RAPAPORT...  ABN Amro’s diamond and jewelry business is confident it will continue activity following the Dutch government’s recent acquisition of Fortis.

“The government’s equity stake in Fortis Netherlands and the Fortis acquired business of ABN AMRO  is a positive step in terms of stability for our clients and staff and provides the necessary financial stability and solvency. It also makes us less vulnerable to the credit crisis,” Victor Van der Kwast, CEO of ABN Amro International Diamond and Jewelry Group told Rapaport News. “We can continue our efforts and development path and the new government backing underpins our business.”

The Dutch government this past week agreed to buy Fortis Bank Nederland, including most of the bank’s ABN Amro holdings, for EUR 16.8 billion, as Fortis became the latest victim in the global credit crisis.

Fortis partnered with Royal Bank of Scotland and Banco Santander to buy ABN Amro for EUR 72 billion in 2007, splitting ABN Amro’s assets between them, with the diamond unit going to Fortis. The bank provides more than $3 billion credit to the diamond industry.

While the collapse of Fortis raised liquidity concerns in the diamond industry, Van der Kwast assured that the ABN Amro diamond unit was doing “very well and has grown its business and profitability” and would continue with its strategy as before.

“We are not calling loans or pulling any clients lines  though manage our business carefully,” he said. “We are trying as best we can to keep liquidity managed in a logical way and are quite selective in our choice of clients we can and do want to do business with.”

In the short term, Van der Kwast said the focus would be to stabilize the organization under the new structure and in line with the government’s strategy to stabilize the financial sector.

Once the markets stabilize, he added, it is likely that  ABN Amro will be floated as the government buyout is not meant to be a permanent move, and the European Commission is keen to drive and  preserve a fair competitive environment.

As part of the takeover, ABN Amro’s board is expected to be reviewed this week. No changes are expected in the leadership and the daily operations of the diamond unit.