Filed by Fortis SA NV
This information is filed pursuant to Rule 425 under the Securities Act of 1933, as amended.
Subject Company: ABN AMRO Holding NV
Commission File Number: 001-14624
Date: May 29, 2007
Important Information
This information is made available pursuant to article 9b(1) of the Dutch Decree on the Supervision of the Securities Trade 1995.
In connection with the potential transaction involving ABN AMRO, the Banks (Fortis, RBS and Santander) expect to file with the U.S. Securities and Exchange Commission (the “SEC”) a Registration Statement on Form F-4, which will constitute a prospectus, as well as a Tender Offer Statement on Schedule TO and other relevant materials. INVESTORS ARE URGED TO READ ANY DOCUMENTS REGARDING THE POTENTIAL TRANSACTION IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain a copy of such documents without charge, at the SEC’s website (http://www.sec.gov) once such documents are filed with the SEC. Copies of such documents may also be obtained from each Bank, without charge, once they are filed with the SEC.
This information shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This press release is not an offer of securities for sale into the United States. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom.
Forward-Looking Statements
This information includes certain “forward-looking statements”. These statements are based on the current expectations of the Banks and are naturally subject to uncertainty and changes in certain circumstances. Forward-looking statements include any synergy statements and, without limitation, other statements typically containing words such as “intends”, “expects”, “anticipates”, “targets”, “plans”, “estimates” and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the presence of a competitive offer for ABN AMRO, satisfaction of any pre-conditions or conditions to the potential transaction, including receipt of required regulatory and anti-trust approvals, the successful completion of the offer or any subsequent compulsory acquisition procedure, the anticipated benefits of the potential transaction (including anticipated synergies) not being realized, the separation and integration of ABN AMRO and its assets among the Banks being materially delayed or more costly or difficult than expected, as well as additional factors, such as changes in economic conditions, changes in the regulatory environment, fluctuations in interest and exchange rates, the outcome of litigation and government actions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. None of the Banks undertake any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
The following is a presentation that was posted on Fortis’s website on May 29, 2007:
FORTIS
Getting you there.
Fortis + ABN AMRO
Creating the clear leader in Benelux financial services with a sound platform for sustained international growth
Jean-Paul Votron CEO
29 May 2007
FORTIS
Disclaimer
This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of Fortis.
The distribution of this communication may, in some countries, be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. To the fullest extent permitted by applicable law, Fortis disclaims any responsibility or liability for the violation of such restrictions by any person. In connection with the proposed transaction, the required information document will be filed with the competent authorities.
Investors are strongly advised to read the information document filed with the competent authorities, the registration statement and the prospectus, if and when available, and any other relevant documents filed with the authorities, as well as any amendments and supplements to those documents, because they will contain important information. If and when filed, investors may obtain free copies of the registration statement, the prospectus as well as other relevant documents filed with the competent authorities. Investors will at an appropriate time be informed on how to obtain these transaction-related documents.
The financial information contained in this presentation has been prepared by Fortis on a pro forma basis and has not been audited.
No warranty can be given by Fortis, either explicitly or implicitly, regarding the reasonableness, correctness or completeness of the information, forecasts and assumptions contained in these pages. The information here provided could be subject to change. This presentation and the information contained herein in no way replace any formal reporting. Investment considerations should continue to be based on periodical reporting and other information Fortis is required to disclose by law or stock exchange regulations.
Certain of the statements contained herein may be statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions as well as on partial information and involve a certain degree of risk and uncertainty that could cause actual results or performance to differ materially from those expressed or implied in such statements. Actual results or performance may differ materially from those contained in such statements due to general economic conditions, market conditions, changes in laws and regulations, general competitive factors and other factors not specified here.
