Page 5 - RBS – ABN takeover

ratio deteriorated further to 69.9%. Non performing loans increased considerably

year on year by 192%. Net profits were only boosted by sustained asset sales.

ABN AMRO (See Appendix 4)

2006-7 2005-6
Total net income Down 2.3% Up 15.3%
Operating expenses Up 3.2% Up 21.8%
Impairment losses Up 20.8% Up 129.8%
Profit from continuing operations Down 43.0% Down 24.2%

ABN had developed a strategy of having three home markets: The Netherlands,

the United States, and Brazil. The U.S. commercial banking operations of ABN

consisted of LaSalle Bank in Chicago, Illinois, and LaSalle Bank Midwest in

Detroit, Michigan which operated under the name LaSalle Bank Corporation. In

Brazil, ABN's subsidiary was Banco Real.

In 2005 ABN AMRO acquired Banca Antonveneta of Italy; this effectively gave it

a fourth home market. Antonveneta had been a cooperation partner for some

years and had a similar client base to ABN AMRO. However, for many, such as

TCI, the Banca Antonveneta acquisition was seen as a costly mistake.

The Battle Opens

Discussion with Barclays, Britain’s third largest bank, who planned to keep ABN

largely intact, began in March 2007. However, the 19 March saw talks between

Barclays, and the Dutch bank's board leak and Sir Fred Goodwin, CEO of the

Royal Bank of Scotland enter the fray.