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Dutch bank merger to go ahead

City A.M. Reporter
THE Dutch finance ministry still intends to pursue a combination of nationalised banks ABN Amro and Fortis Bank Nederland, it said in a letter to parliament yesterday, quoshing speculation it might scrap the plan.<br /><br />Before it can merge the two banks, the state has to comply with a European Commission order from late 2007 on competition in the Dutch market, the original remedy for which was the sale of some ABN Amro assets to Deutsche Bank.<br /><br />That deal fell apart earlier this month and the state requested and received a two-week extension from the EU to come up with an alternative proposal.<br /><br />When a consortium of banks including Fortis struck a deal to buy ABN Amro Group and carve it up in 2007, the EU ordered Fortis to sell a bundle of Dutch ABN Amro assets to address competition concerns in the small and medium-sized enterprise market.<br /><br />The bundle included commercial bank HBU, 13 advisory branches and two corporate client units. <br /><br />When the state nationalised Fortis&rsquo;s local operations in October 2008, the remedy order remained. The state&rsquo;s ultimate plan had been a combination of the two entities and then an IPO in 2011 or later.<br /><br />The finance ministry also said it would come back in October with a proposal to parliament on recapitalising the banks.