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 2
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 3
FORTIS
Key highlights of the transaction
EUR 71.1 billion offer for ABN AMRO, EUR 8.6 billion higher than Barclays’ proposed offer (1)
– EUR 38.40 per share, a 13.7% premium to the value of Barclays’ proposed offer (1)
– EUR 30.40 in cash plus 0.844 New RBS Shares for each ABN AMRO Share (2)
– Approximately 79% of the consideration in cash, providing greater certainty of value than Barclays’ proposed offer
Consortium
Proposed offer not subject to any financing condition, with capital raisings fully underwritten
Subject to shareholder and relevant regulatory approval
Proposed offer conditional, inter alia, on result of ABN AMRO shareholder vote on sale of LaSalle
Consortium of Fortis, RBS and Santander offers best fit for ABN AMRO businesses
Transaction to be financed via: Fortis – EUR 15 billion rights issue
– Core Tier 1 hybrids, innovative Tier 1, general leverage, sale of assets and capital relief transactions
(1) Based on undiluted number of shares, as set out in Appendix IV, Sources and Bases, of the Press Release and on the price of Barclays ordinary shares of 712.5p at the close of business on 24 April 2007, the day after Barclays offer was first announced and the day before the Banks first announced details of their proposals including a price indication, and on the price of RBS Shares of 642.5p at the close of business on 25 May 2007 and an exchange EUR 1.00 : GBP 0.6780 (2) Consideration includes EUR 1.00 in cash to be deferred pending resolution of the Bank of America Litigation
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 4
FORTIS
Scope of the acquisition
Upon completion of the transaction, the consortium partners will acquire the following ABN AMRO assets:
BU Netherlands (excl. former Dutch wholesale clients, Interbank and DMC Consumer Finance)
BU Private Clients globally
Fortis
BU Asset Management globally
Use of the ABN AMRO brand
BU North America including LaSalle
BU Global Clients and wholesale clients in the Netherlands (incl. former Dutch wholesale
RBS clients)(1) and Latin America (excl. Brazil)
BU Asia (excl. Saudi Hollandi)
BU Europe (excl. Antonveneta)
BU Latin America (excl. Wholesale clients outside Brazil)
Santander Antonveneta
Interbank and DMC Consumer Finance
Shared assets, benefits and costs to be distributed between consortium members
Private Equity portfolio
Capitalia Consortium Saudi Hollandi
Prime Bank
Head Office and central functions
| (1) |
|
some clients retained by Fortis |
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 5
FORTIS
Fortis’ offer maximising value for all stakeholders
Overall leading bank and insurer in the Benelux, with top positions in all segments: Market Leader – Retail Banking – Consumer Finance in Benelux – Commercial Banking – Asset Management Financial Services – Private Banking – Life Insurance
– Corporate Banking – Non-Life Insurance
Boosting growth profile with strong European platforms in asset gathering:
Top Tier European
– # 3 European player in Private Banking with more than EUR 200 billion AUM
Asset Gatherer
– Top tier European Asset Manager with more than EUR 300 billion AUM
Unique positioning in the wealthy Benelux home market Strong Growth
Steady recurrent earnings streams, funding international growth
Potential
Strong growth engines: roll-out of proven models in Private Banking, Asset Management, Merchant Banking niches, multi-channel distribution Insurance, Consumer Finance, …
Proven integration skills will drive predominantly domestic annual pre-tax synergies of Significant EUR 1.3 billion by 2010 Value Creation
Acquisition is expected to be 4.3% cash EPS enhancing in 2010 Potential
Target return on investment of 11.2% by 2010
Accelerates Fortis’ cash EPS CAGR 2006-’11 by 1% to around 13%
Clients will benefit from enhanced product offering and distribution network
Beneficial to all
Growing European industry leader extremely attractive employer for talented staff
Stakeholders
Deeply rooted in and strongly committed to local communities Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 6
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 7
FORTIS
Fortis - ABN AMRO: top player in Europe set for growth
Highly profitable & sizeable
ABN AMRO
FY 2006 (EUR m) businesses Fortis Combined
Total Revenues - Bank 6,082 10,324 16,406
Oper. Expenses - Bank (4,042) (6,315) (10,357)
Loan Losses (360)(158) (518)
Total Net Profit* 1,200 4,352 5,552
C/I ratio - Bank 66.5% 61.2% 63.1%
| * |
|
Banking, Insurance and General; before minorities in Asset Management |
Well-balanced business mix
(% of FY 2006 net profit, pro forma)
Retail Insurance 24% 23% Banking Asset
4%
Management
25% 16%
Merchant Commercial Banking 8% Banking Private Banking
Top 5 in Eurozone
FY 2006 Adjusted 7.7
7.3 7.3
Net Profit
(EUR bn) 6.0
5.6 5.4 5.2
4.9 4.9 3.8
1 2 3 4 5 6 7 8 9 10
ING BNPP San- DB Fortis - UCI* Soc CASA Intesa- BBVA tander ABN AMRO Gen SPI
| * |
|
pre-merger with Capitalia |
Key figures
More than 10 million retail banking clients
2,500 retail branches in Europe, 145 Business Centres
Total AuM: EUR ~ 500 billion
More than 80% of banking income in NII & Commissions
Continued commitment to achieve 30% of net profit from outside Benelux
More than 80,000 FTEs
Note: all data on this slide are pro forma, based on FY 2006 public information and company estimates
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 8
FORTIS
Clear leader in Benelux financial services
The Netherlands
# 1 Commercial Banking # 1 Private Banking # 1 Funds
# 1 Consumer Finance (incl. cards) # 2 SME Banking # 3 Retail Banking # 3 Insurance
Belgium
# 1 Retail Banking # 1 Commercial Banking # 1 Corporate Banking # 1 Insurance # 2 Private Banking # 2 SME Banking # 2 Funds # 2 Consumer Finance
Luxembourg
# 1 Commercial Banking # 1 Corporate Banking # 1 SME Banking # 2 Retail Banking # 2 Consumer Finance # 2 Insurance
Benelux: attractive & wealthy market
Benelux Germany France UK GDP / Capita (EUR) 32,304 27,967 29,212 31,395 2006
Real GDP CAGR 2.4% 2.2% 2.1% 2.4% 2006-11 est.
