DUTCH STATE-controlled bank ABN Amro posted a €886 million after-tax loss in the first quarter, with most of the total incurred by units in the process of being transferred to Royal Bank of Scotland.

A consortium including RBS, Fortis and Spanish banking group Santander bought ABN Amro in 2007 for €70 billion. After a crisis of confidence, the Dutch government took over Fortis’s local operations, including its interests in ABN Amro, last October for €16.8 billion.

The complexity of the two series of transactions is such that the process of separating the ABN Amro businesses acquired by the Dutch state from the businesses acquired by RBS is still ongoing.

ABN Amro said yesterday that the separation is on track to be finalised by the end of 2009.

That process will leave a new entity controlled by the Dutch state called ABN Amro Bank NV, while the existing company bearing that name will be renamed Royal Bank of Scotland NV.

ABN Amro said the businesses acquired by the Dutch state showed a profit from continuing operations of €87 million for the quarter, while the RBS-acquired businesses lost €928 million.

After the split, the new ABN Amro Bank will focus on Dutch commercial and consumer clients, as well as international private clients and the international diamond and jewellery trade. The new RBS NV will be part of Royal Bank of Scotland’s international lending and transaction services.

ABN said last week it planned to cut 4,000 to 5,000 jobs and up to €1.3 billion in costs over the course of its integration with Fortis Bank Nederland. That integration is the next step the government plans after the RBS split, and was part of Fortis’s original plan.

The Dutch government promised to combine, then privatise the group in 2011 or later, while keeping it sheltered from the global turmoil in financial markets. – (Reuters)