obligations vis-à-vis debt-holders of ABN AMRO
Bank (now RBS NV) and ABN AMRO II). The
Commission could not exclude that the indemnification
(140) The Commission indicated that the Measures A and B1
solution, which implied that the Dutch State guaranteed
seemed primarily designed to cover the capital shortage
the debt-holders of ABN Amro Bank (now RBS NV) at a
of ABN AMRO Z, but at the same time it was not clear
premium of 200 basis points plus the median CDS-
to the Commission whether there was not also an
spread, implied State aid.
indirect benefit to the economic activities of ABN
AMRO N. In that regard, the Commission wanted to
know whether ABN AMRO N and ABN AMRO Z –
with no separate legal status – were sufficiently ring-
fenced vis-à-vis one another. The Commission also
wanted to receive more information on the reasons
behind the capital shortfall of ABN AMRO Z and for
instance on the transfer of Unicredito shares from ABN
C o m p a t i b i l i t y w i t h t h e I m p a i r e d A s s e t
AMRO Z to ABN AMRO N. The Commission also had
C o m m u n i c a t i o n
questions as to the remuneration by ABN AMRO N to
(144) The Commission also raised concerns about the design of
ABN AMRO Z for the performance of head office
the capital relief instrument (Measure A). The
functions. The Commission suspected that – at least
Commission acknowledged that Measure A was funda
part of – the undercapitalisation of ABN AMRO Z was
mentally different from other impaired asset measures as
linked to the fact that ABN AMRO N did not pay a
it was not put in place to protect ABN AMRO N against
market price for the head office services of ABN
further declines in toxic assets with a highly uncertain
AMRO Z.
valuation. Nevertheless, the Commission considered that
to be compatible with the internal market, Measure A
should comply with the general principles of the
Communication from the Commission on the
treatment of impaired assets in the Community
(141) Even though the separation of ABN AMRO N from ABN
banking sector ( 58 ) (the ‘Impaired Asset Communication’).
AMRO Bank is an obligation of the Dutch State under
More specifically, there should be sufficient evidence of
the CSA, the Commission could not exclude that the
appropriate pricing, meaning that the bank should not
State recapitalisation financing the separation costs
transfer expected losses to the State. In that regard, the
could be State aid. The Commission observed that not
Commission also wanted to understand what impact a
all costs categorised as separation costs were strictu senso
number of specific contractual features (for example. the
linked to the separation obligations as described in the
clawback mechanism and the vertical slice) would have
CSA. The Commission noticed that the category
on the actual cashflows and pricing. Finally, the
‘separation costs’ included an amount of EUR
Commission also doubted that there were insufficient
500 million which was needed to provide ABN AMRO
incentives ensuring that ABN AMRO N would
Group with a prudential margin over minimum
terminate the instrument as soon as it was no longer
prudential requirements.
strictly necessary.
(142) The Commission observed that the Dutch State helped
FBN and ABN AMRO N to pay the costs related to the
C o m p a t i b i l i t y w i t h t h e R e s t r u c t u r i n g
merger. To resolve concentration problems created by
C o m m u n i c a t i o n
the merger, ABN AMRO N decided to sell IFN and
New HBU, which led to a new capital shortfall. The
(145) The Commission doubted whether the December 2009
Commission observed that FBN and ABN AMRO N
Restructuring Plan fulfilled the criteria set forward in the
were able to profit from the benefits of the merger (for
Communication for the Commission on the return to
example merger synergies, the advantages of being a
viability and the assessment of restructuring measures
stronger company with higher market shares on the
in the financial sector in the current crisis under the
Dutch market, …), while the Dutch State financed the
State aid rules ( 59 ) (the ‘Restructuring Communication’)
upfront costs. In that regard, the Commission observed
in terms of viability, burden-sharing and undue
that there was no legal obligation for the Dutch State to
distortions of competition.
pay those costs since they originated in the decision of
the Dutch State of 21 November 2008 to merge FBN
( 58 ) OJ C 72, 26.3.2009, p. 1.
and ABN AMRO N and not in the CSA.
( 59 ) OJ C 195, 19.8.2009, p. 9.

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R e s t o r a t i o n o f l o n g - t e r m v i a b i l i t y
of ABN AMRO Group and to provide it with, inter alia, a
detailed list of activities that ABN AMRO Group needed
(146) The Commission acknowledged that ABN AMRO Group
to rebuild for viability reasons.
would at first sight realise sufficient revenues to cover all
its operational costs (including impairments) and earn an
acceptable return on equity. However, the Commission
also noted that the return on equity of ABN AMRO
Group depended to a large extent on the realisation of
a number of key assumptions. First, if ABN AMRO
(150) The Commission also doubted whether all hybrid capital
Group wants to become cost-efficient with an acceptable
providers of FBN and ABN AMRO N had paid their share
cost-income ratio, it is crucial that ABN AMRO Group
of the restructuring. The Commission was concerned
implements the projected synergies (namely EUR
that, for instance, the preferred shareholders of FBN ( 60 )
1,1 billion pre-tax which compares to a 2013 net
had not sufficiently contributed to ensure that the inter
profit of […] billion EUR). Second, as indicated in
vention of the Dutch State was not limited to the
recital 118 of the Decision of 5 February 2010, it was
minimum necessary.
also of crucial importance for the viability of ABN
AMRO Group that it would be able to improve its net
interest margin from the low levels of FBN and ABN
AMRO N in the second half of 2008 and the first half
of 2009. In its Decision of 5 February 2010, the
(151) Also in terms of duration, the State aid should be limited
Commission indicated that it needed more details on
to the minimum necessary. In that regard, the
those issues, so as to evaluate whether long-term
Commission observed that a number of measures were
viability had truly been restored.
needed to address temporary problems, but the
Commission doubted whether the Dutch State had
taken sufficient steps ensuring that the measures would
be unwound once they were no longer necessary.
(147) The Commission also noted that the December 2009
Restructuring Plan did not yet include financial
projections for a worst case scenario as required by
point (13) of the Restructuring Communication.
(152) With regard to Measure A, the Commission observed
Therefore, the Commission asked for such worst case
that the CRI would become unattractive once ABN
financial projections, allowing it to verify how ABN
AMRO N was allowed to implement Basel II
AMRO Group would perform in more stressful market
requirements. Although the CRI contained call features
conditions.
allowing for an early termination of the contract, the
Commission observed that there was no clear timetable
for the Dutch State’s exit.
(148) The Commission also observed that the December 2009
Restructuring Plan contained little information on smaller
sub-divisions, so that the Commission could not judge
whether all viability issues at that level had been
(153) Also with regard to the prudential margin of EUR
500 million, the Commission noted that the intention
sufficiently addressed. More specifically, the Commission
was that ABN AMRO Group replaced that amount by
doubted whether viability of PFS, a division of FBN,
self-financed capital. Again the Commission observed
which reported major Madoff-related losses in 2008,
that there was no indication whatsoever on timing.
was sufficiently guaranteed.

A i d l i m i t e d t o t h e m i n i m u m n e c e
(154) With respect to the integration costs of EUR 1,2 billion
s s a r y / o w n c o n t r i b u t i o n
(namely Measure B5), the Commission observed that the
Dutch State claimed that these would lead to important
(149) The Commission questioned whether the State aid was
synergies of EUR 1,1 billion (pre-tax) per year, which
limited to the minimum necessary to restore the viability
could in principle be used to repay the State aid. Yet,
of ABN AMRO Group. In that respect, it noted that ABN
the Commission observed that the Dutch State had not
AMRO Group had indicated that it wished to make small
put in place a mechanism ensuring such a repayment.
add-on acquisitions, which it deemed necessary to rebuild
On the capital needs related to the sale of New HBU, the
product competences lost during the separation processes
Commission concluded that the capital requirements
from Fortis SA/NV and ABN AMRO Holding. In the
related to the credit umbrella would decline rapidly as
Decision of 5 February 2010, the Commission argued
loans would gradually mature. Again, the Commission
that State aid should not be used to finance acquisitions
underlined that the State aid should be repaid once it
or new investments unless essential for restoring the
was no longer necessary.
viability of an undertaking. The Commission asked the
Dutch State to shed more light on the acquisition policy
( 60 ) For more information see recital 60.

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L i m i t a t i o n o f d i s t o r t i o n s o f c o m p e t i t i o n
about their bank’s risk profile as they are protected by
the Dutch Deposit Guarantee Scheme (up to an amount
(155) In terms of distortion of competition, the Commission
of EUR 100 000). Risk awareness increases however once
noted that the capital needs of FBN and ABN AMRO N
that threshold is passed, which is rather common in
stemmed to a certain extent from their separation of
private banking.
their former parent companies and from upfront inte
gration costs, and not from excessive risk-taking or
mismanagement within FBN and ABN AMRO N them
selves. Against that background, the Commission
(161) The complainant also argued that FBN and ABN AMRO
concluded that further divestments were unlikely to be
N benefit from an implicit State guarantee. It argued that
necessary.
customers of FBN and ABN AMRO N are convinced that
the Dutch State will not allow State-owned banks to go
bankrupt.
(156) At the same time however, the Commission expressed
doubts that the December 2009 Restructuring Plan
contained sufficient behavioural measures to ensure that
(162) The complainant – which weathered the crisis without
FBN and ABN AMRO N would not use the State aid to
State aid – underlined that it was severely affected by
grow at the expense of their competitors, for example by
FBN and ABN AMRO N distortive behaviour as it
implementing an unsustainable pricing policy or
relied traditionally to an important extent on the Dutch
acquiring other financial institutions, which could
savings market to fund its assets ( 61 ). In absolute figures,
weaken the incentives of non-beneficiaries to compete,
the complainant had savings & deposits of EUR
invest and innovate and could discourage entry in the
15 billion, which implied that a 1 % increase in interest
Dutch banking market.
rates could cost the company approximately EUR
150 million per year ( 62 ). In addition to that cost
increase, there was also a volume effect as Van
Lanschot lost customers.
(157) In terms of exit, the Commission argued that it would be
helpful if the Dutch State developed and clearly
communicated an exit strategy. Indeed, the repeated
4.2. Follow-up comments of Van Lanschot (letters of
and massive interventions of the Dutch State could be
21 and 28 August 2009)
perceived by depositors as a sign of its permanent
support.
(163) According to the complainant, the unusual behaviour of
FBN and ABN AMRO N persisted over the summer
months of 2009.
4. COMMENTS FROM INTERESTED PARTIES
4.1. First set of comments from Van Lanschot (letter
(164) As an additional argument, the complainant referred to
of 6 May 2009)
unusually large volume and market share changes in the
traditionally stable Dutch savings market. In that regard,
(158) The complainant argued that thanks to the State aid and
the complainant pointed to FBN and ABN AMRO N
State ownership, FBN and ABN AMRO N (including their
press releases which reported deposit inflows of
subsidiaries such as MoneYou and Mees Pierson) offered
respectively EUR 9 billion and EUR 21 billion in the
unsustainably high interest rates on individual savings
first half of 2009 ( 63 ). The complainant deemed those
and deposit accounts, thereby destabilising the Dutch
figures to be sizeable given the fact that the total
banking market.
Dutch savings market is worth approximately EUR
287 billion.
(159) The complainant believed that interest rates offered by
FBN and ABN AMRO N were loss-making. In that regard,
(165) As another illustration of unusual pricing, the
complainant referred to the fact that savings interest
it referred to the fact that EURIBOR rates declined from
rates in neighbouring countries such as Belgium, France
5 % in September 2008 to less than 2 % in January/
and Germany had followed the decline in EURIBOR
February 2009, while interest rates offered by FBN and
rates, while Dutch savings interest rates had remained
ABN AMRO N on savings accounts actually rose.
stubbornly high.
( 61 ) This is also illustrated by the complainant’s low loan-to-deposit
ratio, which was at the time of the complaint approximately 110 %.
(160) The complainant also points at the specificities in the
( 62 ) Van Lanschot’s net profit figures were EUR 215,4 million, EUR
Dutch private banking market when compared to the
30,1 million and EUR 14,8 million in respectively 2007, 2008
retail banking market, which tend to increase the
and 2009. In the first half of 2010, the company reported a net
distortive effect of the measures taken. Saving amounts
profit of EUR 20,3 million.
( 63 ) ABN AMRO press releases of 25 May 2009 and 26 August 2009
in private banking are on average larger than in retail
on 1Q09 and 2Q09 results and FBN press release of 20 August
banking. For low savings amounts, customers care less
2009 on 1H09 results.

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4.3. Comments from ABN AMRO Bank (letter of
(170) With respect to the period during which FBN’s liquidity
6 July 2009)
facility was made available, the Dutch State explained
that it started negotiations on ending the liquidity
(166) Commenting on the Decision of 8 April 2009 launching
facility in January 2009 with the aim of ending the
the formal investigation procedure, ABN AMRO Bank
liquidity facility as fast as possible. With that objective
(i.e. the parent company of ABN AMRO N) provided
in mind, the Dutch State introduced in March 2009 a
more information on its funding position and funding
new two-step pricing system, which made funding more
strategy. ABN AMRO Bank denied it had benefitted –
expensive if it exceeded a pre-defined threshold. The
directly or indirectly – from any funding aid given to
Dutch State assumed that FBN could repay the liquidity
FBN (Measures Y1 and Y2). ABN AMRO Bank pointed
facility at a rate of EUR 4 to 5 billion a month and
out that it had not needed help to fund itself throughout
intended to end the liquidity facility by the end of
the crisis thanks to its diversified funding strategy. It also
2009. In reality, FBN repaid the liquidity facility faster
underlined that its liquidity statistics remained well
than anticipated. The liquidity facility was already ended
within regulatory limits and within its own internal
on 1 July 2009.
limits as well.
5. COMMENTS FROM THE DUTCH STATE
5.1. Comments from the Dutch State on the
Decision of 8 April 2009
(171) The Dutch State argued that the maximum maturity of

the liquidity provided under the liquidity facility was
(167) The Dutch State acknowledged that FBN had been able to
proportional. In that regard, the Dutch State explained
pursue its activities because of its acquisition by the
that in the first period (i.e. from 6 to 23 October 2008),
State (
it had granted liquidity with a maturity of not more than