Population 27 82 60 59 (million)
Personal financial 69,148 36,634 32,550 94,644 assets pool / Capita
(EUR)
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 9
FORTIS
Fortis + ABN AMRO = Grow²
Fortis stand-alone growth track record
Total CAGR
+34%
4.4
Net Profit Outside Benelux
(EUR bn) 3.5 0.9
CAGR = +58%
0.6
2.4
0.4 Benelux 3.4 CAGR = +30% 2.9 2.0
2004 2005 2006
Fortis + ABN AMRO: growth acceleration
Fortis Cash +13% post-deal
EPS growth Fortis
+12% stand-alone
2006 … 2011
Reinforcing our growth profile (2006 pro forma)
Pre-deal Post-deal
20% 20%
31% 37% growth
Asset Management
10% Private Banking 10%
Revenue
Retail Banking Network
Commercial Banking
0%
0% Low Medium High Low Medium High
Competitive strength % of Banking income (excl. Other Banking)
Extended capacity for growth engines …
Absolute size of revenues in growth engines almost doubling to EUR 6 billion Relative share of growth engines rising from 31% to
37% of total banking revenues
Competitive position of growth engines such as Private Banking and Asset Management firmly reinforced
… supported by a stronger profit base
Retail Banking Network, the recurring income and profit generator, gains in importance and makes it possible to fund additional international growth
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 10
FORTIS
EUR 1.3 billion pre-tax synergies by 2010
EUR 1.3 billion synergies
Synergies 14% 100%
86%
Revenues
Costs Total by 2010
Cost synergies represent 21% of relevant combined costs
Phasing of synergies
Synergies 100% (cumul., time-weighted) 70%
30%
2008 2009 2010
Synergies split
Per Business
Overhead
18% Retail 27% Banking
IT &
17%
Operations
12% Asset 15% Management
11%
Private Commercial Banking Banking
EUR 1.5 billion integration costs
Overhead Per Business
11% Retail IT & 30% Banking Operations 17%
16% 14%
Private
Asset Banking 12% Management Commercial Banking
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 11
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 12
FORTIS
Building Fortis’ leading banking franchise in the Netherlands
Financial data combined entity
ABN AMRO
FY 2006 (EUR businesses* m) Fortis** Combined Total Revenues 3,9481,172 5,120 Oper. Expenses (2,531) (757) (3,288) Loan Losses (320) (94) (414) Net Profit 795 232 1,027 Cost/Income 64.1%64.5% 64.2%
* BU Netherlands figures, excluding former Dutch wholesale clients, Interbank and DMC Consumer Finance activities (based on consortium estimates) **Including Commercial Banking, Corporate Banking, Leasing, Factoring, Retail Banking, Direktbank, Consumer Finance + ALM
Clear market leader
# 1 in Commercial Banking
• # 1 Cash Management
• # 1 Leasing
# 3 in Retail Banking
• # 1 Consumer Finance (incl. cards)
• # 1 Funds
• # 2 Mortgages
• # 2 SME Banking
• # 3 Savings Accounts
Strategy – Going forward
Commercial Banking
• Leverage the strengths of the International Business Centre Network for the Dutch client base
• Leverage Dutch market leadership on international network
• Apply the proven Enterprise & Entrepreneur solutions to the enlarged customer base
Retail Banking
• Recognition of ABN AMRO’s strengths (positioning, brand, approach) to the benefit of the customer
• Revenue enhancement focusing on high potential segments
• Cost optimisation with clear multi-channel strategy
Opportunities/Synergies
Commercial Banking
• Strong value creation, EUR 143 million synergies
• A full and dedicated service offering for each segment
• Exploit value added skills on enlarged customer base
• Reduce time to market (thanks to sharing of best practices)
Retail Banking
• Strong value creation; EUR 363 million of synergies
• Complementary commercial approach, similar segmentation
• Applying Fortis state-of-the-art credit and risk management
• Beneficial for customers; integration into leading activities
Note: all data on this slide are pro forma, based on FY 2006 public information and company estimates
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 13
FORTIS
The Netherlands truly becomes a retail home market
>70% of customer base in upper & medium social classes (A & B) Clients
>50% of customers aged between 18 and 45 years
~5 million Mass Retail customers, ~0.5 million Affluent customers company
~0.4 million SME customers
Similar customer segmentation, widely developed Affluent concept, full-offering for SME & Professionals Products
Leading asset management and mortgage offering, state-of-the-art credit and risk combined management efficiency
~3.4 million credit cards
3rd largest distribution network, with a nationwide coverage and strong presence in wealthiest regions & of Distribution
Converging performance-driven cultures, opportunities for network optimisation and rise of direct channels Growth aspects
~800 branches (of which 80 preferred banking lounges), 78 advice centres for SME
Business
Exploit economies of scale by unifying back and middle offices + IT all
Central support area cost savings
