ABN AMRO must be integrated with Fortis's Dutch activities before it is taken out of government ownership and privatised, Dutch central bank governor Nout Wellink said on Sunday.
The Dutch government agreed two days ago to buy the Dutch banking and insurance activities of Fortis for 16.8 billion euros ($23.3 billion), including ABN AMRO, replacing a previous partial privatisation package with Belgium and Luxembourg.
Wellink, one of the key architects of the deal and a member of the European Central Bank's Governing Council, said on television that the timing of eventual privatisation for ABN would also depend on the length of the ongoing financial crisis.
Fortis bought ABN a year ago in a consortium with Royal Bank of Scotland and Banco Santander, but struggled to raise money in a steadily worsening credit environment while grappling with writedowns on risky loans, eventually losing the confidence of investors and clients.
On Friday, the Fortis grooup was effectively broken up "The ABN AMRO, Fortis integration must be completed before it can be privatised again," Wellink said on the Buitenhof talk show programme. "That also depends on the length of the financial crisis."
The credit crisis, triggered after mortgages loans made to risky US borrowers began to sour last year, has snowballed through the US economy and is now being felt in Europe, with European leaders vowing on Saturday to do all they could to fend off the financial mayhem.
Wellink added that Fortis was now a well-capitalised concern, and that it had suffered because big clients were withdrawing money from the bank as it lost the confidence of investors and forced governments to intervene to recapitalise the bank.
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