ABN Amro Shuts Equity Derivatives, Asia Markets Business

Posted by Anton Murray Consulting on 13 Jun, 2014

Maud van Gaal

ABN Amro Group NV, the Dutch state-owned bank, will cut about 100 jobs as it exits equity derivatives and shutters its Asian markets business.

About half of the roles are support functions, Arien Bikker, a spokesman for the Amsterdam-based bank, said by telephone. ABN Amro will also stop offering its own structured products, he said.

ABN Amro, nationalized in 2008, is among European lenders including Royal Bank of Scotland Group Plc and Rabobank Groep closing structured products businesses, citing high capital costs and expenses. Regulators in the U.S. and Europe are seeking to increase transparency after the products came under scrutiny for being opaque and overly complex following the collapse of Lehman Brothers Holdings Inc in 2008.

The company will continue offering foreign exchange, rates and commodity derivatives, securities financing, credit bonds and equity brokerage and research, it said in an e-mailed statement. The markets division, which includes derivatives and other structured products, will remain in the U.S., it said.

The bank employed about 300 people in the markets business globally, excluding support functions, at the end of last year generating about 260 million euros ($353 million) in revenue. The clearing unit wasn’t part of the review announced today, it said.

Hong Kong

ABN remains fully committed to Asia and the majority of staff employed in markets will be reabsorbed into the Hong Kong operations, it said. In the Netherlands, the firm will expand online product offerings in markets to commercial clients. Five regional treasury desks in the Netherlands will be combined into one department, it said.

ABN Amro is preparing for an initial public offering which may take place in the second quarter of 2015 at the earliest, and must show further progress toward 2017 financial targets for costs and profitability before going ahead, Chief Financial Officer Kees van Dijkhuizen said last month.

The company closed its Delta One Arbitrage equity-derivatives division in 2012 as part of cost-cutting. While unwinding some activities, the firm aims to grow in areas including private banking and energy, commodity and transportation finance.

A structured product, including derivatives such as options, warrants and futures, is a contract where the seller promises to pay the investor a return referenced to the performance of an asset.

ABN Amro, one of Europe’s biggest banks a decade ago, was broken up after a record 71.9 billion-euro takeover by Royal Bank of Scotland Group Plc (RBS), Fortis and Banco Santander SA (SAN) in 2007. A year later, the credit crunch drove Fortis to the verge of collapse, forcing the Netherlands to take over its Dutch banking and insurance units, including assets of ABN Amro.


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