Operations
across
Integration of regional/district levels throughout networks
Customer-centric approach following segmentation strategy: Staff – Retail advisors for Mass Retail customers
– Dedicated preferred/personal bankers serving the Affluent segment
– Specialised account managers for Small Enterprises and Professionals
Common strategic approach across all areas
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 14
FORTIS
Strong coverage for optimal customer servicing
Fortis ABN AMRO
Around 800 branches/bank shops, over 40 Business Centres, 1 dedicated location for Corporates …
… completed with leading presence in intermediary and direct channels
Individual Customers
Serviced through around 800 branches Direct service concept for Mass Retail
Preferred/Personal Banking concept for Affluent
Small Enterprises
Serviced through around 800 branches Dedicated advisory centres Account management approach
Intermediary & Direct Channels
Strong position in intermediary-driven mortgage market Leading on-line banking offering
Commercial Banking
Serviced locally and through integrated international network of Business Centres
Unique Global Relationship Management concept to serve international clientele Cross-border skill for asset based lending
Corporate Banking
Dedicated Senior Banker/Relationship Manager Dedicated Corporate Finance team Support by Merchant Banking skills Support by CB-network
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 15
FORTIS
Commercial Banking: competing from a position of leadership
Market leader in international Commercial Banking in Europe
Unique skill-based model and cross-border presence:
– Leasing – Commercial Finance
– Global Trade Services – Cash Management
Global relationship management: dynamic cross-border client-referral and commercial steering
Unrivalled pan-European network of 145 interacting Business Centres in 19 countries
Joint opportunity and ambition
Combination realises ABN AMRO’s strategic ambition immediately and reinforces Fortis home market position significantly
Similar segmentation should enable swift integration
Capture the Commercial Banking segment potential as European economies become more integrated cross-border
Leverage Commercial Banking network by extending skills coverage and enhance cross-selling in:
– Global Markets
– Acquisition and leveraged finance
– Commodities finance and hedging
– Group Life
– ….
Fuelling growth of Private Banking through unique Enterprise & Entrepreneur concept
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 16
FORTIS
Strong synergies and further growth potential in NL
EUR 506 m synergies
Synergies 15% 100%
85%
Costs Revenues Total by 2010
EUR 431 million of cost synergies, 13% of the combined cost base
Retail Banking
• Network rationalisation through branch mergers
• Fold-in Direktbank in Florius / ABN AMRO hypotheekbedrijf and ABN AMRO credit cards in International Card Services
• Operational excellence
Commercial Banking
• Focused Business Centres approach and Corporate & Investment Banking presence
• Install lean management layers
Combine and integrate overlapping support functions
Growing profitably in a mature & competitive market
Revenues Expenses Net Profit
CAGR CAGR CAGR
>4% <2% >12%
‘06 ‘10 ‘06 ‘10 ‘06 ‘10
Growth expectations for the total Dutch market:
CAGR mortgages: 3.7%
CAGR consumer credit: 2.4%
CAGR mutual funds: 7.7%
Source: Datamonitor
EUR 75 million of revenue synergies, 1.5% of the combined revenue base
Retail Banking
• Higher sales volumes on mutual funds, increased bancassurance penetration, upstreaming
• Higher activation of ABN AMRO credit
Commercial Banking
• Exploit value added skills (e.g. leasing, factoring…) on an enlarged customer portfolio and benefit from the pan-European “network effect” in Commercial Banking
Attrition assumptions included
Risk enhancement leading to lower credit losses
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 17
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 18
FORTIS
Creation of a leading European asset manager
Highly profitable & sizeable
ABN AMRO
FY 2006 (EUR m) businesses Fortis Combined
Total Revenues 745 347 1,092
Oper. Expenses (528)(208) (736)
Loan Losses - - -
Minorities (14) (3) (17)
Net Profit 138 98 236
C/I ratio 70.9%59.9% 67.4%
Top tier European Asset Manager
FY 2006 1,374 AuM (EUR bn) 764 688
583 543
538 490 416
405 354 326 314
1 2 3 4 5 6 7 8 9 10 11 12
Barc- Allianz AXA Natixis DB UBS CASA CS ING SGAM BNP Fortis lays AM + ABN
Leading provider of asset management solutions
True multi-product investment and structuring solutions
Autonomous investment centers for a broad range of asset classes
Each investment center with core proprietary research process designed specifically to extract alpha
100% accountability aimed at motivating investment specialists to create alpha
Range of investment styles from traditional long only to long-short products focused on absolute return strategies
