ABN Amro will stop selling equity derivatives and its own structured products, including its range of leverage turbo certificates, and is also exiting its Asian markets business.

Increased regulations, changing customer needs and high cost of technology have led the state owned Dutch bank to review the activities of its markets division - part of the bank's merchant banking business - which sells structured products to clients worldwide.

The outcome of the review was that the products and services of markets will be more focused and will be entirely customer driven, the bank said in a statement.

Structured products
"We will stop producing our own structured products, including our turbos," a spokesman for the bank told SRP.

However, clients will still be able to buy third party structured products and turbos via the banks open architecture platform on an advisory basis, the ABN spokesperson confirmed.

The reorganisation, of which ABN Amro clearing is not part, will lead to around 100 job losses, half of them support roles, he said.

Going forward ABN Amro markets business, which employed around 300 people at the end of 2013 and generated €260m in revenues, will offer foreign exchange, interest and commodity derivatives, securities financing, bonds, and equity brokerage and research.

Markets
In the Netherlands, markets will offer more products online to commercial clients and its five regional treasury desks will be merged into a centralised office.

The new focus has also consequences for the geographical presence of the markets division. As a result of the change in direction its activities in Asia have become too small and will therefore be terminated, the bank said.

In Europe, ABN Amro will focus on services for energy, commodities and transportation (ECT) clients and financial institutions. Markets will remain in the United States, offering products ECT clients, financial institutions and Dutch clients.

SRP data
ABN Amro is one of the main providers of structured products in the Netherlands. Pre-2007 the bank was market leader with a share of 50% of the market.

ABN Amro was re-established in 2009, in its current form, following the acquisition and break-up of the original ABN Amro by a banking consortium led by Royal Bank of Scotland (RBS).

Since the new start the bank has launched 52 structured notes and issued 12,429 turbos in the Netherlands. Prior to the takeover by RBS the bank issued 335 structured notes, dating back to December 1999, as well as 10,542 turbos, which the bank first started marketing in April 2004.

Related stories: