The European Commission approved temporarily under EU state aid rules, on 8 February, aid granted by the Netherlands to ABN AMRO and Fortis Bank Nederland (FBN) within the framework of the merger of the two banks, nationalised in October 2008. ABN AMRO received a capital injection of €2.5 billion from the government of the Netherlands in June 2009. At the end of 2009, the state announced additional recapitalisation measures, approved by the Dutch parliament, consisting of a further capital injection of €3 billion in ABN AMRO and FBN, and a conversion into capital of state loans to Fortis, in the amount of €1.4 billion.

The measures are urgent rescue aid to finance the separation of ABN AMRO from its parent company and the integration costs resulting from the merger between FBN and ABN AMRO. They will apply until 31 July 2010. At the same time, the Commission extended the scope of its in-depth investigation, opened in April 2009, into an aid package related to the purchase of Fortis Bank Nederland by the Dutch state, to include these additional measures.

The Commission notes that the actual separation of ABN AMRO’s Dutch activities from the parent company took place during the weekend of 6-7 February and that this decision relates to the activities of the Dutch-owned ABN AMRO (and to FBN). The public aid would be provided through a set of five measures: a guarantee on a portfolio of €34.5 billion of Dutch mortgage loans, the subscription to a mandatory convertible security worth €3.1 million, the conversion into capital of Tier 2 loans granted to FBN, a cash payment of €740 million and the provision of a counter-guarantee on a €950 million liability.