UK regulator reviews RBS purchase of ABN Amro

August 17, 2009

RBS/    LONDON, Aug 16 (Reuters) – Britain’s financial regulator has launched a supervisory review of Royal Bank of Scotland’s <RBS.L> takeover of ABN Amro, the Scottish bank said on Sunday.
   The Financial Services Authority (FSA) told RBS in April it would carry out the review, the bank said in a note in its half-year results.
   “In April 2009 the FSA notified the group that it was commencing a supervisory review of the acquisition of ABN AMRO in 2007 and the 2008 capital raising,” the note said.
   RBS said “the group and its subsidiaries are co-operating fully with this review.”
   The bank led a European consortium that also included Santander and Fortis to buy Dutch bank ABN AMRO for 70 billion euros in October 2007, outgunning Barclays <BARC.L> to land the deal by paying a higher price mostly in cash.
   RBS paid about 10 billion pounds for its portion, mainly investment banking business.
   The consortium was criticised for not cutting its offer as the financial crisis began before the deal was sealed.
   RBS, which became financially stretched by the deal, was forced to surrender a majority stake to the government in return for a 20 billion pound taxpayer-funded bailout last year after it was hit by spiralling losses on risky credit-backed assets.
   The Daily Telegraph said the review would look into the “whys and wherefores” of RBS’ battle with Barclays and what due diligence was performed.
   No further details were available. The FSA would not comment.
   (Reporting by Avril Ormsby; Editing by Richard Chang) ((avril.ormsby@reuters.com ; +44 207 542 1816; Reuters Messaging: avril.ormsby.reuters.com@reuters.net )) Keywords: RBS FSA
  
Sunday, 16 August 2009 23:54:01RTRS [nLG166348 ] {C}ENDS

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