Dutch Bank Boosts Stake In European American
NEW YORK - ABN-Amro, the Dutch banking giant, announced Tuesday that it has acquired full control of European American Bank, a suburban New York bank that floundered under the ownership of a consortium of European banks.
ABN-Amro said it has acquired the 23.15% stake in EAB held by France's Societe Generale and the 10.5% stake held by Austria's Creditanstalt Bankverein. The Amsterdam-based company previously owned 66% of European American, which has $4.7 billion in assets.
ABN-Amro, which has $200 billion in assets, last year bought out two other minority shareholders, Germany's Deutsche Bank and Belgium's Generale Banque.
Premium Seen as Modest
The purchase prices have not been disclosed. Sources speculated, however, that ABN-Amro paid only modest premiums to buy out the minority shareholders because of European American's troubled portfolios of Third World and commercial loans.
ABN-Amro is the parent of LaSalle National Corp., a Chicago banking company with $7.4 billion in assets. Sources speculated that ABN-Amro may eventually strip European American of its money-losing operations and merge it will LaSalle.
Harrison Tempest, LaSalle's chairman and chief executive, was named last December as chairman and chief of European American. Mr. Tempest, who is based in Chicago, also heads ABN-Amro's North American operations.
Chicago Thrift Considered
LaSalle is separately holding talks on acquiring Talman Home Federal Savings and Loan Association, a profitable, but capital-deficient Chicago thrift with $5.9 billion in assets.
"We are looking for good possibilities to buy more banks in order to build a funding base for local corporate activities," an ABN-Amro spokesman said in a telephone interview from the company's Amsterdam headquarters.
European American, with 88 branches in metropolitan New York, has lost heavily in recent years on Third World lending and commercial real estate loans in the New York City area.
The bank, based in Uniondale on New York's Long Island, lost $5 million in the first quarter this year after reporting a $252.7 million loss for 1990.
The losses forced shareholders to set aside substantial provisions and to inject $173 million in fresh capital.
Executives at Societe Generale and Creditanstalt in New York made no secret of their satisfaction over the transaction.
|A Logical Conclusion'
"Trying up your capital in that sort of an arrangement, it didn't make sense strategically," said Frederick C. Hertel, general manager and chief executive for Creditanstalt in New York. "You can't have much of an effect on management when you're only a minority shareholder."
"It's a logical conclusion for us now that ABN-Amro is the main shareholder," said Jacques Bouhet, general manager for Societe Generale in New York. "It turned into no more than an investment for us."
"The whole bank has been an unmitigated disaster for them and for the other shareholders," said one banker who declined to be identified.