A winning combination
Common management philosophy & similar strategy
Strong product complementarities: highly diversified range of strongly performing products
Firm European footprint combined with global reach & scale
Deep pool of talent to lead and manage the combination
EUR 160 million synergy potential
Access to high growth markets & capabilities in high growth product areas
Note: all data on this slide are pro forma, based on FY 2006 public information and company estimates
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 19
FORTIS
A powerful Asset Management combination
Growth & efficiency across all aspects of combined company
Clients
Products
Regions
Business Operations
Staff
Client centric approach to retail, private and institutional segments
Well placed to take advantage of third party growth on back of broad top quartile range
Strong and expanding European and US institutional client base
Top quartile performance across asset classes
Complementarities (e.g.: currency overlay)
Achieve scale in core growth products (Structured Products, Socially Responsible Investments, Alternative Investments, Global Property, ALM capability)
Leading market shares in Benelux, Nordics, UK and France
Solid base for growth in other European countries: Italy, Spain & Germany
Highly profitable US institutional capabilities
At scale in number of Asian & Latin-American countries
Exploit economies of scale by unifying back and middle offices + IT
Central support area cost savings
Regional integration of offices
570 investment professionals working in an attractive model of autonomous centres
500 specialised Sales & Marketing team focused on innovative solutions for clients
Competencies recognition and performance driven culture with broad international and multicultural staff
Common strategic approach across all areas
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 20
FORTIS
A highly profitable asset manager with global scale & reach
ABN AMRO
Fortis
Amsterdam Vienna
Brussels Warsaw
Hong Kong Antwerp
Zurich Shanghai
Düsseldorf
Boston Oslo Taipei Frankfurt
New York London Stockholm St Petersburg Seoul
Toronto Luxembourg Helsinki Moscow Singapore
Chicago Paris Copenhagen
Atlanta Madrid Brno
Milan Athens
Tokyo
Willemstad
Sydney
Buenos Aires Mumbai
Sao Paulo
Jakarta
Istanbul
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 21
FORTIS
An asset manager with a well-balanced asset split
By geography
Asia
Latam / other Belgium
4%
4% 17%
USA 18%
22%
Netherlands
3% 32%
Rest of Europe Luxembourg
By channel
Combined
Fortis & ABN AMRO Distribution
37% 63%
3rd Party Distribution
By client segment
Institutional 48% 52%
Retail
By asset classes
Cash
18%
42% Fixed Income
40%
Equity
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 22
FORTIS
An asset manager geared to profitable growth
EUR 160 m synergies potential
9% 100%
Synergies 91%
Revenues
Costs Total by 2010
EUR 15 million of revenue synergies
Cross-selling of better rated product to respective client base
Well positioned to take advantage of open architecture
Leverage growth in Asia
1.4% of combined 2006 gross revenues
Total cost reduction of EUR 145 million, or 20% of the combined cost base
Align the investment processes
Combine and integrate overlapping functions, e.g.:
– Sales & Marketing / Investments departments
– Middle Office
IT infrastructure and Front Office Application
Capturing profitable growth
450 AuM Net Profit (EUR bn) (EUR m) 314 500 AuM
CAGR
9%
236 Net profit CAGR
~20%
2006 2007 2008 2009 2010
Benefit from larger geographic footprint and stronger offering to third party distributors
Leverage on a wide, innovative and performing product range
Enforce a very quick integration, with effective results delivered within 1 to max. 24 months depending on the stream
Target cost/income ratio range of 60% to 65%
Take advantage of the combined business high profile people and reinforce the performance culture
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 23
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 24
FORTIS
Creation of a Top 3 European Private Bank
Highly profitable & sizeable
FY 2006 (EUR m) ABN AMRO businesses Fortis Combined
Total Revenues 1,389 703 2,092
Oper. Expenses (983)(474) (1,457)
Loan Losses(40) 2 (38)
Net Profit 253 203 456
AUM 142 79 221
C/I ratio 70.8%67.4% 69.6%
Top 3 European Private Bank
AuM 1,220
(EUR bn)
487
221
189 182 176
138 130
104 88
1 2 3 4 5 6 7 8 9 10
UBS CS Fortis DB Pictet HSBC Barc BNPP LO- CASA
+ ABN -lays DH
One integrated international Private Bank
Service Provider of choice for HNW and UHNW clients
Dedicated, broad and differentiated service offering
Leading position in Benelux and relevant presence in international Private Banking centres
Part of a strong Financial Services provider
A winning combination
Strengthened European footprint & creation of strong growth platform in Asia
Close fit in service philosophy
Similar client segmentation and geographical focus
