ABN Amroin Argentina recently closed a chapter of unprecedented trustee activism when a vehicle under its care sold a 93% stake in Nuevo Banco de Santa Fe to Banco de San Juan. Priced at Ps133 million (US$44.8 million), the holding was snapped up by ABN's trustee division back in May. Regulators approved, as isolating choice banking assets and liabilities into structured vehicles had already proven effective in containing bank collapses, said Hernan Gutierrez, managing director at ABN Amro Trust Argentina.
In the case of Santa Fe, the former majority owner, Banco General de Negocios (BGN), was being restructured after declaring insolvency. Rather than allow BGN's failure to destabilize Santa Fe, regulators OK’d ABN's purchase of the Santa Fe holding as well as other assets and liabilities cut loose from the restructuring. "We became the majority shareholder; it was really remarkable," Gutierrez said. The trust then issued notes, which were taken by Santa Fe at a rate that matched the return on the assets held in the vehicle.
Using a trust to separate out the Santa Fe shares warded off both insolvency and a costly judicial procedure, according to Mariano Salas, senior trust officer at ABN Argentina. He added that had Santa Fe fallen apart, as the leading piggybank of its namesake province, it would have taken down the regional economy. Following several months of guiding through a downsizing plan and other measures to strengthen Santa Fe, ABN was ready to return the bank to its own kind. Among the four banks that bid for the stake, San Juan offered the most, almost double the next largest figure.