European Commissioner for Competition Neelie Kroes has given Dutch Finance Minister Wouter Bos another 24 hours to sell off the HBU bank, a subsidiary of the state-owned ABN Amro bank.

The sale is a 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.

Neelie Kroes has already shifted the deadline a number of times. She only agreed to yet another extension on Monday evening “in the light of encouraging developments”, to allow Mr Bos to finalise the deal with the buyer. Although no one involved is prepared to give any details of the sale, the buyer is likely to be Deutsche Bank, with which ABN Fortis and the finance ministry have held lengthy negotiations. Mr Bos first called off the sale to Deutsche Bank at the end of 2008. In mid-September, another deal failed to go through at the last minute.

When the expected merger finally goes ahead, between 4000 and 5000 ABN Amro and Fortis employees will 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.