64 ), but it argued that the acquisition was in line
with the so-called ‘market economy investor principle’
a few weeks. When the liquidity facility was subsequently
(MEIP). As a result, according to the Dutch State there
adjusted, the maximum maturity was prolonged to 9
was no selective advantage and consequently no State
months to avoid redemption peaks.
aid. The Dutch State claimed that – even though the
integrated transactions of 3 October 2008 were
primarily meant to prevent the destabilisation of FBN
and ABN AMRO N and the Dutch banking system in
general – by purchasing participations in FBN and ABN
AMRO N it aimed to make a positive long-term return.
The Dutch State underlined that the price for FBN
(172) The Dutch State explained that the total volume of the
(including ABN AMRO N) was within the valuation
liquidity facility (namely EUR 5 billion overnight and
range of its external valuation expert.
EUR 40 billion longer-term funding) was based on
FBN’s real financing needs and was therefore the
minimum necessary. The short-term liquidity facility of
EUR 45 billion took into account the normal volatility of
(168) The Dutch State claimed that it had paid a fair market
FBN’s cash position and it also allowed FBN to
price for FBN but it pointed out that even if it overpaid,
immediately repay approximately EUR 34 billion to
that payment would have been State aid to Fortis SA/NV
Fortis SA/NV.
(which was the selling company) and not State aid to
FBN.
(169) With respect to Measure Y1, the Dutch State claimed that
it provided short-term funding to FBN at market
(173) With respect to the long-term loans (namely Measure
conditions. It argued that before the crisis FBN received
Y2), the Dutch State acknowledged that Fortis Bank
funding from its parent company at EONIA or EURIBOR
SA/NV could have requested the repayment of the
rates without any extra spread. The Dutch State argued
fixed-interest rate loans (but not of the variable-rate
that the pricing it applied (as described in recital 96) was
loans) ( 66 ). The Dutch State argued however that it
in line with market practice. More specifically, it also
argued that its pricing system used for the period after
( 66 ) The relevant prospectus extracts of the fixed-interest loans reads as
5 November 2008 (with a 50 basis points spread for
follows: ‘The total outstanding amount of the loans …. shall be due
loans of more than 3 months) was aligned with the
and payable at once on First demand ….if any of the following
Dutch Guarantee Scheme (
events should occur: (d) if a petition is filed or an order is made or

65 ).
an effective resolution is passed for the winding up of the
borrower,… or if the borrower cease to carry on its business, or
( 64 ) Reply of the Dutch State on Decision of 8 April 2009, 11 August
the shares in the borrower are transferred or delivered to any third
2009, page 6.
party or the control over the borrower shall otherwise have been
( 65 ) In its letter of 15 May 2009, the Dutch State indicated that its
passed to any third party;’ (source: letter of Dutch authorities of
pricing system meant ‘to prevent excessive divergence between the
15 May 2009 page 4) (emphasis by the Commission). There were
prices for the loans to FBN and prices charged to banks for
EUR 7,9 billion fixed-interest loans, out of the total amount of
providing a guarantee under the Guarantee Scheme’.
long-term loans of EUR 16,1 billion.

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had only replaced Fortis Bank SA/NV leaving all the
(177) The Dutch State also underlined that the other
conditions of the existing contracts unchanged.
consortium members, and in particular RBS, had to
According to the Dutch State, the contract between
approve the transaction and that […]. The Dutch State
Fortis Bank SA/NV and FBN was a normal market
also refers to points (166) and (177) of the preliminary
contract between private market actors. The Dutch
report of experts to the General Shareholders’ Meeting of
State argued that – because it had replaced a market
Fortis SA/NV on 11 February 2009 in Brussels ( 69 ),
economy investor – its behaviour was automatically in
claiming that those points support the Dutch State’s
line with the MEIP. As such, the Dutch State considered
argument that it paid a fair price for FBN, ABN AMRO
it did not have to justify why rates could have been
N, Fortis Insurance and Fortis Corporate Insurance on
higher or why it should have replaced those long-term
3 October 2008, which constitutes therefore a valid
loans by shorter-term loans ( 67 ).
reference price for the sale of December 2008.
(178) The Dutch State implemented Measure Z by waiving
(174) The Dutch State also argued that it was quite common
claims it had towards FBN. Furthermore, the Dutch
for companies, when pursuing acquisitions, to simul
State claimed that the Commission – if it were to
taneously provide liquidity to newly-acquired subsidiaries.
come to the conclusion that Measure Z implied State
aid – should apply a correction. Since similar instruments
of other banks were trading at a substantial discount to
par ( 70 ), it was logical that the market value of the debt
instruments waived by the Dutch State was also below
(175) As to whether direct or indirect State aid had been
par. In other words, the prevailing market circumstances
provided to ABN AMRO N, the Dutch State denied
suggested that the Dutch State was not entitled to par
that ABN AMRO N received funding from the Dutch
value but to a lower market value. The Dutch State
State or FBN. The Dutch State explained that ABN
argued that, taking into account the then prevailing
AMRO N, with its large retail and private banking
market circumstances, it was only entitled to a market
franchise, had sufficient funding of its own.
value of EUR [4,55 - 5,85] billion (so the par value of
the loans of EUR 6,5 billion corrected for a market
discount of EUR [0,65 - 1,95] billion).
(176) With respect to Measure Z, the Dutch State claimed that
the transaction price of EUR 6,5 billion was a fair market
(179) On 18 June 2009, the Dutch Ministry of Finance
price. It underlined that the price was between the
forwarded to the Commission the evaluation of FBN by
‘current market conditions’ valuation of EUR [4 - 6,5]
DNB as requested in the Decision of 8 April 2009.
billion and the ‘through the cycle’ valuation of EUR [6,5 -
[…] ( 71 ), ( 72 ), ( 73 )
9] billion as calculated by its external valuation expert at
the beginning of October 2008 (prior to the 3 October
2008 transaction). As regards to the fact that the
acquisition (Measure Z) took place two and a half
months after that valuation was made, the Dutch State
(180) DNB also informed the Commission on […] ABN AMRO
believed that no corrections were necessary since uncer
N by letter of 20 January 2010. […]
tainties were already reflected in the early October 2008
valuation ( 68 ). The Dutch State also argued that
investment banking and toxic assets were usually at the
basis of confidence problems in other banks, translating
into important share price declines for those banks. ABN
5.2. Comments from the Dutch State on the
AMRO N, by contrast, with its stable retail and
Decision of 5 February 2010
commercial bank profile, was fundamentally different to
other banks. Given that context, the Dutch State argued
(181) In general, the Dutch State argued that the measures
that a price correction by analogy to other banks made
taken did not constitute State aid because the measures:
no sense.
( 67 ) Page 7 of the Dutch reply of 11 August 2009 on the Decision of
8 April 2009 reads as follows: ‘The Dutch State has only taken the
place of Fortis Bank SA/NV in a contract which (as already said)
(i) did not benefit ABN AMRO N nor FBN,
was concluded between two market parties. Thus the tariffs of the
contract are in conformity with market rates. It is unclear why it
should be demonstrated that these tariffs could have been even
( 69 ) http://www.ageas.com/Documents/FR_ER_27012009.pdf.
higher or that the maturities could have been shorter, as the
( 70 ) Par value is equal to the nominal or face value of a security. A bond
current conditions are already in conformity with market practice.’
selling at par is worth an amount equivalent to its value upon
(original text in Dutch, translation by the Commission).
redemption at maturity-typically EUR 1 000 per bond.
( 68 ) In the valuation exercise of 3 October 2008, the State’s external
( 71 ) […]
valuation expert applied a discount on annualised earnings of the
( 72 ) […]
companies concerned of 20 %.
( 73 ) See also recitals 121 and 122 and footnote 52.

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(ii) were necessary to separate ABN AMRO N and FBN
(187) The Dutch State argued Measure A and Measure B1 did
from their respective former parent companies and
not qualify as State aid, since the State was contractually
followed from contractual obligations of the Dutch
obliged to resolve capital problems faced by ABN AMRO
State as successor to Fortis SA/NV in the CSA, or
Z. The Dutch State was contractually obliged under the
CSA to implement the separation of ABN AMRO
Holding. DNB only allowed the separation of ABN
AMRO II to start if all the consortium members had
(iii) were economically rational from the viewpoint of a
paid their share in the capital shortage of ABN AMRO
private investor.
Z. The Dutch State admitted that it had provided capital
to ABN AMRO Z via ABN AMRO N but it underlined
that ABN AMRO N only acted as an intermediate vehicle.
Ultimately, ABN AMRO N had only passed capital
(182) The Dutch State argued that the Commission should
through to ABN AMRO Z and Measure A did not
apply the MEIP to every individual measure that the
selectively advantage ABN AMRO N.
Dutch State had taken. Particularly concerning the
merger-related measures (namely Measures B4 and B5),
the Dutch State underlined that the merger was an
investment with a positive net present value (‘NPV’)
and therefore compatible with the MEIP.
(188) As to whether the capital shortage of ABN AMRO Z was
the result of selective advantages granted to ABN AMRO
(183) In other words, the Dutch State did not accept the
N, the Dutch State stated that the consortium members
Commission’s preliminary position, as developed in
had already ensured at the time of the acquisition of ABN
recital 96 of the Decision of 5 February 2010, that the
AMRO Holdings by the consortium (see recital 33) that
MEIP did not apply to the measures following the inte
the activities of the different tracking shares (as defined in
grated transactions of 3 October 2008 State, since those
recital 35) were sufficiently ring-fenced vis-à-vis one
measures were part of a larger rescue and restructuring
another. That arrangement meant that there was also a
operation.
clear distinction between the activities of ABN AMRO N
and ABN AMRO Z. It meant for instance that ABN
AMRO N had its own corporate governance structure
and its own reporting. The Dutch State also drew the
(184) The Dutch State acknowledged that the State aid rules
Commission’s attention to the fact that ABN AMRO N
imply that the MEIP does not apply when several inter
had separate legal status as of 6 February 2010 ( 76 ).
connected capital injections are made in a short time
period. Nevertheless it argued that this analysis did not
hold true for FBN and ABN AMRO N as the integrated
transactions of 3 October 2008 – in its view – did not
contain State aid measures and, in addition, the follow-
up measures were not connected to the initial trans
(189) The Dutch State also provided evidence that the ABN
action.
AMRO Z capital shortfall already existed at the time of
the acquisition of 3 October 2008. The opening balance
of ABN AMRO Z was already a negative EUR 7,4 billion
on 3 October 2008 and the share of Fortis SA/NV
(185) The Dutch State argued that the Commission should take
therein was approximately EUR 2,5
billion. With
into account the very specific circumstances under which
respect to the sources of the capital shortfall, the
the Dutch State was obliged to buy FBN. The Dutch State
Dutch State admitted that there had been a transfer of
also pointed out that the sale of New HBU had been very
EUR 1 billion worth of Unicredito shares from ABN
burdensome for the Dutch State and for ABN AMRO N
AMRO Z to the operational tracking shares (including
with a negative capital impact of EUR 470 million.
approximately EUR 300 million to ABN AMRO N), but
it provided information showing that the Unicredito
share transfer took place in February 2008, well before
the Dutch State intervened. Therefore the Unicredito
(186) The Dutch State claimed to have based all its measures
share transfer could not be considered as State aid.
on the principles set forward in the Banking Communi
cation ( 74 ) and the Communication from the Commission
— The recapitalisation of financial institutions in the
current financial crisis: limitation of aid to the
minimum necessary and safeguards against undue
distortions of competition
( 75 ) (the ‘Recapitalisation
Communication’). In general, the Dutch State argued
(190) With respect to the costs borne by ABN AMRO Z related
that its measures were well-targeted, proportionate to
to head office functions, the Dutch State underlined that
the challenges faced and designed so as to minimise
those costs decreased dramatically after the acquisition of
negative spill-over effects to competitors.
ABN AMRO Holding by the consortium members
described in recital 33. Since the consortium members
( 74 ) OJ C 270, 25.10.2008, p. 8.
( 75 ) OJ C 10, 15.1.2009, p. 2.
( 76 ) 1 day after the Decision of 5 February 2010.

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had no interest in maintaining a large integrated head
call the CRI in January 2011, when the transition to
office, it was logical to keep those costs as low as
Basel II requirements was expected to result in a
possible. Figures provided by the Dutch State showed
reduction of the freed up capital.
that group function costs borne by ABN AMRO Z
were EUR [0 - 0,5] billion in 2008 and EUR [0 - 0,2]
billion in 2009, which the Dutch State considered to be
negligible. The Dutch State also underlined that it
incurred the obligation to absorb those costs when it
(194) The Dutch State explained that the separation costs
replaced Fortis SA/NV as a party to the CSA, following
(namely Measures B2 and B3) were the result of the
the acquisition of FBN (including ABN AMRO N) on
CSA, to which the Dutch State was de facto a party
3 October 2008.
since 3 October 2008. According to the terms of the
CSA, the State –as opposed to ABN AMRO N – was
obliged to split ABN AMRO Holding in three parts.
The Dutch State denied that those costs provided ABN
AMRO N with a benefit and it also explained that it paid
(191) Should the Commission consider Measure A as State aid,
for the separation costs as it was the State’s contractual
the Dutch State argued that the Impaired Asset
obligation to implement the separation.
Communication ( 77 ) should not apply. According to the
Dutch State, there was no uncertainty on the valuation of
the protected assets, which therefore could not be
considered ‘impaired’ in the sense used in the Communi
cation. Should the Commission not share its point of
(195) With respect to the prudential margin of EUR
view, the Dutch government contended that ABN
500 million – also categorised under separation costs -,
AMRO N’s CDS still complied with the general principles
the Dutch State argued it was common banking practice.
of that Communication. Moreover, it argued that the
Banks cannot operate with only the minimum required
credit protection instrument was necessary and propor
capital but need an additional comfort margin.
tional, while keeping competition distortions to the
Otherwise, should banks face – even a small – setback,
minimum.
they would immediately run into financial trouble. The
Dutch State indicated, however, that its contribution to
the prudential margin should be temporary and that, in
the longer-term, ABN AMRO N should generate the
prudential margin itself without any help by the Dutch
State.
(192) The Dutch State asserted that the remuneration of the
CRI – a 10 % return of the freed up capital – was
sufficiently high. It also provided evidence that the first
loss tranche of 20 basis points was substantially higher
than the expected loss. The Dutch State contended that
historical losses (namely [0 - 15] basis points) and 2010
(196) With respect to Measure B4, the Dutch State argued that
projected losses (namely [0 - 30] basis points) on the
the measure did not constitute State aid. The Dutch State
mortgage portfolio of ABN AMRO N provided a good
argued that the decision to merge both banks was
forecast for a range of future expected losses. Also
already taken and partly implemented when it acquired
market information from rating reports (
FBN. The Dutch State supported its claim by referring to