Leverage best practices and local market strengths into the international network
EUR 203 million of synergies potential
Scale and strong Private Bank identity enable attraction, development and retention of international talent
Note: all data on this slide are pro-forma, based on FY 2006 public information and company estimates
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 25
FORTIS
A first class wealth management business
Growth & efficiency across all aspects of combined company
Clients Products Staff
Regions
Business Operations
Exclusive focus on High Net Worth and Ultra High Net Worth Individuals
Dedicated services for international business owners (Enterprise/Entrepreneur)
Distinctive needs-based approach
Broad service offering covering assets and liabilities (e.g. wealth structuring, Real Estate, credits)
Open architecture allowing access to the best and most innovative solutions
Capturing international opportunities in a range of dedicated skills
Top position in International Private Banking and high-end client pool create highly attractive working environment
Deep pool of highly skilled specialists dedicated to private clients
Embedded in an organisation with professional counterparts
Top 3 position in Benelux and France
Solid base for growth in selected European countries
Geared for accelerated growth in Asia
Integrated network with scalable presence in key international financial centres
Exploit economies of scale and leverage investments in platforms and products
Rationalising locations
Unifying back office and IT allows cross-border cooperation & streamlined sales process
Creating value for clients, staff and other Fortis businesses
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 26
FORTIS
A top 3 European Private Bank with growing Asian business
ABN AMRO
Fortis
Netherland Belgium France UK
Italy Poland Jersey Gibralta
Spain Luxembourg Switzerland Guernsey Monaco Russia Turkey Germany
Hong Kong Singapore
Curaçao
UAE
Taiwan
Indonesia India
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 27
FORTIS
Private Banking: Benefiting from enlarged scale and skills
EUR 203 m synergies potential
21% 100%
Synergies
79%
Revenues
Costs Total by 2010
EUR 43 million of revenue synergies
Leverage best practices in service offering Private Banking
– Credits
– Investments
Cross-selling opportunities within Fortis
– Enterprise/Entrepreneur approach outside Benelux
– Fortis Intertrust
Total cost reduction of EUR 160 million, 11% of combined base
Platform and IT synergies
Combine and integrate overlapping functions and processes e.g.: rationalise locations, streamline investment process
Capturing profitable growth
AuM Net Profit (EUR bn) (EUR m) 221 AuM
CAGR ~10%
456 Net profit CAGR
~20%
2006 2007 2008 2009 2010
Benefit from deeper geographic footprint enabling accelerated roll-out of full service offering in growth locations
Strengthened capacity vis-à-vis third party providers
Accelerated growth in Asia
Scale allows strict focus on HNW client segment
Target cost/income ratio range of 60% to 65%
Asset split by geography
Americas 0.4% Asia 8%
Rest of Europe 28%
53% Benelux
11%
Switzerland
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 28
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 29
FORTIS
Combined strengths in Operations & IT = Deliver²
Operating in a
COMMON ENVIRONMENT
With a set of
COMBINED STRENGTHS
Allowing
NATURAL SYNERGIES
with
HIGH FEASIBILITY
Same businesses, same geographies, same regulators
Aligned manufacturing operating model
High cultural fit reducing execution risks
Strong track record of cross-border shared service delivery
Rich set of assets & partnerships to accelerate integration
Strengthened skills pool in war-for-talent
Investments & mandatory project overlap, leveraging scale effect
Combining staff reductions, selective sourcing & load balancing
Rapidly migrating to the dominant business platform & environment
Leveraging Consortium common operating model and capability
Organisational DNA built on string of successful acquisitions
Total synergies in Operations & IT estimated at EUR 421 m, of which EUR 196 m already included in businesses’ synergies estimates
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 30
FORTIS
Operations & IT: Three phases & sources of synergies
100%
EUR 421 m total synergies
Synergies
80% 60% 40% 20%
In Country
Cross-border
3 years
Phase I: TRANSITION
Consortium runs ABN AMRO “as is” under RBS management
Successive carve out & transfer of IT & Operational assets
Review of major supplier and sourcing agreements
Phase II: INTEGRATION
Rapid fold-in to IT & Operational target platforms and global networks (Commercial Banking, Leasing & Commercial Finance,...)
Consolidation of IT Infrastructure, reduced development & maintenance costs
Phase III:TRANSFORMATION
Deliver cross-border synergies from global operational factories in Payments, Securities, Mortgages, Finance,.
