The ABN Amro bank is to sell its subsidiary HBU to Deutsche Bank. The Dutch finance ministry has reached an agreement in broad lines with the German Bank.

European Commissioner for Competition Neelie Kroes extended a Monday-night deadline by 24 hours to allow Finance Minister Wouter Bos to clinch the deal. The sale of the 95-year-old HBU bank is a European Union condition for ABN Amro and Fortis to be allowed to merge.

Two years ago RBS, Banco Santander and Fortis bought ABN Amro in the biggest banking takeover of all time. The European Commission insisted that ABN Amro and Fortis sell 10 per cent of their activities to prevent the new bank from having too dominant a position in the market. A year later, the credit crisis struck, and it became apparent that Fortis had bitten off more than it could chew. The Dutch government stepped in and nationalised the ABN Amro divisions owned by Fortis.

Deadline
Neelie Kroes had already shifted the deadline for the sale several times. She only agreed to yet another extension on Monday evening “in the light of encouraging developments” – it was evident that at last the deal was about to be finalised.

Deutsche Bank first agreed to buy HBU and other ABN Amro divisions in July 2008, but Wouter Bos called off the deal after the nationalisation on the grounds that circumstances had changed. In mid-September a deal with the German bank also failed to go through at the last minute. The finance minister will now ask for yet more extra time to settle the details of the sale. According to Deutsche Bank, today’s deal is principally the same as the July 2008 agreement.

Job losses
Mr Bos has said he is happy with the sale to Deutsche Bank as it makes way for the integration of ABN Amro and Fortis Bank Netherlands. In a letter to the Lower House he writes, “The interests of both the taxpayer and the banks’ staff and customers are the priority.”

However, as a result of the merger, between 4000 and 5000 ABN Amro and Fortis employees are expected to lose their jobs. ABN Fortis boss, former finance minister Gerrit Zalm, has previously said this will make a saving of up to 1.3 billion euros.