ABN AMRO leading Holland's bank faces many risks. These include Interest rate risks, currency risks, equity risks, credit risks, liquidity risks and capital adequacy risks. The case outlines the risks and the mechanisms ABN AMRO employs to mitigate these risks.
Holland's
leading bank, ABN AMRO and its subsidiaries operated
more than 800 offices at home and another 2,600 in 75
other countries. In the US, ABN AMRO owned Chicago-
based LaSalle Bank and Standard Federal Bank, one of
Michigan's largest banks. ABN AMRO also had a large
presence in Brazil (through its ownership of Banco Real
and Paraiban) and Malaysia (where it had operated for
more than 100 years).ABN
AMRO has three major business segments: Private clients
and asset management, consumer and commercial clients,
and wholesale clients. Responding to the economic recession,
the bank was trimming staff at home and abroad. It was
also closing or reconfiguring about one-third of its
830 domestic branches.
ABN
AMRO is the product of a merger in 1991, of the Netherlands'
two largest banks Algemene Bank Nederland (ABN) and Amsterdam-Rotterdam
Bank (AMRO). ABN's history can be traced back to the
Netherlands Trading Society, founded in 1824, to finance
business ventures in the Dutch colonies, in the East
Indies. Although the firm weathered the First World
War and the depression, the Second World War was catastrophic.
Germany occupied the homeland and Japan took over the
Dutch East Indies. The Netherlands Trading Society never
recovered, and in 1964 it merged with Twentsche Bank
(founded in 1861 as an agricultural bank) to form ABN.
AMRO
had been formed by the merger of Amsterdam Bank and
Rotterdam Bank in 1964. Founded in 1863, Rotterdam Bank
financed commercial activity in the colonies before
refocusing on the shipping business through Rotterdam.
Amsterdam Bank had been founded in 1871 by several Dutch
and German banks and was the largest Dutch bank when
it merged with Incasso Bank in 1948. In 1964, the new
entity added the operations of Hollandsche Bank - Unie. |
