ABN Amro plans big Asia push

Dutch bank aims to ramp up business in five regional markets, including Hong Kong

PUBLISHED : Monday, 24 September, 2012, 12:00am
UPDATED : Monday, 24 September, 2012, 1:42am

Dutch state-owned bank ABN Amro plans to expand in five major Asian markets as it bids to boost its international business in the next five years.

The group would like to see Asian business contributing 20 to 30 per cent of its global revenue in the next five years, up from about 10 per cent now, according to Maaike Steinebach, country executive of Hong Kong and head of energy, commodities, and transport businesses in Asia.

The expansion will target Hong Kong, Singapore, Shanghai, Tokyo, and Sydney; and focus on private banking, securities clearing, energy and commodities financing, and diamond and jewellery financing.

"We do not plan to do everything everywhere. We want to focus on the areas we are good at," Steinebach said.

The trimmed-down group was a completely different entity today from its larger form five years ago, Steinebach said. The bank operates in 25 countries with 24,000 staff, down from 70 countries and 78,000 staff back in 2007.

The group's restructuring began in 2007 when Barclays was outbid by an unlikely consortium of Fortis, Banco Santander, and Royal Bank of Scotland (RBS), which aimed to divide the lender into three parts, with Fortis to acquire its Dutch and Belgian operations; Banco Santander to take over its business in Brazil and Italy; and RBS to take up its wholesale banking operation and Asian business.

The deal was completed in November 2007 but several months later, the global financial crisis left both Fortis and RBS wrestling with liquidity problems, with the result that in October 2008, the Dutch government nationalised Fortis Bank Nederland.

ABN Amro emerged from these developments with the Netherlands' retail, commercial, and merchant banking businesses of the former ABN Amro and Fortis Bank under its wing, as well as ABN Amro's international private banking business.

"We could not neglect Asia. The region's huge population and rising middle class make it the world's fastest-growing area," Steinebach said.

Another factor driving growth in Asia, she added, was the plan by China to promote the internationalisation of the yuan.

The Chinese currency is not yet fully convertible, but since the middle of 2009 Beijing has gradually relaxed its controls over the yuan to allow companies and individuals to use the currency to settle trade and to invest in global markets.

"In the past 100 years, people mainly used the US dollar to settle their trade, but we are going to see changes to this," Steinebach said, noting that an increasing number of European companies were asking their mainland trading partners to settle in yuan.

As many of these European companies did not have the currency on hand, this had created opportunities for banks like ABN Amro to arrange foreign exchange or "dim sum" bonds - yuan-denominated bonds issued outside the mainland, she said.