ABN Amro Eyes Listing On N.Y. Stock Exchange To Boost U.S. Presence

Now that ABN Amro Holding NV has made a name for itself in American banking, it will be hanging a shingle on the New York Stock Exchange.

In May, Amro plans to join the growing ranks of foreign banks who list American depositary receipts on the Big Board.

Bank of Montreal, Royal Bank of Canada, and Natwest are among those who have already signed on.

The Amsterdam-based holding company plans to purchase 1% of its ordinary shares from parties to re-offer to U.S. investors, once the listing is approved by the Securities and Exchange Commission. The bank also plans a 4-for-1 stock split, pending board approval.

ADRs allow American investors to buy shares in foreign companies here instead of overseas, entitling its owners to the same benefits as shareholders. A depository institution holds the ordinary shares in an account and allows investors to buy and sell in U.S. dollars.

"The listing will provide us with access to the largest capital markets in the world and will also imply the possibility to finance possible future acquisitions with shares instead of cash only," said P.J. Kalff, chief executive of ABN Amro, in an official statement.

In the past, sophisticated investors used ADRs to arbitrage. For example, if the stock trades overseas at the equivalent of $68.17, and at $68.25 on the New York board, these investors could score a quick profit by selling the ADRs short and buying the stock in Amsterdam.

Observers expect the move to make Amro more accessible to American investors and nurture further growth through acquisition.

The $341 billion-asset bank has quickly built itself into the second- largest foreign bank in the United States, reaping roughly 19% of its pretax profit from North American business in 1996.

With the acquisitions of LaSalle Group, Chicago, and European American Bank, N.Y., Amro has built up a significant U.S. presence. The bank also announced in November plans to buy Troy, Mich.-based Standard Federal Bancorp for $1.9 billion.

Its acquisition of Chicago Corp. last year gave the bank a dash of investment banking prowess.

Though most Amro watchers give the bank's fundamentals and management a nod of approval, the stock-whose trading typically correlates with the ADRs-certainly has its naysayers.

Analyst Peter Thorne of Paribas Capital Markets cautioned investors about elements in the macro-environment-the rising bond yields in Europe, the imminent weakening in the U.S. dollar, and rise in U.S. interest rates- that may be bad news for the Amro bulls.

"Historically, the stock's performance has been very correlated to these factors," said Mr. Thorne, who recently cut the stock to "sell" from "no action."

The stock is presently viewed as a safe, high-yielding security in the United States.

But as the outlook for the European securities market weakens over the next few years, the stock may have some troubles, Mr. Thorne said.

Mr. Thorne said that the consensus earnings-per-share forecasts of 10.1% are "a touch too high," and that he expects shares to underperform by about 14% over the next year.

He attributed the strong forecasts for Amro's stock to favorable European and American banking markets, not to the sustainability of earnings-per-share growth in the long term.

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