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Dutch agree more funding for ABN Amro

City A.M. Reporter
The Dutch government yesterday said it would have to inject another &euro;3bn (&pound;2.7bn) into nationalised bank ABN Amro, which will raise the national debt with no immediate return for the state.<br /><br />The finance ministry also said that a long-negotiated ABN asset sale to Deutsche Bank was worth &euro;700m, but could collapse unless parliament approves it by 31 December. <br /><br />However, Deutsche Bank declined to comment.<br /><br />The government has now committed more than &euro;23bn in the last 13 months to ABN Amro and the nationalisation process, making it one of the world&rsquo;s costliest bailouts since the financial crisis began.<br /><br />The state took control of the local operations of Fortis, including ABN Amro, for &euro;16.8bn in October 2008, a year after a consortium including Fortis and Royal Bank of Scotland (RBS) bought ABN .<br /><br />&ldquo;I doubt that this is the last capital injection,&rdquo; said Arnoud Boot, professor of corporate finance and financial markets at the University of Amsterdam. &ldquo;Undoubtedly there will be a few billion more along the way.&rdquo;<br /><br />But finance minister Wouter Bos made clear he meant for yesterday&rsquo;s infusion to be the last. <br /><br />He said: &ldquo;It is our intention that this is the last time money goes to ABN. If, under normal circumstances, there will be a situation that capital is needed, they have to find a solution on their own and not come back to us again.&rdquo;<br /><br />In addition to the &euro;3bn cash, the government said &euro;1.4bn in long-term bonds would be converted to equity for ABN Amro, making the total infusion &euro;4.4bn. <br /><br />The government had already pumped another &euro;2.5bn into ABN Amro this summer to help fund the split of the state-owned assets from assets legally owned by RBS.