78 ) confirmed
that the first tranche loss exceeded expected losses. The
the fact that ABN AMRO Asset Management had already
Dutch State also referred to a document of the
been separated and integrated within Fortis SA/NV at the
investment bank […], which simulated how the Dutch
time of the integrated transactions of 3 October 2008.
State cashflows could evolve under different stress
The Dutch State also underlined that the Commission
scenarios.
had obliged it to implement a merger remedy to
resolve outstanding concentration problems and that it
inherited from Fortis SA/NV the New HBU Merger
Remedy. The Dutch State also indicated that ultimately
ABN AMRO N’s financial means would not increase and
therefore it defended the position that Measure B4 did
(193) The Dutch State also believed that the CRI contained
not constitute State aid.
sufficient exit incentives. The Dutch State drew the
Commission’s attention to the calls included in the CRI
and to the fact that the CRI would become rather unat
tractive once ABN AMRO Group was allowed to operate
under Basel II requirements. Against that background, the
Dutch State believed that ABN AMRO N would probably
(197) The Dutch State indicated that the State funds granted to
finance integration costs (Measure B5) should be seen as
a rational investment, leading to healthy returns in the
( 77 ) OJ C 72, 26.3.2009, p. 1.
form of synergies. The Dutch government estimated
( 78 ) The Fitch report of 2 February 2010 on Dutch mortgages indicates
those synergies at around EUR 1,1 billion a year (pre-
that ‘Mortgage portfolios in the Netherlands have experienced
tax), while the upfront integration costs amount to
negligible losses and low delinquency levels compared with most
other European countries. At present the Netherlands has one of
EUR 1,2 billion (after-tax). According to the Dutch
the lowest foreclosure and loss rates in Europe’.
State, the total NPV of the merger (taking into

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account synergies, integration costs and the cost of the
(203) The Dutch State also commented on the Commission’s
Merger Remedy) should amount to a positive EUR
suspicion that the preferred shareholders of FBN ( 80 ) had
2,88 billion ( 79 ).
not sufficiently contributed in terms of burden-sharing.
The Dutch State explained that the investors in preferred
shares had not received dividends in 2008 (neither in
cash nor in accrual) and that preferred shares were
(198) According to the Dutch State, the conversion of Tier 2
trading below par. The Dutch State added that FBN’s
into Tier 1 capital (Measure C) did not selectively
ability to pay or reserve fixed dividends in the future
advantage FBN. The Dutch State claimed that the
depended on FBN having sufficient IFRS profits. The
conversion was in the Dutch State’s interest as it was
Dutch State noted that the dividend clause governing
able to convert loans with an average coupon of
the FBN preferred shares included so-called dividend
2,976 % into equity that, in its view, had an attractive
stopper/pusher language ( 81 ) and that the uncertainty
remuneration. In that regard, the Dutch State referred to
around the dividend policy of the ABN AMRO Group
ABN AMRO Group’s projected normalised 2012 RoE of
reduced the comfort that the investors in preferred shares
approximately […] % as put forward in the December
could derive from the dividend stopper/pusher language.
2009 Restructuring Plan.
(199) Should the Commission consider Measure C to be State
(204) As to whether capital would be repaid once the
aid, the Dutch State argued that the Commission should
(temporary) capital needs disappear, the Dutch State
not consider all loans waived as State aid. It explained
argued that it intended to use the dividend policy of
that the conversion could be broken down in a
ABN AMRO Group in such a way that ABN AMRO
repayment of Tier 2 capital at par in combination with
Group would not have any excess capital which could
a core Tier 1 capital injection (with no net cash impli
result in a distortion of competition ( 82 ).
cations). According to the Dutch State, it could not have
reasonably expected repayment of Tier 2 capital at par at
that time, since comparable instruments of other banks
were trading at a substantial discount to par reflecting
fragile market circumstances. The Dutch State indicated
that a discount of EUR [135 - 405] million was justified,
(205) Concerning distortions of competition, the Dutch State
based on comparable figures.
indicated that it did not agree with the Commission’s
position that ABN AMRO N and FBN were reinforced
in the Netherlands as a result of the merger nor that such
a development threatened to create undue distortions of
(200) The Dutch State indicated that the payment of EUR
competition. It rather believed the contrary and pointed
740 million (Measure D) was one of its obligations
in that regard to the fact that the separation of FBN and
stemming from the CSA. Moreover, the Dutch State
ABN AMRO N from their respective parent companies
underlined that there were only payments to the other
and the subsequent merger were very labour-intensive
consortium members and not to ABN AMRO N, so that
and implied that the management of FBN and ABN
there was also no State aid provided to ABN AMRO N.
AMRO N could dedicate less time to the day-to-day
commercial business and therefore it argued that the
separation and the subsequent merger had a negative
impact on the competitive position of FBN and ABN
AMRO N (or ABN AMRO Group post-merger).
(201) Regarding Measure E, the Dutch State argued that ABN
AMRO II did not benefit from the counter-indemnity
(described in recital 126), but that Measure E merely
put ABN AMRO II in a position to provide a counter-
indemnity to Deutsche Bank. It claimed that the counter-
indemnity could not be used by the bank for devel
5.3. Comments from the Dutch State on the
opment of new business and would therefore not give
comments of interested parties
rise to any distortion of competition.
5.3.1. Comments from the Dutch State on the complainant’s
letter of 6 May 2009
(206) In general, the Dutch State underlined that in its view the
(202) The Dutch State considered the counter-indemnity to be
measures in favour of FBN and ABN AMRO
in line with the Commission’s Recapitalisation Communi
cation. The Dutch State underlined that it had based its
pricing on the ECB Recapitalisation Recommendation.
( 80 ) See also recital 60.
( 81 ) A dividend pusher requires the issuer to pay its coupons on hybrids
if it has paid dividends on its ordinary shares, in line with the rank
( 79 ) According to the Dutch State, the NPV of the net synergies (namely
of subordination of its capital structure. A dividend stopper
gross synergies of EUR 1,1 billion per annum before taxes minus
prevents the issuer from paying dividends in any period in which
integration costs of EUR 1,2 billion after tax) will amount to EUR
the issuer omits payment to hybrid holders.
4 billion, while the Merger Remedy costs around 1,12 billion EUR.
( 82 ) Later, ABN AMRO Group and the Dutch State agreed that ABN
As a result, the Dutch State estimates that the merger would have a
AMRO Group’s dividend policy would be based on a dividend
positive NPV of approximately EUR 2,88 billion.
payout ratio of 40 % as described in recital 75.

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N did not meet the Union definition of State aid and
EUR 15,5 billion of State-guaranteed debt instruments.
therefore did not have distortive effects. It considered the
According to the Dutch State, the complainant’s alle
market behaviour of FBN and ABN AMRO N on the
gations were incorrect and premature. It indicated that
savings and deposit market to be in line with that of a
FBN just needed some time to set up treasury operations
rational market player protecting its commercial interests.
and issue State-guaranteed debt instruments. The Dutch
The Dutch State believed that the interest rates offered by
State also indicated that deposits and saving products are
FBN and ABN AMRO N were not distortive. As a result,
also important to establish a customer relationship and
it argued that there was no infringement of Union
have a different and broader purpose than that of other
competition law.
funding instruments. In that regard, the Dutch State
pointed out that a loss in a bank’s savings and deposits
market share could lead to market share losses in other
banking products.
(207) The Dutch State presented a number of comparative
tables with interest rates offered on specific deposit and
savings products. The Dutch State denied that FBN and
ABN AMRO N were consistently offering the highest
(210) The Dutch State also denied that the consumers and
interest rates, especially when compared to smaller
market participants perceived ABN AMRO N and FBN
Dutch banks like SNS, NIBC and DSB. The Dutch State
as safer banks than competitors. It referred to the ratings
also pointed out that interest rates on savings accounts
of FBN and ABN AMRO N at rating agencies, which were
were already high in the Netherlands before the financial
below the AAA-rating of Rabobank for example. Its
crisis, partly due to the behaviour of smaller banks with
relative CDS-spreads told a similar story. The Dutch
an aggressive pricing policy. The Dutch State believed
State also believed that the State-ownership did not
that during the financial crisis banks tried to protect
make ABN AMRO N or FBN more secure in the eyes
their savings franchises by offering relatively high
of consumers and market participants. In that regard, it
interest rates on savings products for customers.
pointed out that the many ad-hoc State interventions had
shown that the Dutch State would, if possible, intervene
with respect to any privately-owned bank. Consequently,
it believed that de facto there was no perceived difference
between the security offered by Dutch privately-owned
banks compared with that of Dutch State-owned banks.
(208) The Dutch State also commented on the pricing strategy
of MoneYou, the Internet brand of ABN AMRO N, which
was introduced in the market in September 2008. The
Dutch State argued that MoneYou is a dedicated Internet
product, which differed considerably from more tradi
tional products in terms of cost base and service level.
(211) To calculate whether interest rates offered on savings
The Dutch State indicated that MoneYou had to build up
products were loss-making, the Dutch State argued that
brand recognition in the first 6 months of its existence
they should not be compared with EURIBOR rates but
and therefore had to offer interest rates which were
rather with rates resulting from the so-called ‘replicating
mostly slightly lower or equal than those offered by
portfolio methodology’ ( 85 ). Using that methodology, the
similar Internet-banking marketplayers ( 83 ). From the
Dutch State acknowledged that for some products, there
second quarter of 2009 onwards, the interest rates
was a temporary negative margin. However, it argued
offered by MoneYou were lowered and MoneYou posi
that it was rational market behaviour and in line with
tioned itself within the so-called mid-tier segment ( 84 ).
market behaviour of (privately-owned) competitors at
With respect to MoneYou, the Dutch State added that
that precise point in time.
it only raised limited volumes of funds (namely EUR [0 -
5] billion), representing roughly [0 - 5] % of total volume
on the Dutch savings market. The Dutch State added that
ex-Van Lanschot customers only represented a small part
of MoneYou’s business (namely [0 - 5 000] accounts or
[0 - 5] % of MoneYou’s accounts).
5.3.2. Comments from the Dutch State on the complainant’s
arguments of 21 and 28 August 2009
(212) The Dutch argued that its earlier comments summarized
in recitals 206 to 211 concerning the complainant were
still valid.
(209) The Dutch State also denied that ABN AMRO N and FBN
were solely relying on the Dutch savings market to fund
( 85 ) The replicating portfolio methodology is based upon a model
themselves. The Dutch State provided new information
reflecting how long deposits and savings are on average kept at
showing that ABN AMRO N had issued a covered bond
the bank. The methodology is based on the historical pattern of
of EUR 2 billion on 6 July 2009 and that FBN had issued
deposits and withdrawals and is continuously updated. Application
of that methodology assumes short-term deposits and savings to be
invested by the bank in a virtual portfolio consisting of short-term
( 83 ) The Dutch State and ABN AMRO N include in their peer list of
deposits but also longer-term investments. The method results in a
1 September 2008: […].
savings’ margin which is not solely dependant on EURIBOR rates
( 84 ) The Dutch State and ABN AMRO N refer in that regard to SNS,
but also on yields of longer-term investments on a longer-term
DSB and insurers such as Aegon.
basis.

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(213) In addition, the Dutch State noted that the complainant’s
(217) The first criterion is met for Measures (Y1) to (E) in Table
claim that ABN AMRO N and FBN market share had
4 in recital 128 as all those Measures are directly
increased was based on flawed statistics. With respect
financed from the Dutch State’s resources.
to the alleged EUR 21 billion increase in deposits
collected by ABN AMRO N, the Dutch State argued
that only EUR 5,1 billion was due to Dutch retail
savings with the rest mainly due to corporate customer
savings and foreign deposits. The Dutch State also
(218) Whether a measure constitutes a selective advantage to
provided data, showing that a large part of FBN’s
FBN, ABN AMRO N or ABN AMRO Group post-merger
volume increase of deposits and savings stemmed from
(the second criterion) is analysed in the recitals 220 to
corporate banking as opposed to retail and private
278, examining each measure separately.
banking.
(219) If a selective advantage exists in this case, the third and
(214) The Dutch State observed that that Dutch customers had
fourth criteria would also be fulfilled. All the measures
invested more into their savings because of the uncertain
distort or threaten to distort competition as they place
macroeconomic environment. It pointed to data of the
FBN, ABN AMRO N or ABN AMRO Group after the
Central Bureau of Statistics (‘CBS’) which indicated that
merger in a beneficial position vis-à-vis other
savings increased by 7,7 % year-on-year in the first half
competing banks (third criterion). Moreover, the
of 2009. ABN AMRO N’s customer savings increased by
measures also have an impact on trade between
7,5 % year-on-year, which indicated that the ABN AMRO
Member States. FBN, ABN AMRO N and ABN AMRO
N’s market share rather declined. FBN also presented
Group post-merger are internationally-oriented banks
evidence showing that its customer savings had evoled
with activities outside the Netherlands while also
in line with the market.
competing in their home market with subsidiaries of
foreign banks (fourth criterion).
5.3.3. Comments from the Dutch State on the comments of
ABN AMRO Bank
6.1.1. Measures Y1 and Y2 of 3 October 2008
(215) The Dutch State confirmed that it had not provided a
liquidity facility to ABN AMRO N, thereby broadly
(220) It is appropriate to recall that this Decision assesses only
confirming ABN AMRO Bank’s arguments.
potential aid to FBN, ABN AMRO N or ABN AMRO
Group post-merger. Potential aid to Fortis Bank SA/NV
arising out of Measures Y1 and Y2 was assessed in the
Decision of 3 December 2008.
6. ASSESSMENT
6.1. Existence of aid
(216) Article 107(1) of the Treaty provides that any aid granted
(221) As indicated in recital 52 of the Decision of 3 December
by a Member State or through State resources in any
2008 ( 86 ) and in the initial aid assessment of those
form whatsoever which distorts or threatens to distort
measures in the Decision of 8 April 2009, the
competition by favouring certain undertakings or the
measures taken on 3 October 2008 (namely Measures
production of certain goods shall, insofar as it affects
X, Y1 and Y2) are inextricably linked. The Dutch State
trade between Member States, be incompatible with the
separated FBN and ABN AMRO N from their liquidity-
internal market. It follows that a State measure qualifies
constrained parent by means of the acquisition of FBN
as State aid if it meets the following four (cumulative)
but, in order to fully insulate FBN from its parent’s
criteria:
liquidity problems, the Dutch State also had to assume
the role of funding provider of FBN. That goal translated
into Measures Y1 and Y2. In addition, on 3 October
2008 the Dutch State took over Fortis SA/NV’s CSA-
— State resources;
obligations.
— selective advantage;
(222) As indicated in recital 50 of the Decision of 3 December
2008, the Commission cannot accept that the MEIP is
satisfied for the integrated transactions of 3 October
2008 by which the Dutch State acquired FBN (including
— distortive impact on competition; and
ABN AMRO N) for EUR 12,8 billion and also provided
FBN with a very large amount of funding. Given the then
prevailing market circumstances, no buyer would have
— impact on trade between Member States.
( 86 ) OJ C 80, 3.4.2009, p 8.

