Commonwealth Bank of Australia discusses buying ABN Amro branch

Wed, Jul 23 06:02 AM

SYDNEY, Australia (AP) _ Commonwealth Bank of Australia Ltd., the country's largest lender, said Wednesday it has entered exclusive talks to buy the local arm of Dutch investment bank ABN Amro.

"The proposal is incomplete, subject to further negotiation and subject to signing a final, binding agreement," CBA said in a statement. Australia's biggest bank by market value said it had entered a period of exclusivity in negotiations for ABN Amro Australia Holdings Pty.

Ltd. and that due diligence with Royal Bank of Scotland, which was part of a consortium that bought parent company, ABN Amro Holding NV, last year.

National Australia Bank Ltd. announced Tuesday night that it was no longer interested in buying ABN Amro Australia.

CBA said ABN Amro Australia would complement its existing business and enhance its range of financial markets services. The company operates investment and wholesale banking businesses in Australia and New Zealand.

A consortium comprising the Royal Bank of Scotland PLC, Fortis NV of Belgium and Banco Santander Central Hispano SA of Spain bought ABN Amro Holding NV for 70.5 billion (US$99 billion) in October last year the largest takeover ever in the financial industry. The ABN Amro acquisition depleted Royal Bank of Scotland reserves, which have been further reduced by the global credit squeeze.

RBS has announced write-downs and job cuts at ABN Amro as a result.

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