The EU's competition watchdog has temporarily approved a Dutch recapitalisation package for ABN Amro and Fortis Bank Nederland (FBN). It has also extended its in-depth probe into state aid for the nationalised banks.
The Commission said the €6.9 billion recapitalisation was necessary to finance the separation of ABN Amro from its mother company and the costs resulting from a merger between FBN and ABN Amro.
EU Competition Commissioner Neelie Kroes warned, however, that it would make sure that competition is preserved.
The Commission has extended the scope of its 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.
'This will allow the commission to assess in detail the combined effect of all the support measures in favour of Fortis Bank Nederland and ABN Amro and give interested parties an opportunity to comment on the additional measures,' the commission said.
The government nationalised the Dutch part of Fortis at a cost of €16.8 billion in October 2008 after the giant Dutch-Belgian bank and insurance group was broken up as a result of the global economic crisis. ABN Amro last June benefited from a Dutch state injection of €2.5 billion.
Late last year the Netherlands announced supplementary measures, including another cash injection of €3 billion in ABN Amro and the Dutch arm of Fortis Bank and the conversion of €1.4 billion in long-term bonds to equity for ABN Amro.
The extended probe is required 'to ensure that the aid is not used to distort competition and to weaken competitors by adopting an aggressive pricing or acquisition policy,' the commission insisted.