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been able and willing to offer as much to save FBN ( 87 ).
in the Decision of 3 December 2008, which considered
Moreover, additional information submitted by the Dutch
those transactions to be State aid to Fortis Bank SA/NV).
State confirmed that, on 3 October 2008, the Dutch
State also agreed to indemnify Fortis SA/NV for its
CSA-obligations. That CSA-agreement would have
rendered the integrated transactions of 3 October 2008
even less acceptable to a market economy investor.
Without appropriate due diligence, no investor would
(226) As regards the existence of an advantage, the measures of
have taken over the obligations of Fortis SA/NV under
3 October 2008 taken together allowed the separation of
the CSA, which resulted in major liabilities at a later
FBN and ABN AMRO N from Fortis SA/NV and therefore
stage (of which the Dutch State was already partially
conferred an important selective advantage on FBN,
aware on 3 October 2008).
which was highly integrated in Fortis Bank SA/NV and
in particular relied heavily on the latter for funding. In
the December 2009 Restructuring Plan (see also recital
78), the Dutch State admitted that, had it not intervened,
FBN would have been dragged down by Fortis SA/NV.
Without the State aid measures, FBN would have
remained exposed to the liabilities of Fortis SA/NV,
(223) For the Dutch State, the integrated transactions of
3 October 2008 were necessary to avoid large negative
which was on the verge of bankruptcy, and that
spill-over effects into the Dutch banking system and
exposure would have substantially hindered FBN’s
economy (
activities. By ring-fencing its activities from Fortis

88 ). A market economy investor typically
does not take such spill-over effects into account.
SA/NV, FBN was able to avoid to a large extent the

problems and costs typical of a (financial) company in
distress (for example higher funding costs, worse
payment conditions from suppliers and counterparties,
higher personnel costs to retain staff, reduction of
activities and risk-weighted assets to preserve capital) ( 89 ).
Although ABN AMRO N remained on an operational
(224) The willingness to avoid a serious disruption of the
level a separate company, the Dutch State feared
Dutch banking system and economy also explains why
contamination resulting from the fact that markets
the Dutch State took its decisions so rapidly. A market
might associate ABN AMRO N with its future owner
economy investor would have taken much more time to
Fortis SA/NV.
evaluate the potential need for additional capital
injections and would also have investigated the financials
of the companies in more detail. As a result, a market
economy investor – with sufficient time to carry out a
proper due diligence – would have had a better view on
follow-up investments and would have taken that
(227) Measure Y1 – an important component of the integrated
information into account in its valuation. The Dutch
transactions of 3 October 2008 – also provided a major
State having to act swiftly to preserve financial stability
advantage to FBN, especially given the size of the trans
in the Netherlands, could not behave like a market
action and the then prevailing market circumstances.
economy investor and take more time to consider the
integrated transactions of 3 October 2008 and the CSA-
related obligations in further depth.
(228) The large liquidity facility of EUR 45 billion ( 90 ) was
provided when wholesale markets were virtually closed,
particularly for large amounts and for companies with a
relatively high loan-to-deposit ratio such as FBN. The fact
(225) Therefore, the Commission confirms its assessment that
the integrated transactions of 3 October 2008 were not
that such a high amount of liquidity was not readily
in line with the MEIP (that conclusion was already made
available on the market is confirmed by the fact that
FBN needed several quarters to replace the short-term
liquidity facility by other sources of funding. In the
( 87 ) In its Communication to the Dutch Parliament of 6 October 2008,
end, FBN repaid all the short-term funding from
the Dutch State indicated itself that it had evaluated other options
such as a sale of FBN and/or ABN AMRO N – or parts of those
companies – to a solid buyer, but it had concluded that given the
( 89 ) Also FBN indicated in its marketing material for debt investors, that
market circumstances and the short notice, these options were not
the State ownership was a favourable element ‘providing confidence
feasible and not sufficient to preserve stability of FBN and ABN
to depositors and creditors’; Roadshow presentation April 2009
AMRO N.
page 3, penultimate bullet point; Roadshow presentation June
See full text on: http://www.rijksoverheid.nl/onderwerpen/
2009 (Paris), page 3, penultimate bullet point; Roadshow presen
kredietcrisis/documenten-en-publicaties/kamerstukken/2009/03/10/
tation July 2009 (Madrid), page 3, penultimate bullet point (all
staatsdeelnemingen-fortis-en-abn-amro.html.
publicly available on the company’s website: http://www.
( 88 ) That evaluation is confirmed by comments of the Dutch Minister of
abnAMRO.com/en/investor-relations/latest-presentations/index.
Finance who has consistently argued that the Dutch State primarily
html).
intervened for financial stability reasons. He added that it was not
( 90 ) For comparison, at the end of 2008 FBN’s total assets amounted to
the first goal of the Dutch State to earn its investment back, but
EUR 185 billion, so the liquidity facility represented roughly 25 %
only its ambition.
of the total balance sheet.

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the Dutch State in June 2009, 9 months after the
Conclusion
liquidity aid was granted. The refinancing was partly
done via State-guaranteed debt issues ( 91 ).
(234) Thus, the integrated transactions of 3 October 2008 are
not in line with the MEIP and provide FBN with a
selective advantage. Those measures allowed FBN to
stay on the market and to pursue its activities, without
further contamination from the problems of its parent
company. FBN also received a very large amount of
(229) Therefore, it should be concluded that Measure Y1
funding aid which was not available on the market on
constitutes State aid as it provided FBN with an
such a short notice. Measures Y1 and Y2 therefore do
advantage in the form of funding which it could not
constitute State aid while, as laid down in recital 32 of
have found on the market in the then prevailing
the Decision of 8 April 2009, Measure X as such does
market circumstances.
not constitute State aid to FBN but is part of a wider
transaction – the separation of FBN from Fortis Bank
SA/NV – which involved State aid to FBN.
(230) With respect to Measure Y2, the novation of long-term
loans made by Fortis Bank SA/NV, the Commission
6.1.2. Applicability of the MEIP for the measures imple
considers that measure provides a selective advantage
mented after the initial aid of 3 October 2008
to FBN. The information submitted by the Dutch State
shows that Fortis Bank SA/NV was entitled to immediate
(235) The Dutch State has taken a large number of measures in
repayment of the fixed-rate long-term loans (with a
favour of FBN and ABN AMRO N, spread out over a
nominal value of EUR 7,9 billion) because of the
period of roughly 18 months. The Dutch State claims
ownership change at the level of FBN. Thanks to
that that the MEIP-test should be applied to each of those
Measure Y2, FBN did not have to find new funding on
measures individually (and especially to the merger-
the market in order to repay those long-term loans. It
related Measures B4 and B5). However, based on the
could continue to benefit from the existing loans at pre-
chronology of the measures (I), the common purpose
crisis rates.
of the measures (II) and the situation of the companies
at the time of each measure (III), the Commission
concludes that they are not sufficiently distinct to be
judged against the MEIP independently. The Commission
considers all measures to be part of one lengthy restruc
turing process ( 92 ), ( 93 ).
(231) By accepting the novation, the Dutch State provided FBN
with long-term debt at pre-crisis interest rates. A market
economy investor would not have provided these loans
at pre-crisis interest rates but would have negotiated
interest rates which would better reflect the then
(236) The chronology of measures (I) described earlier in
prevailing market circumstances, especially since it
section 2.1 and section 2.4 in this Decision shows that
concerned loans for a sizeable amount.
all measures are interrelated and were taken in a short
period of time.
(232) Therefore, it should be concluded that Measure Y2
(237) In addition, the merger-related measures are clearly
constitutes State aid to FBN as it provided a selective
linked to the preceding interventions. When the Dutch
advantage to FBN in the form of a loan at pre-crisis
State decided on 21 November 2008 – slightly more
rates. The Dutch State did not try to bring the interest
than 6 weeks after the rescue intervention of
rates of the redeemable loans in line with post-crisis
3 October 2008 – to merge FBN and ABN AMRO N,
interest rates, thereby not behaving like a market
it could only do so because it had just rescued the two
economy investor.
companies from bankruptcy. In other words, in a
counterfactual scenario without the 3 October 2008
intervention, implementing the merger would not have
been an option as either the two companies would no
longer have existed or they would have been present
only in a substantially reduced form which would have
(233) The Commission has received sufficient information to
lead to a much smaller and less attractive merged entity,
conclude that ABN AMRO N did not receive funding
which the Dutch State also admits in its December 2009
through Measures Y1 and Y2. It therefore did not draw
Restructuring Plan (see recital 78).
an advantage from those measures.
( 92 ) Case T-11/95 BP Chemicals Ltd v Commission [1998] ECR II-3235.
( 91 ) FBN issued State-guaranteed instruments for a total amount of EUR
( 93 ) See also other banking cases such as Northern Rock, OJ L 112,
18,8 billion.
5.5.2010, p. 38 and Bank of Ireland, JO C 40, 9.2.2011, p. 9.

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(238) All the measures had the common objective (II) of fully
[…] confirm that FBN and ABN AMRO N still faced
restoring the viability of FBN and ABN AMRO N.
important viability-related issues after the 3 October
Immediately after the integrated transactions of
2008 integrated transactions ( 96 ).
3 October 2008, it was clear that the Dutch State had
merely stabilised the situation, with important oper
ational problems still awaiting resolution, notably
because of the separation of each entity from its
former parent.
(241) The Commission also observes that the Dutch State only
submitted a full-fledged restructuring plan once all the
measures were decided, which indicates that viability was
only then fully restored. During the procedure, the
Commission asked repeatedly for a detailed restructuring
plan (see for instance recital 137), which was indis
pensable to evaluate whether the viability of an aided
(239) Moreover, the merger was a measure needed to achieve
company has been fully restored.
that common goal, to fully restore viability. On a stand-
alone basis, FBN’s funding position was weak as it had a
relatively small retail franchise and depended to a large
extent on wholesale funding ( 94 ). ABN AMRO N had lost
important product competences and a large part of its
international network. Both companies faced operational
(242) The Dutch State submitted on 4 December 2009 the
December 2009 Restructuring Plan but that first plan
issues related to, for example IT, tax and risk
still lacked important elements mentioned in the Restruc
management and it was also uncertain whether they
turing Communication such as financial projections for a
had sufficient scale in all the businesses in which they
worst case scenario. The necessary completions arrived
were active. The Dutch State looked at a number of
on 23 March 2010. The Dutch State replied to earlier
alternatives and quickly decided that a merger in combi
requests made by the Commission for a restructuring
nation with additional capital increases was the best way
plan that the merger between FBN and ABN AMRO N
to fully restore viability. In a merger scenario, the
played a crucial role in the restructuring of those
deposit-rich retail activities of ABN AMRO N
companies. According to it the transition management
compensated for the weak funding position of FBN,
team of ABN AMRO Group needed time to prepare a
while FBN could bring larger size and international
plan and could not have a complete view on the future
branches to ABN AMRO N. Moreover, the combined
shape of the group before the merger was implemented.
entity was in a better position to tackle practical
problems and could also benefit from additional
economies of scale. The merger avoided having to
rebuild each entity separately.
6.1.3. Existence of an advantage and conclusion on the
existence of aid for the measures implemented after
integrated transactions of 3 October 2008
Measure of 24 December 2008 (Measure Z)
(240) With respect to the situation of the companies at the
(243) Measure Z was necessary to avoid FBN’s capital ratios
time of each measure (III), the Commission notes that
falling below the minimum regulatory capital
the viability of the companies was only fully restored
requirements.
once all the measures were implemented. They were
not viable at an intermediate stage, such as on
21 November 2008 when the decision to merge was
taken. In that regard, the Commission underlines that
at the end of December 2008, and so after the
decision to merge, FBN threatened to fall below the
(244) FBN’s capital problem was due to the high valuation of
minimum capital requirements of the DNB, because it
ABN AMRO N in its accounts. Simulations in […]’s due
had to take a write-down on ABN AMRO N. ABN
diligence report show that bringing the book value of
AMRO N was still in the books of FBN for a valuation
ABN AMRO N down to EUR 6,5 billion would lead
which was no longer realistic ( 95 ) after the valuation used
in Measure X and therefore a write-down had become
( 96 ) See for instance […] comments and also comments from the
inevitable. In order to sort out FBN’s capital problem, the
Minister of Finance in a letter to the Dutch Parliament dated
19 November 2009: ‘A standalone scenario would create little
Dutch State acquired ABN AMRO N from FBN for EUR
value. FBN has been able to show good profit figures in the past
6,5 billion and took further corrective capital action at
years but is considered to be too small to grow in the long term
the end of 2009 with the conversion of Tier 2 capital
and to remain competitive. ABN AMRO II has a sufficiently large
into Tier 1 capital (see recital 121 and footnote 52 of
market share in retail banking but misses commercial customers
this Decision). Declarations of the Dutch State, […] and
after the separation.’ (original text in Dutch, translated by the
Commission) The full text is available on the following Internet
link: http://www.rijksoverheid.nl/documenten-en-publicaties/
( 94 ) At the end of 2008, FBN’s loan-to-deposit ratio stood at 237 %.
kamerstukken/2009/11/20/ec-remedy-en-herkapitalisatie-abn-amro-
( 95 ) The participation was still accounted for some EUR 24 billion.
en-fortis-bank-nederland.html)

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to Tier 1 and total capital ratios of 3,8 % and 7,6 %
days of October 2008 ( 99 ). A market economy investor
respectively for FBN ( 97 ). In other words, there was a
would have used the ‘current market conditions’
risk that FBN would fall below the minimum regulatory
valuation as a starting point.
ratios requiring a minimum total capital ratio of 8 %
(with maximum half of it Tier 2). According to the
[…]-report, selling ABN AMRO N to the Dutch State
for a price of EUR 6,5 billion lifted the Tier 1 and
total capital ratios of FBN to respectively 7,8 % and
15,7 %, thereby sorting out FBN’s capital problem and
(248) A correction to the ‘current conditions’ market valuation
allowing the company to stay on the market.
would be needed in any event to take into account the
deterioration of the market conditions between
3 October 2008 (namely the date of the […] valuation
report) and the actual date when the acquisition of ABN
AMRO N by the Dutch State was decided upon. In that
period, the Euro Stoxx 50 index fell by 22,2 % while the
(245) The measure provided FBN with an advantage in the
Euro Stoxx Banks index fell by 45,3 %.
form of capital it could not have found on the
markets. The company was also unable to use internally
generated underlying profits to sort out (part of) the
problem, partly because it incurred losses of EUR
922 million in 2008 related to the Madoff fraud. Since
FBN ran the risk of falling below minimum capital
(249) The Dutch State’s argument that no correction is needed
requirements, the measure allowed the company to
given ABN AMRO N’s conservative risk profile (namely
comply with regulatory requirements and to pursue its
no toxic assets, good funding position, etc.) cannot be
activities.
accepted. The market decline was widespread, and
especially so amongst banking stocks, indicating that it
was not so much linked to stock-specifics but rather to
worsened economic and financial market conditions and
the associated increase in required risk premiums. Given
that background, it is necessary to adjust the 3 October
(246) The Commission has come to the conclusion that the
2008 ‘current market conditions’ valuation downwards
purchase of ABN AMRO N by the Dutch State did not
to obtain a reasonable estimate of the value of ABN
take place at market conditions for the reasons which
AMRO N on 14 December 2008. Applying the
follow.
observed percentage declines of the Euro Stoxx 50
index and the Euro Stoxx Banks index (22,2 % and
45,3 %) leads to a market price range for December
2008 of between EUR [2,2 - 3,6] billion and EUR
[3,1 - 5,1] billion (namely [4 - 6,5] billion EUR
decreased by 22,2 % and by 45,3 %) ( 100 ).
(247) A market economy investor
( 98 ) with an interest in
acquiring ABN AMRO N in December 2008 would
have used a market price, taking into account the
market conditions at that particular point in time. In
the […] report, the Dutch State had two valuations: a
‘through the cycle’ valuation of EUR [5 - 9] billion which
(250) The Commission can accept that, as claimed by the
assumed a normalisation of the markets and a ‘current
Dutch authorities, a correction should be made to take
market conditions’ valuation of EUR [4 - 6,5] billion
account of the fact that the Dutch State did not pay
which was based on the market conditions in the first
( 99 ) The current market conditions valuation was based on two
( 97 ) See […] due diligence report: Volume 2 Fortis Bank Netherlands
valuation approaches: a price/earnings peer analysis and a
page 44 and volume 5 on Subject Matter Memos page 65 and
discounted dividend approach. Both valuation approaches led to
following. Since FBN had booked ABN AMRO N under ‘equity
a valuation of EUR [4 - 6,5] billion (see page 7 of the […]
accounted participations’ prudential filter rules required that FBN
valuation report).
had to deduct the value of ABN AMRO N from its capital, 50 %
( 100 ) There is no reason whatsoever to increase the value of ABN
from its Tier 2 capital (if sufficient Tier 2 capital was available) and
AMRO N by the synergies of a potential merger which the
50 % (or more in case of insufficient Tier 2 capital) of its Tier 1
Dutch State already owned since the 3 October 2008 transaction.
capital. The write-down of ABN AMRO N had to be taken from
Measure Z removed ABN AMRO N from the balance sheet of FBN
available reserves thus reducing Tier 1 capital. By taking a write-
and there was no other potential investor who could realise the
down and immediately selling the stake, FBN had no longer to
same amount of synergies and would be willing to incorporate
apply the prudential filter to equity accounted stakes to its Tier 1
such synergies in its bid price either. Therefore, the Dutch State as
and Tier 2 capital.
a market economy investor trying to make acquisition at the
( 98 ) The Commission observes that no private investor made a bid for
lowest possible price would not include those synergies in its
ABN AMRO N. The Commission learnt that ING looked into the
bid price. Moreover, as a subsidiary argument, it should be
file but decided after careful consideration that a transaction would
underlined that the transaction mainly meant to keep FBN’s
not meet its financial requirements. The company underlined that
capital ratios above the minimum required levels. FBN’s capital
its ultimate responsibility is to its shareholders (which is obviously
position was indeed very vulnerable and the company was not
an important difference compared with the Dutch State, which also
in a position to pre-finance the merger itself. In a scenario
has to take into account the public interest). See press release of
without Measure Z, FBN would have run in financial difficulties
29 September 2008: http://www.ing.com/group/showdoc.
and it would have been impossible to realise the merger and the
jsp?docid=343126_EN&menopt=prm|pre.
associated synergies itself.

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the transaction in cash. As a result of Measure Y2, the
paragraphs to which the Dutch State refers say nothing
Dutch State owned debt issued by FBN and it then paid
on ABN AMRO N in isolation, but only refer to the full
FBN for ABN AMRO N by waiving part of that debt with
package of assets acquired by the Dutch State.
a nominal value of EUR 6,5 billion. Since debt issued by
other banks traded at the time at a discount to par, the
Commission can accept that the value of the debt
instruments waived was below par value. Based on
available market information, the Commission could
(254) Therefore, it should be concluded that Measure Z is a
accept a correction of [10 - 30] % or EUR [0,65 -
State aid measure in favour of FBN as it provides FBN
1,95] billion. That would imply an actual transaction
with capital enabling it to remain on the market. The
price of EUR [4,55 - 5,85] billion (EUR 6,5 billion
identified amount of aid is situated in a range between
minus EUR [0,65 - 1,95] billion), rather than EUR
EUR [0 - 2,75] billion and EUR [0,95 - 3,65] billion.
6,5 billion ( 101 ).
Measure A to cover EUR 1,7 billion of the capital shortfall of
(251) The aid amount in Measure Z would then be the
ABN AMRO Z
difference between the price paid and the market value
of ABN AMRO N. It would then be between EUR [0 -
(255) The Commission has concluded that it was the Dutch
2,75] billion (EUR [4,55 - 5,85] billion minus EUR [3,1 -
State’s responsibility – and not that of ABN AMRO N –
5,1] billion) and EUR [0,95 - 3,65]-billion (EUR [4,55 -
to cover the capital shortfall of ABN AMRO Z. Since
5,85] billion minus EUR [2,2 - 3,6] billion).
3 October 2008, the Dutch State was bound by the
terms of the CSA. Consequently, it was obliged to
implement the separation of ABN AMRO Holding
under the terms described in the CSA. Since the
financial supervisor only allowed the separation process
to start once the ABN AMRO Z capital problem was
(252) The Commission sees no basis to the claims of the Dutch
settled, the Dutch State and the other consortium
State that its EUR 6.5 billion valuation was convincingly
members had no other choice than to fill the capital
corroborated by the approval of the other consortium
gap of ABN AMRO Z.
members and by a report of […]. Overpaying for ABN
AMRO N did not affect the other consortium members,
which means that their approval of the sale was not an
approval of the valuation itself. There is also no indi
cation that the consortium members made a new
valuation themselves. The […] letter also does not
(256) ABN AMRO N merely acted as an intermediary in a
support the claim of the Dutch State. […] merely
construction to provide ABN AMRO Z, which has no
verified the methodology and the process, and its short
operational activities, with the necessary capital.
report cannot be seen as a credible valuation exercise.
The […] report also used as a basis the price paid by
the Dutch State for FBN and ABN AMRO N on
3 October 2008. As set out above, the transaction of
3 October 2008 is not a market-based transaction. A
(257) The Commission has not found evidence of indirect aid
transaction containing aid cannot be used to derive a
to ABN AMRO N. The clarifications provided by the
market price.
Dutch State confirmed that all meaningful financial trans
actions between ABN AMRO Z and ABN AMRO N took
place at market conditions or before the State inter
vention of 3 October 2008.
(253) The report of the experts working for the shareholders of
Fortis SA/NV also does not support the hypothesis that
the Dutch State did not overpay. The report is only a
secondary analysis of the valuations and valuation
(258) As mentioned in recital 110, the CRI was kept in place
methods that were used during the process and is not
after the separation of ABN AMRO II from ABN AMRO
a new valuation exercise. Moreover, the report should be
Bank to cover the prudential margin of EUR 500 million
seen in its context. The shareholders of Fortis SA/NV
and the integration costs of EUR 1,2 billion, while cash
were worried that they received a too low price for the
coming from MCS instruments was injected in ABN
assets acquired by the Dutch State and the report mainly
AMRO Z. Thus from the date of the separation of
addresses that claim i.e. that the Dutch State paid a too
ABN AMRO II from ABN AMRO Bank (namely
low price. Finally it should also be mentioned that the
6 February 2010) (until the end of the CRI in October
2010), the CRI constituted State aid to ABN AMRO II,
while the amount of EUR 1,7 billion of MCS the
( 101 ) Several banks have bought back their own subordinated debt at a
proceeds of which were transferred to ABN AMRO Z
significant discount during the current financial crisis (so-called
‘liabilities management’), thereby being able to create core Tier 1
ceased to be aid to ABN AMRO N/ABN AMRO II on
proportionate to the discount.
the same date. Those changes therefore do not change

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L 333/34
EN
Official Journal of the European Union
15.12.2011
the quantity of aid but only the instruments by which
position and it would have been obliged for instance to
the aid was provided and its duration. That change of
reduce its RWA to free up capital. In other words, the
form does not raise any issues which need to be
prudential margin is a selective advantage which
considered in the remainder of this Decision.
improved ABN AMRO N’s competitive position when
compared to a scenario in which the measure had not
been implemented.
(259) Therefore, it should be concluded that Measure A does
not constitute State aid. Under the CSA, it was a
contractual obligation of the Dutch State as a successor
(265) Therefore, it should be concluded that, while the general
of Fortis SA/NV to resolve ABN AMRO Z’s capital
separation costs do not constitute State aid, the
shortages. Therefore, the measure does not represent a
prudential margin of EUR 500 million (namely part of
selective advantage to ABN AMRO N and does not
Measure B3) does. It provides ABN AMRO N with extra
relieve it of costs it would normally have borne.
capital and represents a selective advantage.
Measure B1 providing EUR 500 million worth of ABN
Measure B4: Recapitalisation to cover capital shortage related
AMRO Z’s capital shortage
to divestment of New HBU and Measure B5: Recapitalisation

to cover integration costs
(260) Since the CRI did not suffice to cover ABN AMRO Z’s
capital shortfall, the Dutch State had to inject extra
(266) The Commission observes that there was no contractual
capital via a MCS. The rationale developed in respect of
or economic obligation to merge FBN and ABN AMRO
Measure A also applies for Measure B1.
N when the Dutch State acquired those companies. The

asset management division of ABN AMRO N had indeed
been integrated within Fortis Bank SA/NV, but that
division is not a must-have business for banks as many
other banks source their asset management products
(261) Therefore, it should be concluded that Measure B1 does
not constitute State aid, as funding ABN AMRO Z’s
from specialised external providers. It was the Dutch
capital shortage was an obligation of the Dutch State
State itself which decided on 21 November 2008 to
under the CSA and does not selectively advantage ABN
merge ABN AMRO N and FBN as it preferred that
AMRO N.
option over other restructuring alternatives such as a
standalone strategy for the two banks, the rapid sale of
one or both of the companies or the rapid sale of major
subsidiaries.
Measures B2 and B3: Recapitalisation to finance separation
costs
(262) The full amount of EUR 1,08 billion (namely Measures
(267) FBN and ABN AMRO N could not pay the upfront inte
B2 and B3 together) includes general separation costs of
gration costs of the merger themselves. The Commission
EUR 480 million, EUR 90 million of costs related to the
observes that the Dutch State has defended the merger in
set-up of a money market desk and a prudential buffer of
public saying that ‘the two banks together are stronger
EUR 500 million. It is important to distinguish between
than alone’ ( 102 ). The merger should indeed lead to major
the prudential buffer of EUR 500 million and the other
advantages in the form of synergies (estimated at EUR
separation costs of EUR 580 million.
1,1 billion pre-tax per year) and a stronger competitive

position (for example higher market shares, better
funding base etc.).
(263) With respect to the other separation costs, the
Commission accepts that the CSA obliged the Dutch
(268) To get the benefits of the merger, FBN and ABN AMRO
State to pursue the split of ABN AMRO Holding in
N had to incur a variety of costs (namely costs related to
three separate parts, following the CSA guidelines. In
the merger remedy, integration costs). The Dutch State
other words, the separation costs are the consequence
paid those costs via a recapitalisation (at a time when
of the contractual CSA-obligations of the Dutch State
capital was still available only with difficulty), while FBN
as successor of Fortis SA/NV. On a net basis, ABN
and ABN AMRO N got all the benefits. It therefore
AMRO N will not have a better capital position
provides a clear advantage to FBN and ABN AMRO N.
because of that measure, since the Dutch State injects
capital which is immediately consumed by separation
costs.
(


102 ) ‘The banks together are stronger than alone. The banks have
qualities which are very complementary. ABN AMRO has good
retail and SME services and Fortis has good internal merchant
qualities. Because Fortis SA/NV disappeared, both banks had to
do new investments. These investments can better be done once
(264) That reasoning does not however hold good for the
than twice.’ (original text in Dutch, translation by Commission)
prudential margin of EUR 500 million as there was no
(source: ‘Vragen over de ingeslagen richting voor de bedrijven en
contractual obligation of the State to provide it. If the
de besluitvorming daartoe, het beloningsbeleid en de toekomstige
rol van de Staat in deze bedrijven’, press release explaining the
Dutch State had not provided that assistance, ABN
decision of the Dutch State of 21 November 2008 to merge
AMRO N would have been in a worse financial
FBN and ABN AMRO N).

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EN
15.12.2011 Official
Journal
of
the
European
Union L
333/35
(269) According to the Dutch State, the merger has a positive
1,215] billion as it provides FBN with an advantage in
net present value ( 103 ). However, as is already developed
the form of extra capital.
extensively in recitals 235 to 242, the Measures B4 and
B5 follow other State aid measures and are part of a
larger restructuring plan, so that the MEIP does not
apply.
Measure D: Cash Payments to other consortium members
(275) With respect to the payments to the other consortium
members, the Commission has concluded that the
(270) Therefore, it should be concluded that Measures B4 and
payments are indeed part of CSA-related obligations.
B5 do constitute State aid of respectively EUR
The consortium members had anticipated that some
300 million and EUR 1,2 billion. They provide FBN
unexpected issues would show up during the separation
and ABN AMRO N with a selective advantage by
process and the CSA describes the procedures to be used
providing them capital.
to settle those issues. The Commission has found no
evidence that the payments of the Dutch State to the
other consortium members led to an extra transfer of
net assets to ABN AMRO N or to any other advantage
for the company.
Measure C: recapitalisation of FBN
(271) Measure C provides FBN with capital, which allowed it to
comply with the minimum regulatory requirements of
the financial supervisor. If the Dutch State had not
(276) Therefore, it should be concluded that Measure D does
converted its Tier 2 capital into Tier 1 capital, FBN
not constitute State aid as Measure D was a CSA-obli
would have had to discontinue its operations or would
gation of the State and not of ABN AMRO N. The
have been obliged to look for alternative solutions, such
Measure implied no selective advantage to ABN
as reducing its RWA to free up Tier 1 capital. Thanks to
AMRO N.
the measure, FBN ended up with more capital and in a
stronger competitive position than in a ‘no aid’ scenario.
Measure E: State guarantee on debt to sort out cross liabilities
(277) The Commission has come to the conclusion that the
(272) The Dutch State converted Tier 2 debt instruments with
cross liabilities are to a large extent linked to the specific
a nominal value of EUR 1,35 billion into an equivalent
separation context of ABN AMRO N from its parent
amount of Tier 1 capital. That conversion leads to the
company ABN AMRO Bank (now RBS NV). Under
same cash flows as a scenario in which FBN had repur
Dutch company law, Deutsche Bank as the purchaser
chased the Tier 2 instruments owned by the State at par,
of New HBU remains liable for debts of ABN AMRO
followed by capital increase of the same amount. By
Bank if the latter does not meet its obligations.
analogy with recital 250, the Commission could accept
Therefore Deutsche Bank wants to be indemnified for
that the market value of the debt instruments waived by
the risk it runs towards ABN AMRO Bank. If ABN
the Dutch State was below par. Taking into account
AMRO N had not been separated from ABN AMRO
discounts of similar instruments of peer banks, a
Bank, those cross liabilities between New HBU and
discount of EUR [135 - 405] million (or [10 - 30] %)
ABN AMRO Bank would not have existed. The Dutch
is justified. In other words, FBN indirectly paid EUR [135
State therefore provides a guarantee on a cross liability
- 405] million too much to the Dutch State by implicitly
which exists exclusively because of the separation of ABN
buying back the instruments at par. The aid amount
AMRO N. The Dutch State does not provide a guarantee
would therefore be EUR [0,945 - 1,215] billion, rather
on the cross liability between New HBU and
than EUR 1,35 billion.
ABN AMRO N.
(273) The Dutch State’s claim that the measure is in line with
(278) Therefore, it should be concluded that it can be accepted
the MEIP cannot be accepted. The measure follows other
that Measure E does not constitute State aid as the
measures contaminated by State aid as explained in
separation of ABN AMRO N from ABN AMRO Bank
recitals 235 to 242, so that the MEIP does not apply.
is an obligation of the Dutch State under the CSA.
(274) Therefore, it should be concluded that Measure C
6.1.4. Quantification of the State aid
constitutes State aid for an amount of EUR [0,945 -
(279) ABN AMRO Group (or FBN and ABN AMRO N before
the merger) have benefitted from recapitalisation aid,
( 103 ) A report of the Dutch Court of Auditors makes some remarks on
which is situated in a range between EUR 4,2 billion
the calculations of the State (see weblink: http://www.rekenkamer.
and EUR 5,45 billion. That amount translates into a
nl/Actueel/Onderzoeksrapporten/Bronnen/2009/12/Verkoop_
onderdelen_ABN_AMRO_als_EC_remedy/Rapport_Verkoop_
range of 2,75 %-3,5 % when compared to ABN AMRO
onderdelen_ABN_AMRO_als_EC_remedy).
Group’s risk-weighted assets.

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L 333/36
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Official Journal of the European Union
15.12.2011
(280) The Commission observes that FBN also benefited from a very sizeable amount of liquidity aid, both
in relative and in absolute terms.
Table 5
State aid: Summary table of recapitalisation aid and liquidity aid
Recapitalisation aid
RWA of the
(all figures in EUR billion) State
aid
min State
aid
max
combined
entity FBN-
min % of RWA max
%
of
RWA
ABN AMRO N
Measure Z: Dutch State
[0 - 2,75] [0,95
-
3,65] 162,6
( 1 ) [0-1,7]
% [0,6
-
2,25]
%
acquires AA from FBN
Measure B3: Separation
0,5 0,5 149,5
( 2 ) 0,33
% 0,33
%
costs (prudential
margin)
Measure B4: Capital
0,3 0,3 149,5 0,20
% 0,20
%
shortage related to
HBU sale
Measure B5: Integration
1,2 1,2 149,5 0,80
% 0,80
%
costs
Measure C: Tier 2 ==> [0,945 - 1,215] [0,945
-
1,215] 149,5 [0,63
-
0,82]
% [0,63
-
0,82
%
Tier 1 conversion
Total recapitalisation
4,2 5,45 2,75
% 3,5
%
aid
Funding/Liquidity aid
Measure Y1: Short-term
45
liquidity facility
Measure Y2: Long-term
7,9
loans
Issue of new debt
18,8
instrument guaranteed
under the Dutch
guarantee scheme
Total funding/liquidity 71,7 (or 52,9
aid
when corrected
for double
counting) ( 3 )
( 1 ) Combined RWA of the two entities (namely FBN and ABN AMRO N) at the end of 2008.
( 2 ) Combined RWA of the two entities (namely FBN and ABN AMRO N) at the end of 2009.
( 3 ) The State-guaranteed debt was used to repay the funding drawn under the short-term liquidity facility of EUR 45 billion. In
other words, those two measures were not in place at the same time, but followed one after the other. The correction for
double-counting takes that into account.
6.2. Compatibility of the different aid measures
(281) Article 107(3)(b) of the Treaty empowers the Commission to declare aid compatible with the internal
market if it is intended ‘to remedy a serious disturbance in the economy of a Member State’. In
respect of the Dutch economy the risk for serious disturbance was confirmed in the Commission’s
various approvals of the measures undertaken by the Dutch authorities to combat the financial crisis
such as the Guarantee Scheme.

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European
Union L
333/37
(282) In this regard, it is however important to underline that
the then acute difficulties of its parent company.
the Court of First Instance has emphasised that
Therefore, the measures can be considered well-targeted
Article 107(3)(b) of the Treaty should be applied
in order to achieve the rescue of FBN.
restrictively ( 104 ), so that the economic disturbance
should affect the entire Member State and not just be
of a regional dimension. The Commission notes that
ABN AMRO N and FBN are leading Dutch banks with
a nation-wide branch network and top market positions
(287) The measures Y1 and Y2 should also be proportionate
in a wide range of segments on the Dutch retail and SME
and not unnecessarily distort competition. In that regard,
banking market. In the context of the various uncer
the Commission looks favourably at the pricing system
tainties surrounding the recovery from the global
developed by the Dutch State, which aimed to create a
financial and economic crisis, the discontinuity of those
level playing field with the Guarantee Scheme (see recital
banks would create a serious disturbance for the Dutch
169). In respect of guarantee schemes, the Commission
economy and therefore State aid from the Dutch
has consistently requested Member States to charge a
government can be assessed under Article 107(3)(b) of
premium of at least 50 basis points for guarantees
the Treaty.
longer than 3 months (and not longer than 12

months). The Commission found that the Dutch State
did not consistently ask EURIBOR + 50 basis points
for loans of longer than 3 months. Therefore, the
Commission can only declare Measure Y1 compatible
(283) The Commission set out more details on the compati
with the internal market on the condition that a
bility of specific measures in its Banking Communication,
corrective payment of EUR 18,2 million is made to
Recapitalisation Communication and Impaired Asset
ensure that loans with a maturity of more than 3
Communication, and on the required restructuring in
months are effectively remunerated at EURIBOR + 50
its Restructuring Communication.
basis points. The Commission notes positively that all
the liquidity facilities were repaid and ended in June
2009.
(284) The individual measures should be tested against the
relevant Communications of the Commission. The
capital relief instrument does not cover impaired assets
and is de facto a proxy for a recapitalisation measure. The
(288) With respect to Measure Y2, the Commission observes
general principles behind the Impaired Asset Communi
that since the Dutch State did not change the interest rate
cation should however hold also for the capital relief
and maturity of the loans, FBN benefitted from relatively
instrument to be in line with the internal market. In
cheap loans, which could distort competition. Therefore,
order to maintain a level playing field, the Commission
the Commission can only declare the measure
had to check whether the CRI was not used to shift
compatible with the Banking Communication if all the
expected losses on the portfolio to the State. Measure
conditions set out later in this Decision and more
A should also contain sufficient exit incentives and in
specifically the measures to limit distortions of
case the economic situation would deteriorate, ABN
competition are correctly implemented.
AMRO N still had to take some losses via a vertical
slice. The liquidity measures (Measures Y1 and Y2)
should be judged against the Banking Communication
and the recapitalisation measures (and more specifically
6.2.2. Compatibility of Measures Z, B3 (namely EUR
Measures Z, B4 and B5 as well as the prudential margin
500 million), B4 and B5 and C under the Recapitali
of EUR 500 million which was part of Measures B3 and
sation Communication
C) against the Recapitalisation Communication.
(289) The Commission has concluded that the measures
concerned were put in place to sort out a genuine
need and represented the minimum necessary to fully
6.2.1. Compatibility of Measures Y1 and Y2 under the
restore the viability of the companies concerned.
Banking Communication
(285) In order to comply with the Banking Communication,
Measures Y1 and Y2 should be well-targeted, propor
tionate and designed to avoid undue distortions of
(290) With respect to remuneration, the Commission observed
competition.
that the State was already the owner of 100 % of the
ordinary shares of FBN (and indirectly of 100 % of ABN
AMRO N). All those measures were indispensable to
preserve the value of that shareholding.
(286) The Commission repeats the conclusion of recital 51 of
the Decision of 8 April 2009 that the measure to cut all
the links between FBN and its liquidity-constrained
parent Fortis SA/NV was necessary to shelter FBN from
(291) ABN AMRO Group will realise a RoE of approximately
[…] % in 2013, which indicates that thanks to all the
( 104 ) See Joined Cases T-132/96 and T-143/96 Freistaat Sachsen and
State interventions, a viable and profitable entity has
Volkswagen AG v Commission [1999] ECR II-3663, paragraph 167.
been created.

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L 333/38
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Official Journal of the European Union
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(292) All the available valuations of ABN AMRO Group are
reports), historical data and recent evidence from ABN
well above the sum of the aid in measures Z, B3, B4,
AMRO N show that the yearly first loss tranche of 20
B5 and C (namely between EUR 4,2 billion and EUR
basis points should suffice to cover expected losses.
5,45 billion). Thus the State will receive an appropriate
remuneration on the aid granted to ABN AMRO N and
FBN ( 105 ).
(299) The remuneration that ABN AMRO N pays is not lower
than that requested in the Impaired Asset Communi
(293) In view of the above, the Commission has concluded that
cation and the Recapitalisation Communication. The
Measures Z, B3, B4, B5 and C are compatible with the
remuneration implies that ABN AMRO N will pay
Recapitalisation Communication if the conditions set out
10 % on the capital that is relieved by the transaction
later in this Decision are correctly implemented.
as a result of the reduction of RWA. That rate compares
favourably to the minimum rates set out in point (27) of
the Recapitalisation Communication. Given the relatively
6.2.3. Compatibility of the capital relief instrument with the
high remuneration, the vertical slice of 5 % and the claw-
principles set forward in the Impaired Asset Communi
back mechanisms can be considered to be in line with
cation
point (24) and footnote 15 of the Impaired Asset
Communication.
(294) The Commission acknowledges that the capital relief
instrument put in place by the Dutch State differs from
the traditional impaired asset measures evaluated in other
cases. While other impaired asset measures sought to
(300) Measure A also contains sufficient incentives to exit. The
relieve banks from impaired assets, the portfolio
call options described in recital 107 indicate that it is
protected by the CRI is a traditional Dutch mortgage
easy for ABN AMRO N (or now ABN AMRO Group) to
portfolio of which neither ABN AMRO N nor external
terminate the measure. Moreover, the pricing is such that
experts expected the performance to deteriorate to a
the measure becomes more expensive as time goes by.
significant extent.
The contractual terms imply that the pricing will not be
adjusted when ABN AMRO Group started to calculate its
capital requirements based on Basel II. That lack of
(295) The Commission observes that a traditional recapitali
adjustment will reduce the capital relief effect of the
sation at the level of ABN AMRO N was not
measure while the guarantee fee will not fall. Moreover,
opportune for the Dutch State, because it was not a
the first loss tranche is calculated as a percentage of the
separate legal entity at the relevant moment and the
initial portfolio value, so that the first loss tranche as a
Dutch State would not have been in a position to ring-
percentage of the outstanding portfolio (namely initial
fence its capital contribution, which could have had
portfolio corrected for, inter alia, repayments) will
negative consequences especially in distress scenarios.
gradually increase over time.
Moreover, private capital relief instruments were not
feasible given the size of the transaction and the
complexities related to the separation of ABN AMRO
Bank NV, the parent company of ABN AMRO N and
(301) In view of the characteristics of the CRI and in view of
ABN AMRO Z.
the December 2009 Restructuring Plan and the updated
November 2010 Restructuring Plan as described under
heading 2.3 of this Decision, the Commission considers
(296) Given that particular background, the Commission can
Measure A to be compatible with the general principles
accept that the CRI is an alternative to a traditional
of the Impaired Asset Measure and with the principles of
capital increase rather than a protection against toxic
the internal market as explained in recital 284.
assets and is therefore a necessary and appropriately
targeted measure to sort out the specific capital
problem of ABN AMRO Z.
(302) The fact that the CRI was called by ABN AMRO Group
soon after it implemented Basel II requirments confirms
(297) In spite of the fact that the measure is mainly a proxy
ex-post the analysis made in recitals 294 to 301.
measure for a recapitalisation, the measure should be
consistent with other capital relief schemes, thereby
protecting the internal market as explained in recital 284.
6.3. Assessment of the aid and of the December
2009 Restructuring Plan and the updated
(298) The Commission has concluded that the Dutch State has
November 2010 Restructuring Plan under the
provided sufficient evidence to show that the valuation
Restructuring Communication
was such that ABN AMRO N or its legal successor will
bear the expected losses. Market data (in particular rating
(303) Given the amount and the scope of the aid as described
in the preceding paragraphs and in particular the fact
that the recapitalisation aid exceeds 2 % of RWA, the
( 105 ) That evaluation does not entail that the State will also earn a
Commission believes that in-depth restructuring is
remuneration on the sums paid on 3 October 2008 to acquire
FBN and ABN AMRO N, which are not counted as aid in this
required, in line with point (4) of the Restructuring
Decision.
Communication.

