ABN Amro stops its financing of North America oil and gas sector
Dutch bank ABN Amro said it is ending its financing of the oil and gas sector in North America. The bank announced it was in the process of selling off its energy loan portfolio to investment firms Oaktree Capital Management and Sixth Street Partners.
The withdrawal will initially result in a 120 million euros loss for the bank, according to an estimate from the Telegraaf. However, the bank said that the loans were sold off at 135-million euro discount to book value, but that it will reduce its risk weighted assets by about two billion euros.
ABN Amro predicts this will have "a net positive impact on capital ratios in Q2 2021."
The portfolio includes loans made to about 75 businesses in the North American energy markets with a volume of 1.5 billion U.S. dollars. Total loan commitments equal about 3 billion euros. "As a result of the sale, ABN AMRO withdraws from oil and gas related lending in North America."
The branch dealing with the oil and gas sector in North America had a total of 15 employees. It is expected that about half of them will now be transferred.
The move is in line with the bank’s previously announced goal to accelerate the reduction of its non-core activities. ABN Amro said that transferring loans to the new owners would make more space for other investments.