Seize value creation opportunities of combining volumes & geographical reach of the Consortium + ABN AMRO
Private Banking (PB) Commercial Banking (CB)
6% 3%
Asset Management (AM)
14%
EUR 196 m direct synergies
24%
Retail Banking (RB)
PB
24% EUR 225 m additional
53% 10% 53% RB
CB central 13% synergies
AM
Indicative allocation
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 31
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 32
FORTIS
A track record of profitable growth enhanced by acquisitions
EUR Creation BGL, Disbank, CMT, ASLK-CGER MeesPierson G-Bank ABI Intertrust per share of Fortis ASR Dryden WM Von Essen cross-border 3.5 merger of AG 1824 (BE) & AMEV (NL)
3.0
EPS 2.5 CAGR
11%
2.0
1.5
1.0
DPS CAGR
0.5 15%
0.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Note 1: History of the figures per Belgian share, in EUR Note 2: Non-exhaustive list with examples of acquisitions
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 33
FORTIS
A demonstrated integration capability
Merger ASLK & G-Bank 861
Synergies
(EUR m) 675 Revenues
+28% 314
Revenues 251
Costs Costs 547 424
Promised by Realised by 2003 2002
Cost synergies: 11% of combined base
Revenue synergies: 5% of combined base
Fortis Bank Turkey
Transaction closed within 3 months
Strong commitment to invest:
– opened 50 new branches in 18 months – capital increase of EUR 165 million
IT integration
Strong involvement and support of local management to build Fortis Bank Turkey
Merger AMEV & ASR
Synergies 814
750
FTE +9%
Announced Realised
FTE reductions: 16% of combined base
70% increase in net profit in 3 years
Dryden Wealth Management
Transaction closed within 3 months
Successful turnaround: after years of operating losses, now back in positive territory driven by both – revenue increases and – efficiency improvements
Successful staff retention program
Assets maintained at USD 10 billion - business revived
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 34
FORTIS
Fortis’ standardised integration methodology
Cost of equity
(in % RoI) Phase 2 creation
Value
Phase 1
36 months
| 3 |
|
months 15 months 18 months |
Phase 0: Pre-acquisition
Develop clear strategic vision on enlarged entity
Set up post-acquisition integration office, appoint integration officers and define progress reporting
Prepare retention scheme for key staff and clients
Communicate with all relevant stakeholders
Phase 1: Transition
Appoint the key management teams for all major integration projects
Execute the business plan, with simultaneous dual focus on synergies and commercial plan
Complete legal, tax and regulatory outstandings
Risk mitigation strategies
Phase 2: Integration
Develop the multi-year business plans of the new enlarged entities
Continuously refine/update integration deliverables based on actual experience
Roll-out full HR strategy, incl. cultural integration plan
Initiate IT/OPS carve-out
Support brand strategy
Phase 3: Transformation
Finalise the integration plans & deliver synergies
Implement the new commercial targets and growth plans
Leverage best practices across entire group & accelerate international expansion
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 35
Note: non-exhaustive overview
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 36
FORTIS
Financing the transaction from a sound capital position
Sound capital position
Fortis Q1’07 Core Equity
EUR 1.1 bn
20.3 above Target
19.2
Actual Target
Capital 6.5% 7.0% Bank Tier 1 Ratio’s 269% 225% Insurance CAD
Fortis intends to maintain its solvency targets as announced for its new capital model
The solvency impact will be in three stages:
– Partial impact in first phase when assets will be consolidated by RFS Holdings
– Full impact at acquisition of assets by Fortis
– Further solvency relief in the third phase with sale of assets and other capital relief transactions
The acquired assets have a low risk profile
Financing the transaction
The acquisition amount of 24 billion EUR will be financed by:
– Rights issue for new shares: around EUR 15 bn
– Other capital instruments : EUR 3 - 5 bn
– Capital relief transactions
(including sale of residual and non-core assets): EUR 5 - 8 bn
– Total: EUR 23 - 28 bn
These financing means include a buffer. The effective financing mix will be assessed at a later stage. It will depend, among other things, of the effective split of assets and liabilities.
Core Tier 1 ratio of at least 5.7% and Tier 1 ratio of at least 6.7% immediately after completion of the transaction
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 37
FORTIS
Financing the transaction: Solvency and cash secured
The financing of the solvency needed for the acquisition is secured by:
– A standby underwriting arrangement for up to EUR 17 bn, more than the full amount of the rights offering, fully underwritten by Merrill Lynch and some major European banks
– A standby underwriting commitment for capital instruments for EUR 5 bn, fully underwritten by Merrill Lynch
The financing of the required cash is further secured with a EUR 10 bn backstop liquidity facility signed with some major European banks
An extraordinary GSM will be convened in Belgium and in the Netherlands to approve the capital increase and to grant the Board necessary authorisation to determine its concrete implementation
Precise terms and conditions will be proposed later on, depending on market conditions and on bid process
Timing of the rights issue will depend on the M&A process itself and on regulatory requirements, but it should be closed and settled before the settlement of the offer on ABN
AMRO
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 38
FORTIS