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15.12.2011 Official
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of
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European
Union L
333/39
6.3.1. Viability
cation on the condition that ABN AMRO Group will
strive to realise the updated net interest revenues set
(304) A restructuring plan should demonstrate that the bank’s
out in the November 2010 Restructuring Plan. ABN
strategy is based on a coherent concept and show that
AMRO Group should report on its progress to the
the bank has restored long-term viability without reliance
Commission on a regular basis – at least every quarter.
on State support.
If ABN AMRO Group observes divergences compared
with those projections, it should immediately undertake
corrective action.
(305) As already concluded in the Decision of 5 February
2010, the business models of FBN and ABN AMRO N
did not rely on excessive risk taking and unsustainable
(308) A restructuring plan should contain projections with the
lending practices. The two entities were, however, left
necessary breakdown and restructuring also requires a
vulnerable and unequipped in certain core fields as a
withdrawal from activities which would remain struc
consequence of the separation from their respective
turally loss-making in the medium-term ( 106 ). In recital
parent groups. After its parent company was broken
120 of the Decision of 5 February 2010, the
up, ABN AMRO N had poor access to larger companies,
Commission doubted whether the viability issues of the
no longer had an international network and lacked a
Prime Fund Solutions division – which reported an
number of product and IT capabilities. FBN was also
important Madoff-related loss in 2008 – had been
heavily affected by the separation from its parent
adequately tackled. By selling PFS to Credit Suisse (see
company and its funding relied heavily on wholesale
also recital 74), that issue has been resolved. The detailed
markets. ABN AMRO Group’s December 2009 Restruc
projections at divisional level show that both in a base
turing Plan (and also the updated November 2010
case and a stress case all divisions contribute positively to
Restructuring Plan) shows that the integration of ABN
results. Therefore, the Commission can conclude that
AMRO N and FBN substantially reduces the weaknesses
there are no other divisions with structural profitability
of each of the individual entities. The combination of
problems and, in light of that conclusion, no further
FBN and ABN AMRO N helped to allay some of those
divestments are needed to improve the viability of the
concerns. The large retail and private banking franchise
company.
of ABN AMRO N was deposit-rich which created a better
funding profile for the integrated group, FBN sorted out
part of the international network problem of ABN
AMRO N and the two groups together were better able
to sort out, for example IT-related problems (namely they
did not each have to rebuild separately an IT-platform
6.3.2. Burden-sharing/Minimum necessary
and other support tools).
(309) A restructuring plan should clearly show that the aid has
remained limited to the minimum necessary. Costs
associated with the restructuring should not only be
borne by the State but to a maximum extent also by
those who invested in the bank. In other words, the
bank and its capital holders should contribute to the
(306) The financial projections show that at the end of the
restructuring as much as possible with their own
restructuring period the combined entity should be able
resources. Restructuring aid should be limited to
to cover its costs and realise an appropriate return on
covering costs which are necessary for the restoration
equity of approximately […] %. Even in a stress scenario,
of viability. Accordingly, an undertaking should not be
the company will continue to make profits, while its
endowed with public resources which could be used to
capital adequacy ratios remain above the minimum regu
finance market distorting activities not linked to the
latory thresholds. Thus the company’s capital buffer
restructuring process like, for example, acquisitions ( 107 ).
seems sufficiently high – after the repeated interventions
of the State – to weather future adverse circumstances
without having to return to the State again.
(310) The Restructuring Communication recalls that an
acquisition ban is necessary to keep the aid limited to
the minimum necessary. Point (23) of the Restructuring
Communication mentions explicitly that ‘an undertaking
(307) As the figures of the second half of 2008 and the first
should not be endowed with public resources which
half of 2009 showed, it is of crucial importance to realise
could be used to finance market-distorting activities
sufficiently high net interest revenues to create a fully
not linked to the restructuring process. For example,
viable company. Therefore, the December 2009 Restruc
turing Plan and the updated November 2010 Restruc
( 106 ) See also point (12) of the Restructuring Communication.
turing Plan can only be declared compatible with the
( 107 ) See Case T-17/03 Schmitz-Gotha Fahrzeugwerke GmbH v
viability requirements of the Restructuring Communi
Commission [2006] ECR II-1139.

---

L 333/40
EN
Official Journal of the European Union
15.12.2011
acquisitions of shares in other undertakings or new
(314) The Commission considers that, pursuant to point (26)
investments cannot be financed through State aid
of the Restructuring Communication, a hybrid coupon
unless this is essential for restoring an undertaking’s
ban and a hybrid call ban are unavoidable ( 109 ). In a
viability’.
restructuring context, measures which reduce the total
amount of own funds are not compatible with the
objective of burden-sharing and the minimum necessary
requirement.
(311) The Restructuring Communication also links an
acquisition ban to distortions of competition. In points
(39) and (40), the Communication explains that ‘State aid
must not be used to the detriment of competitors, which
do not enjoy similar public support’, and that ‘Banks
should not use State aid for the acquisition of
competing businesses. This condition should apply for
at least 3 years and may continue until the end of the
restructuring period, depending on the scope, size and
(315) As stated in point (26) of the Restructuring Communi
duration of the aid’.
cation, ‘banks should not use State aid to remunerate
own funds (equity and subordinated debt) when its
activities do not generate sufficient profits’. A detailed
assessment of ABN AMRO Group’s December 2009
Restructuring Plan (and the updated November 2010
Restructuring Plan) allows the Commission to conclude
that in approximately 2 years’ time, ABN AMRO Group
should have restored its viability as is illustrated by an
(312) In line with point (40) of the Restructuring Communi
acceptable RoE of approximately […] % in respectively
cation, the aid can only be declared compatible on the
2012 and 2013. Against that background, a hybrid
condition that ABN AMRO Group strictly applies an
coupon and hybrid call ban of 2 years ( 110 ) seems to
acquisition ban (
provide appropriate burden-sharing from the company’s

108 ) in the 3 years following the date
of the present Decision. The acquisition ban should be
capital holders ( 111 ). Thus the aid can only be declared
extended if the Dutch State continues to own more than
compatible on the condition of a two-year hybrid
50 % of ABN AMRO Group after 3 years. However, the
coupon and call ban as described in detail in Article 8
acquisition ban should not extend beyond 5 years. While
of the operational part of the Decision. That coupon and
part of the aid has already been redeemed, some
measures (in particular measures Z and C) cannot be
( 109 ) The Commission has accepted one exception. One of the hybrid
redeemed by the bank due to the form in which they
instruments of FBN, the so-called FCC-instrument (FCC instrument:
were granted (i.e. not in the form of a hybrid debt
EUR 87,5 million, 6,25 % non-cumulative non-voting perpetual
class A series I preference shares issued by Fortis Capital
instrument). The end of the State ownership is a proxy
Company Ltd), was issued at the time when Fortis SA/NV was
for estimating when the advantage derived from the aid
still one integrated group and the prospectus clearly stipulated
ends.
that coupons on the instruments were also triggered by
dividends paid by Fortis SA/NV (now renamed Ageas). When the
financial supervisor learnt about this situation, he concluded that
FBN had lost discretion over its coupon payments on the
instrument and that therefore the instrument would no longer
qualify as Tier 1. The financial supervisor argued that also
another Tier 1 instrument of ABN AMRO Group – whose
coupons after the merger were pushed by the FCC-instrument,
so that de facto ABN AMRO Group had lost discretion also
over the coupons of that instrument – would no longer qualify
(313) The Commission observes that the December 2009
as Tier 1.Based on viability arguments stemming from the
Restructuring Plan (completed with worst case financial
potential loss of Tier 1 capital and the specific separation
projections on 23 March 2010) indicated already that
context, the Commission can accept the FCC-instrument to be
ABN AMRO Group has become a viable entity that
exempted from the hybrid call ban.
should realise a decent return on equity and is even
( 110 ) For practical reasons, the Commission can accept the hybrid
coupon and call ban to start on 10 March 2011 (i.e. after the
expected to realise decent profits in worse economic
last forced coupon) to last up to and including 10 March 2013.
conditions. The updated November 2010 Restructuring
( 111 ) The Commission is aware of the fact that dividends paid by ABN
Plan confirmed this analysis. That return to viability does
AMRO Group to the State – its sole shareholder – could trigger
not hinge on acquisitions. An acquisition ban therefore
hybrid coupons. The Commission wants to avoid a situation in
does not go against the return to viability.
which ABN AMRO Group would pay marginal dividends to the
State in order to circumvent the hybrid coupon ban. The
Commission does not object to the payment of a sizeable
( 108 ) When banks are faced with bad loans in their loan portfolio, the
dividend to the State of at least EUR 100 million even if that
restructuring of those loans sometimes requires solutions such as
payment has certain consequences on hybrid coupons because a
converting debt into equity. Those situations are considered to be
large dividend hints at restored viability and also helps to keep
normal banking practice and are not covered by the acquisition
potential excess capital in check, which helps to limit undue
ban.
distortions of competition.

---

EN
15.12.2011 Official
Journal
of
the
European
Union L
333/41
call ban should also apply to the holders of FBNH
Paribas; the Dutch State acquired FBN (including ABN
Preferred Shares to remove the doubt expressed by the
AMRO N); and the Dutch State also acquired the
Commission in recital 130 of the Decision of 5 February
Dutch insurance activities ( 112 ). In other words, Fortis
2010.
SA/NV has been split in smaller entities and Fortis
Bank SA/NV itself has been cut into two parts ( 113 ).
(316) In other cases, burden-sharing measures are also
necessary to make sure that rescued banks bear
adequate responsibility for the consequences of their
past behaviour so as to create appropriate incentives
(320) The Commission observes that the measures in favour of
for the future behaviour of themselves and others. That
FBN and ABN AMRO N assessed in this Decision have
factor is less relevant in this case as the problems of the
specific features which differ from other restructuring
company were to a large extent linked to the former
cases it had to deal with during the current crisis,
parent company Fortis SA/NV (see section 6.3.3
including those of Fortis Bank SA/NV and Fortis
‘Measures to limit distortions of competition’).
SA/NV. In this case, FBN and ABN AMRO N do not
Therefore it can also be accepted, from a burden-
primarily need State aid because they took flawed
sharing perspective, that there are no major divestments
management decisions. The need for State aid does not
apart from the disposal of PFS and Intertrust which
stem for instance from the accumulation of excessive
jointly accounted for […] % of total operating income
risks in their investments or in their lending policy, or
and […] % of RWA.
because they had undertaken an unsustainable pricing
policy. Equally, the difficulty of Fortis SA/NV and Fortis
Bank SA/NV did not stem from risky lending or pricing
policies in the retail banking, private banking or
commercial banking activities, which were on the
6.3.3. Measures to limit distortions of competition
contrary profitable. Consequently, the Commission
considers that the aid to FBN and ABN AMRO N is
(317) With respect to the measures needed to limit distortion
significantly less distortive than the aid approved in
of competition, the present case presents some atypical
favour of financial institutions which had accumulated
features.
excessive risks. Therefore, the Commission considers
that further divestments are not necessary.
(318) Point (28) of the Restructuring Communication indicates
the type of distortion of competition which may occur
when State aid is provided in order to support financial
stability in times of systemic crisis: ‘Where banks
(321) However, it should to be ensured that the State aid is not
compete on the merits of their products and services,
used by FBN and ABN AMRO N to grow at the expense
those which accumulate excessive risk and/or rely on
of competitors, for instance by implementing an unsus
unsustainable business models will ultimately lose
tainable pricing policy or by acquiring other financial
market share and, possibly, exit the market while more
institutions. If that were to happen, the aid would
efficient competitors expand on or enter the markets
‘weaken the incentives for non-beneficiaries to compete,
concerned. State aid prolongs past distortions of
invest and innovate’ and could undermine ‘incentives for
competition created by excessive risk-taking and unsus
cross-border activities’ by discouraging entry in the Dutch
tainable business models by artificially supporting the
market.
market power of beneficiaries. In this way it may
create a moral hazard for the beneficiaries, while
weakening the incentives for non-beneficiaries to
compete, invest and innovate’.
(322) The State aid can therefore only be declared compatible if
there are sufficient measures in place ensuring that the
(319) As explained in the Decision of 3 December 2008, the
State aid is not used to the detriment of competitors,
difficulties of Fortis SA/NV and Fortis Bank SA/NV
some of which did not receive similar public support.
followed from excessive risk: (i) Fortis Bank SA/NV
A level playing-field should remain in place between
invested a large amount of money in structured credit
banks which received public support and those which
and (ii) Fortis SA/NV decided to purchase ABN AMRO N
did not. It should also be avoided that the State
at a very high price. In order to authorize aid to such
banks, the Commission requires a significant reduction of
( 112 ) Those last two businesses are managed as separate entities and the
the market presence of the beneficiary. In this respect,
Dutch authorities announced in November 2008 that they will not
the Commission observes that Fortis SA/NV has been cut
integrate them.
into four: the Belgian and international insurance assets
( 113 ) In its decisions of 3 December 2008 and 12 May 2009, the
are still part of the listed Fortis SA/NV (which after the
Commission observed on that basis and on the basis of other
commitments that sufficient measures had been implemented to
collapse of Fortis SA/NV was renamed Ageas); Fortis
limit the distortion of competition created by the aid to Fortis
Bank SA/NV and BGL have been acquired by BNP
SA/NV and Fortis Bank SA/NV.

---

L 333/42
EN
Official Journal of the European Union
15.12.2011
aid weakens incentives for non-beneficiaries to compete,
(327) Since a price leadership ban is difficult to implement and
invest and innovate and that entry barriers are created
monitor in private banking, it is necessary to implement
which could undermine cross-border activity.
other suitable remedies to ensure effective competition,
such as measures that favour entry, as described in point
(44) of the Restructuring Communication. In that regard,
a necessary condition to declare the aid compatible is
that ABN AMRO Group will implement a measure that
facilitates switching. Concretely, ABN AMRO Group
should cover its own administrative and transfer and
(323) The Restructuring Communication provides that the
transaction costs for its customers of Private Banking
nature and form of such caps will depend on the
NL, which are the direct consequence of the ending of
amount of aid and the conditions and circumstances
the private banking relationship and the transferring of
under which it was granted and also on the char
portfolios (
acteristics of the market(s) on which the beneficiary

114 ). That measure should apply during a
period of two consecutive months, starting as soon as
bank will operate. The amount of aid has been
possible and within a year after the date of the Decision
described in section 6.1.3 ‘Quantification of Aid’. The
at the latest. As soon as the two-month period starts, the
specific conditions and circumstances under which it
Bank will inform all its private banking customers in an
was granted have been discussed at the beginning of
unambiguous way of the possibility offered to them.
the present section. As mentioned in point (32) of the
ABN AMRO Group should also provide evidence to
Restructuring Communication, the size and relative
the Commission that the customer transfers are
importance of the bank on its market(s) play also a
executed following the normal proceedings and that
role. If the restructured bank has limited remaining
there were no delays in the customer transfer process.
market presence, additional measures are less likely to
be needed. Therefore, the conditions necessary to
declare the aid compatible mainly relate to retail and
private banking as the company has already substantially
reduced its presence in commercial banking via the
divestment of New HBU.
(328) If the measures to limit undue distortions of competition
and more particularly the specific measures in retail and
private banking are correctly implemented, they would
also sufficiently addresses the issues raised by the
complainant. When investigating those issues, the
(324) The aid can be declared compatible with the Restruc
turing Communication on the condition that ABN
Commission found that ABN AMRO has been pricing
AMRO Group implements the measures described in
some products temporarily at a loss but that pricing
points (325) to (329).
policy took place in a liquidity-constrained environment

where all banks were competing aggressively for savings,
while there was also the specific start-up context of
MoneYou (whose launch was decided before the Fortis
SA/NV collapse).
(325) In retail and private banking, the aid can be declared
compatible on the condition that ABN AMRO Group
will not be the price leader for standardized savings
and mortgage products. In line with point (44) of the
Restructuring Communication, ABN AMRO Group
should not offer price conditions which cannot be
(329) Point (44) of the Restructuring Communication also
matched by non-aided competitors.
mentions that banks should not invoke State support
as a competitive advantage when marketing their
financial offers. Therefore, a condition to declare the
aid compatible is that ABN AMRO Group will not use
State aid in its marketing campaigns and communication
to investors, for a period of 3 years. Those prohibitions
should extend to up to a period of 5 years as long as the
(326) Since a price leadership ban might be less effective in
Dutch State holds a shareholding of at least 50 % in ABN
segments with many non-standardised products such as
AMRO Group.
private banking in the Netherlands where there was a
specific complaint, an additional condition is needed in
( 114 ) ABN AMRO Group shall not be obliged to cover other financial
line with point (44) of the Restructuring Communication
consequences for the customer, such as for instance costs or
to declare the aid compatible. ABN AMRO Group must
damages associated with the (early) liquidation or ending of
aim to achieve the net interest revenues as presented to
positions, mortgages, savings deposits, security rights or holdings
the Commission on 8 November 2010. ABN AMRO
of the customer and any costs incurred by another financial insti
Group should therefore take appropriate action as soon
tution and/or costs incurred by the customer in relation to the
entering into of new positions and/or contracts and other financial
as it observes that it undershoots its projections,
consequences related to the termination of any and all products
especially when the latter is due to low interest margins.
and services by the customer.

---

EN
15.12.2011 Official
Journal
of
the
European
Union L
333/43
(330) From the perspective of undue distortions of
Article 2
competition, the Commission regards positively the
divestments of PFS and Intertrust. The disposal of PFS
For the purposes of this Decision, the following definitions
reduces the company’s attractiveness towards institutional
apply:
customers, while Intertrust provided, inter alia, services
which could make the private banking franchise stronger.
(a) ‘ABN AMRO Group’ means ABN AMRO Group and its
As a result, its sale might make it easier for competitors
wholly owned direct or indirect subsidiaries, including the
to improve their competitive position as against that of
entities in which ABN AMRO Group has sole control within
ABN AMRO Mees Pierson. The Commission also
the meaning of Council Regulation (EC) No 139/2004 of
considers that the fact that part of the aid has been
20 January 2004 on the control of concentrations between
repaid contributes to limit the distortions of competition.
undertakings (the EC Merger Regulation) ( 115 ).
The Commission also takes a favourable view on the
dividend policy as described in recital 75.
(b) ‘rank first’ means to offer the most attractive price.
6.3.4. Conclusion
(c) ‘retail customers’ means all individual customers (as opposed
to corporate customers).
(331) Thus, if all the conditions described in sections 6.2 and
6.3 are correctly implemented, the December 2009
(d) ‘standardised retail savings and deposit products’ means all
Restructuring Plan updated by the November 2010
standardised retail and deposit products covering at any
Restructuring Plan provides sufficient evidence that the
point in time at least 85 % in volume of the products of
long-term viability of ABN AMRO Group has been
ABN AMRO Group in the retail savings and deposit market.
restored. The December 2009 Restructuring Plan
updated by the November 2010 Restructuring Plan
provides sufficient burden-sharing and contains
(e) ‘standardised mortgage products’ means all standardised
adequate measures to limit undue distortions of
retail and deposit products covering at any point in time
competition. Therefore, the Commission can condi
at least 85 % in volume of the products of ABN AMRO
tionally declare the December 2009 Restructuring Plan
Group in mortgages.
as updated by the November 2010 Restructuring Plan in
line with the Restructuring Communication.
(f) Private Banking NL means all clients of BU Private Banking
except those that are part of Private Banking Inter
national ( 116 )
7. CONCLUSION
Article 3
The Commission finds that the Netherlands has unlawfully
implemented the State aid listed in section 6.1.3 ‘Quantification
1. In
the
absence
of
the
Commission’s
prior
authorisation,
of the State aid’ in breach of Article 108(3) of the Treaty.
ABN AMRO Group shall not rank first with respect to stan
However, that aid can be found compatible if the conditions
dardised retail savings and deposit products for retail customers
set out in sections 6.2 and 6.3 and described more in detail in
among the […] financial institutions having the largest market
the operative part of this Decision are implemented.
share in volume on the Dutch retail savings market in any of
the following segments:
The Commission notes that the Dutch State has exceptionally
— savings accounts;
accepted to receive the text of this Decision only in English.
— fixed term deposits with a period of 1 year;
HAS ADOPTED THIS DECISION:
— fixed term deposits with a period of 2 years;
Article 1
— fixed term deposits with a period of 3 years;
The State aid provided by the Netherlands to ABN AMRO
— fixed term deposits with a period of 4 years; and
Group is compatible with the internal market, subject to the
conditions set out in Articles 3 to 9.
— fixed term deposits with a period of 5 years.
That State aid was provided as follows:
Notwithstanding the first subparagraph, where three financial
institutions jointly rank first among the […] financial insti
tutions having the largest market share in a segment of the
Dutch retail savings and deposit market, ABN AMRO Group
— recapitalisation aid worth between EUR 4,2 billion and EUR
may match the rate of those three financial institutions with
5,45 billion respectively in favour of FBN and ABN AMRO
respect to standardised products in the corresponding segment.
N, and
( 115 ) OJ L 24, 29.1.2004, p. 1.
( 116 ) This refers to the segmental breakdown used in the December
— EUR 71,7 billion of liquidity aid.
2009 Restructuring Plan (see recital 79).

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L 333/44
EN
Official Journal of the European Union
15.12.2011
2. In
the
absence
of
the
Commission’s
prior
authorisation, Commission in the December 2009 Restructuring Plan, as
ABN AMRO Group shall not rank first with respect to any
updated by the November 2010 Restructuring Plan. The
standardised type of mortgage among the […] financial insti
November 2010 projections shall be achieved, at ABN AMRO
tutions having the largest market share on the Dutch retail
Group’s consolidated level.
mortgage market.
ABN AMRO Group shall report to the Commission on a
Notwithstanding the first subparagraph, where three financial
quarterly basis setting out a breakdown of the projections and
institutions jointly rank first among the […] financial insti
the actual figures (including net interest revenues) at the level of
tutions having the largest market share in the Dutch retail
the four segments defined in the December 2009 Restructuring
mortgage market, ABN AMRO Group may match the rate of
Plan and the November 2010 Restructuring Plan: namely, Retail
those three financial institutions with respect to the corre
Banking, Private Banking NL, Private Banking International,
sponding standardised type of mortgage.
Commercial & Merchant Banking.
3. To
ensure
compliance
with
paragraphs
1
and
2,
ABN ABN AMRO Group may submit a reasoned request to the
AMRO Group shall on a permanent basis, and at least every
Commission to revise its projections (including net interest
week, monitor the conditions offered by the […] other financial
revenues) to take into account external developments.
institutions having the largest market share in volume on the
respective Dutch savings markets, to the extent these conditions
are available in the public domain. If the figures of any of those
2. ABN
AMRO
Group
shall
provide
a
breakdown
of
net
[…] other financial institutions are not publicly available, they
interest revenue projections into volumes and margins on a
will be replaced by the figures of next largest financial insti
consolidated level and at the level of private banking.
tutions from the market share ranking.
ABN AMRO Group shall report to the Commission on a
As soon as ABN AMRO Group detects that it offers a more
quarterly basis, and at the latest within 2 weeks after the publi
favourable price for any of its products than that price which it
cation of its quarterly financial results, setting out whether the
is allowed to offer on the basis of paragraph 1 and paragraph 2
net interest revenues achieved at the consolidated level are in
of this article ABN AMRO Group shall immediately inform the
line with the projections referred to in paragraph 1. That report
Commission. It shall immediately adjust the products price and
shall also set out a comparison of projected margins and actual
implement the price adjustment as soon as possible’.
margins at the consolidated level and at the level of private
banking.
With respect to retail savings and deposit products, ABN AMRO
Group shall implement the adjustment no later than ten
If the net interest revenues achieved at the consolidated level are
working days from the date on which it noticed the
not in line with those projections, ABN AMRO Group shall set
condition variation. However, if the variation concerns
out in that report the measures taken to achieve those
products for which the price can only be amended at the end
projections.
of a month and there are less than ten working days between
the time when the variation was noticed and the end of a
month, ABN AMRO Group shall implement the adjustment at
3. The obligations laid down in paragraphs 1 and 2 shall
the first opportunity from the end of the subsequent month.
apply for 3 years as from the date of this Decision.
With respect to mortgages, ABN AMRO Group shall adjust its
Article 5
pricing within ten working days from the date on which it
noticed the condition variation and the adjustment shall be
1. ABN
AMRO
Group
shall
not
acquire
control
of
more
than
implemented no later than fifteen working days from the date
[0 - 7] % of any undertaking.
on which the variation from the condition was noticed.
2. By
derogation
from
paragraph
1,
ABN
AMRO
Group
may
4. The condition as laid down in paragraphs 1 and 2 shall
make acquisitions if the total gross cumulative purchase price
apply for 3 years as from the date of this Decision. ABN AMRO
(excluding the assumption or transfer of debt in relation to such
Group shall submit to the Commission a compliance report
acquisitions) paid by ABN AMRO Group for all such
with this condition on a quarterly basis and at the latest
acquisitions during a period of 3 years following the date of
within 2 weeks of publication of ABN AMRO Group’s
this Decision is less than EUR [0 - 600] million.
quarterly financial results.
The prohibition laid down in paragraph 1 shall not apply to
Article 4
private equity acquisitions by ABN AMRO Group if they fit
within its business plan and the planned budget of its ‘Private
1. ABN
AMRO
Group
shall
use
its
best
efforts
to
achieve
the Equity’ division as submitted to the Commission on 5 October
projections (including net interest revenues) submitted to the
2010.

---

EN
15.12.2011 Official
Journal
of
the
European
Union L
333/45
The prohibition laid down in paragraph 1 shall also not apply
The relevant period shall start as soon as possible after the date
to […] equity stakes taken by ABN AMRO Group’s division
of this Decision allowing for (if required) a reasonable period
‘Energy, Commodities and Transportation’ in support of its
for preparation, and within a year after the date of this Decision
normal financing business if they fit within ABN AMRO
at the latest. ABN AMRO Group shall submit for approval to
Group’s business plan and the planned budget of that division
the Commission a start date for the relevant period at least 4
as submitted to the Commission on 10 January 2010.
weeks before the relevant period is supposed to start.
ABN AMRO Group shall report to the Commission on a
2. ABN
AMRO
Group
shall
provide
to
all
its
Private
Banking
quarterly basis and at the latest within 2 weeks after the publi
NL customers the terms of the offer, described in paragraph 1,
cation of its quarterly financial results. That report shall list
in an unambiguous way on the first day of the relevant period
actual acquisitions by the ‘Private Equity’ and ‘Energy,
at the latest. The information to be sent by ABN AMRO Group
Commodities and Transportation’ divisions. The report shall
to its customers shall first be provided to the Commission at
also provide detailed information on ABN AMRO Group’s
least 4 weeks before that information is sent to its customers.
other acquisitions which it is allowed to make on the basis of
the first subparagraph.
3. ABN
AMRO
Group
shall
facilitate
the
closure
of
private
banking relationships where so requested by customers, using
the ordinary procedures at the lowest cost possible. If the
3. The
prohibition
laid
down
in
paragraph
1
shall
apply
for customer decides to transfer its position and/or (related)
at least 3 years as from the date of this Decision or until the
security rights, and if that transfer is possible from the
date on which the Netherlands’ shareholding stake in ABN
perspective of the transferee bank, ABN AMRO shall facilitate
AMRO Group falls below 50 %, whichever is later. That
such a transfer. Customers shall be informed of the option to
prohibition shall cease to apply at the latest 5 years as from
transfer positions rather than liquidating them and will be
the date of this Decision.
informed of the costs of the two options.
ABN AMRO Group shall cover its own administrative, transfer
In the event that the prohibition laid down in paragraph 1
and transaction costs which are the direct consequence of the
applies for more than 3 years as from the date of this
ending of the private banking relationship and the transfer of
Decision, the total gross cumulative purchase price applicable
portfolios (
under subparagraph 1 of paragraph 2 shall be increased by EUR

117 ).
[0 - 200] million per year.
ABN AMRO Group shall not be obliged to cover other financial
consequences for the customer.
Article 6
ABN AMRO Group shall not advertise the fact that it is State-
owned nor make any reference to any State support received in
Article 8
its communications with existing or potential customers and or
investors for a period of at least 3 years as from the date of this
ABN AMRO Group shall not pay any coupon on core Tier 1,
Decision or until the date on which the Netherlands’ stake falls
Tier-1 and Tier-2 capital instruments (including hybrid capital
below 50 % of the shares in ABN AMRO Group, whichever is
instruments and preference shares) issued before the date of this
later. That prohibition shall cease to apply at the latest 5 years
Decision or exercise any call option rights in relation to such
as from the date of this Decision.
capital instruments until 10 March 2013 included, unless there
is legal obligation to do so.
Notwithstanding that prohibition, ABN AMRO Group may refer
ABN AMRO Group may issue new capital instruments after the
to the fact that it is State-owned and to any other State support
date of this Decision or pay coupons on such new capital
it received whenever such reference is required under applicable
instruments, unless such issues or payments result in an obli
legislative or regulatory provisions.
gation to pay coupons on its own existing capital instruments
Article 7
By derogation from the first subparagraph, ABN AMRO Group
may call FCC instrument (namely EUR 87,5 million, 6,25 %
1. ABN
AMRO
Group
shall
offer
customers
of
Private non-cumulative non-voting perpetual class A series I preference
Banking NL the option to end their private banking relationship
shares issued by Fortis Capital Company Ltd).
with ABN AMRO Group and to transfer their investment port
folios to other banks. That offer shall hold for a period of two
( 117 ) In line with the numerical examples that ABN AMRO Group
consecutive months (‘the relevant period’).
provided to the Commission on 18 November 2010.

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L 333/46
EN
Official Journal of the European Union
15.12.2011
Until 10 March 2013 included, ABN AMRO Group shall only pay a dividend on its ordinary shares if that
dividend exceeds EUR 100 million ( 118 ).
Article 9
By 30 June 2011 at the latest, ABN AMRO Group shall pay to the Netherlands an adjusted interest rate on
the loans identified in the electronic mail from the Commission to the Dutch State dated 24 June 2010. The
amounts adjusted with interest come to EUR 18 152 722.
Article 10
Within 2 months of notification of this Decision, the Netherlands shall inform the Commission of the
measures it has taken to comply with this Decision.
Article 11
This Decision is addressed to the Kingdom of the Netherlands.
Done at Brussels, 5 April 2011.
For the Commission
Joaquín ALMUNIA
Vice-President
( 118 ) On an annual basis, namely intermediary dividend and final dividend.

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