RBS's takeover partner Fortis in rescue talks
The takeover of Dutch bank ABN Amro by a consortium led by Royal Bank of Scotland looked increasingly like a cursed deal last night as one of the partners in the deal struggled to save itself from collapse.
ABN Amro: The takeover drags on
Shares in the Belgian bank Fortis crashed 20% on Friday and Belgian regulators are locked in talks with the bank over rescue measures.
Fortis partnered RBS and Spanish bank Santander in the £50bn takeover of ABN Amro last year.
While Santander, which took over the Latin American divisions of ABN in the carve-up, has thrived, RBS and Fortis have both been left drained by the deal.
The takeover, in which the trio fought off a rival bid from Barclays, is now seen as one of the most ill-timed in banking history, coming as the global financial markets were gripped by the early stages of the credit crunch.
Fortis paid £19bn for the ABN high street banking business in the Low Countries. It is now seeking buyers for various parts of its business in the hope it can raise cash and reassure investors before markets open tomorrow.
In the last year Fortis shares have slumped in value by 75% and at the end of Friday's turbulent session on the Belgian and Dutch stock markets it was worth £9.7bn, half what it paid for its share in the ABN takeover.
RBS, which took over the investment banking side of ABN, has also found its balance sheet stretched and earlier this year went cap in hand to its shareholders for an extra £12bn.
The rights issue was a humiliation for chief executive Sir Fred Goodwin who for months denied that it would need a cash injection.
The Fortis crisis also casts a shadow of uncertainty over the future for the bank's UK staff who work at eight small divisions in Britain.
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