Total pre-tax synergies of EUR 1.3 billion by 2010: Overview
Amount (EUR million) Total (%)
Retail Banking
307 56 363 27%
Netherlands
Comm. Banking
124 19 143 11%
Netherlands
Private Banking 160 43 203 15%
Asset
145 15 160 12%
Management
IT &
225 225 17%
Operations
Overhead 189 54 243 18%
Total 1,150 187 1,337 100%
Cost synergies Revenue synergies
Rationale
Optimise branch network
Harmonise IT & Front-office application
Combine & integrate common functions
Streamline, leverage business centre network
Reduce overlap in support functions
Cross-sell skills, such as leasing & factoring
Optimise geographic coverage
Combine & integrate common functions
Leverage best practices in alternative investments and credits
Align investment processes
Combine & integrate common functions: Sales & Marketing, Middle office, IT, …
Rationalise central IT & Operations structure
Optimise head office functions
Enhance the yield on the investment portfolio
21% of relevant combined cost base, or 28% of acquired ABN AMRO cost base
EUR 1,540 million integration costs
Conservative revenue synergies
3-year plan: target year 2010
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 39
FORTIS
Transaction financials
Consideration for ABN AMRO Businesses EUR 24 billion
9.8 times estimated 2007 earnings + full post-tax benefits (1)
Financing: approximately 60% rights issue, 20% non-equity Tier 1, 20% sale of assets, capital relief and debt
Core Tier 1 ratio of at least 5.7% and Tier 1 ratio of at least 6.7% immediately after completion of the transaction
Estimated Return on Investment of 11.2% in 2010 (2)(3)
Estimated Accretion to Group earnings of 4.3% in 2010, with full synergies (3)
Accelerates Fortis’ cash EPS CAGR 2006-’11 by 1% to around 13%
| (1) |
|
Excluding shared assets |
(2) Return on investment defined as profit after tax plus post-tax transaction benefits over consideration plus post-tax integration costs (3) Adjusted for purchased intangibles amortisation
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 40
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 41
FORTIS
A socially responsible integration plan
FTE synergies 6,443
ROW
FTE 2,182 81,781
ROW 616
75,338
NL NL 5,827
ROW: 56,886 22,713
ROW
46,070 46,686
ROW 44,504
NL NL 35,095 29, 268 NL
12,382
Fortis ABN AMRO Combined
FTE synergies per Business
Total: 6,443
Overhead
Retail Banking IT & Operations
Private
Banking Asset Commercial Management Banking
A socially responsible integration plan
FTE 100%
92.2%
81,781
75,338
2007 2008 2009 2010
Planned reduction of 2.6% p.a. on the combined FTE base
On total Banking FTE base NL, projected reduction of 7% p.a. vs. an historic natural turnover at Fortis Bank NL of 9%
Fortis overall will remain an active recruiter in order to support its growth plans, enhancing opportunities for employees (Fortis: 6,300 hires in ‘05 and 9,300 in ‘06)
Select best candidate for each position based on merit and competencies
Close involvement of social partners to realise integration
Central Employment office:
Manage career transition of any individual displaced as a result of the integration
In accordance with existing contractual agreements
Find alternative employment in a cohesive and efficient way between consortium members
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 42
FORTIS
A strong commitment to Dutch stakeholders
Customers
A Dutch bank with a unique presence in the Benelux and the third largest network in the Netherlands
Capitalise on strong ABN AMRO quality of service and brand
Extended product and service offering to provide greater choice for customers
Competitive pricing through efficiency synergies
Smooth transition of assets will leave customers unaffected
Employees
Benelux leader, able to attract and nurture talent
One of the largest Dutch employers
Development opportunities outside of home markets
Extensive training programs for all staff categories
Professional environment stimulating entrepreneurship and leadership
International and multi-cultural organisation
Community
Deeply rooted in Dutch community since 18th century
Key Benelux and Dutch growth engine contributing to economic development
Dedicated attention on specific needs of all layers of society with social responsibility initiatives (e.g. Foundations)
Sustainable development as part of company’s DNA
One of the largest tax payers in the Netherlands
Strong commitment to value creation, benefiting from its unrivalled Benelux presence
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 43
FORTIS
Agenda
| 1 |
|
Fortis’ offer maximising value for all stakeholders |
| 2 |
|
A top financial institution in Europe set for growth |
| 3 |
|
Clear leader in Benelux Financial Services |
| 4 |
|
Creation of a leading European Asset Manager |
| 5 |
|
Creation of a top 3 European Private Bank |
| 6 |
|
Leveraging the combined strengths in IT & Operations |
| 7 |
|
Strong acquisition track record limits execution risk |
| 8 |
|
Financing the transaction from a sound capital base |
9 Committed to maximise value for clients, staff, share- and other stakeholders
10 Key investment highlights
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 44
FORTIS
Clear Benelux leader with strong growth potential
1. Creation of clear leader in Benelux financial services
2. A sound platform for sustained international growth
– Creation of a leading European Asset Manager
– Creation of top 3 European Private Bank
3. Strong acquisition track record limits execution risk
4. Committed to maximise value for all stakeholders: our clients, staff, shareholders and the community
Fortis’ proposed offer for selected ABN AMRO assets | 29 May 2007 | 45
FORTIS
Getting you there.