Declaring that he wants to create a Midwest banking powerhouse as formidable as Banc One Corp., the chairman of ABN Amro Holding NV said he plans to step up acquisitions in the United States.
Peter Jan Kalff said that while Holland's largest bank has already made strong inroads in the United States-its ABN Amro North America unit ranks 11th, with $87 billion of assets-it is now in a stronger position to expand.
That's because Amro can now use its newly listed New York Stock Exchange shares, instead of cash, as the currency for mergers, Mr. Kalff told reporters this week.
He said the bank has its eye on further acquisitions in the Midwest, where it is already heavily implanted.
"We plan to become a superregional bank," he said. "We've realized that if we want to continue to grow, we have to go into contiguous states."
Mr. Kalff said Banc One's total asset size of $102 billion, and its market coverage throughout the Midwest were goals ABN Amro would seek to imitate. He was in New York to mark the Big Board debut of Amro's American depositary receipts on Wednesday.
"We like the Midwest because it has stable markets," said Mr. Kalff, who has been chairman of the $342 billion-asset Dutch bank since 1994. "It's not a boom-and-bust type of economy."
Although Amro has had to pay for its U.S. acquisitions in cash, it has been an active buyer since it hit these shores in 1979. That year, it bought LaSalle National Bank as part of a strategy to build a second "home" market outside of the Netherlands.
In the 1980s, ABN Amro insisted it did not want to go beyond building a "super community" banking network in Illinois. Since then, however, the bank has embarked on a string of acquisitions, including several banks and thrifts, an investment bank, and a futures trading shop.
Although Amro bought European American Bank on New York's Long Island in 1990, the bulk of its acquisitions have been in and around Chicago.
Its most recent acquisition stretched its geographic reach. Amro paid $1.9 billion to buy Standard Federal Bank, a Troy, Mich.-based thrift with $15 billion of assets. The deal closed earlier this month.
The purchases, coupled with an expansion in corporate banking and capital markets operations, have turned ABN Amro into the largest foreign bank in the United States.
On Wednesday, Mr. Kalff made it clear that the Dutch bank's strategy had changed dramatically.
But bank analysts were divided over what would be ABN Amro's next target, although all were convinced that another acquisition would not be far off.
"Their management is well aware that given the consolidation in the U.S. market, they will have to build up critical mass in order to compete," said Monica Kapoor, a banking analyst with Fox-Pitt, Kelton in London.
Mr. Kalff noted that there are few institutions of any real size left to acquire in Illinois. He suggested that ABN Amro's regional expansion will most likely be into states contiguous to Illinois and could well center on more thrifts.
He ruled out a hostile acquisition and said his bank will wait to make another acquisition until it had "digested" Standard Federal.
But he also cautioned that this strategy could change if the pace of consolidation in the United States speeds up.
"What we do depends on what other market participants will do," Mr. Kalff said. "We don't want to be overtaken by others."
