On April 1, 2013 ABN AMRO sent a letter to its gold account clients that stated ABN AMRO would no longer offer physical delivery of precious metals.
Because I’m Dutch (the letter is also in Dutch), this looked like a default. The translation:
Changes in the handling of orders in precious metals
From April 1, 2013 ABN AMRO has a new custodian for the precious metals gold, silver, platinum and palladium. This is why we will change the way we handle and administer your investments in precious metals. In this letter you can read all about it.
What’s gonna change?
Because of the switch to the new custodian from April 1, 2013 the following things are gonna change for you:
– You can no longer let us make physical delivery of your precious metals investment account.
– Do you submit your precious metals orders via the ABN AMRO investment account? Than the payment for your orders from now on will be at the bid or ask prices that are valid on the market for precious metals. So no longer based on the mid-price, as you were used to.
- The bid price is the price that traders are willing to pay for the precious metals that is offered for sale, when you sell.
- The ask price is the price that traders want for selling the precious metals.
– We will valuate the positions in your investment account on precious metals from now on these bid prices.
You can read more on investing in precious metals in chapter 4 of the prospectus (additional conditions for investing in precious metals). You will find these conditions on abnamro.nl/voorwaardenbeleggen
What do I have to do?
You don’t have to do anything. We will take care for the changes in the way your investments in precious metals are handled and administered.
If you have any further questions about this letter you can all our Investment Servicedesk 0900-1474 (from abroad + 31 76 5491755). You can reach us monday to friday from 8:00 – 18:00.
If you would like to submit orders or if you have other questions regarding investing, you can call with your advisor or the Wealth Advice desk at 0900-9215 (from abroad +31 10 2407004). Our employees at the Wealth Advice desk can be reached monday to friday from 7:00 – 22:00 and saturday and sunday from from 9:00 – 17:30.
We are pleased to help you.
ABN AMRO Bank N.V.
After the letter was published the entire gold space exploded and the default of ABN AMRO on its gold obligations was taken for granted by many.
In recent months I stumbled on some sources saying that was not exactly what happened. Why not? I asked myself, it said so in the letter. No physical delivery is no physical delivery. Just to be sure I decided to give ABN AMRO’s press division a call yesterday for more information. They were familiar with the subject I was inquiring for, and could tell me a lot right away. The details they didn’t have at hand they sent me in an email the same day. This is the official story:
Prior to the fusion between ABN AMRO and Fortis bank in 2010, the European Commission required ABN AMRO to sell its subsidiary HBU (Hollandse Banken unie). HBU had always been ABN AMRO’s custodian and facilitated physical delivery for precious metals accounts. In 2010 HBU’s activities were sold to Deutsche Bank; this ended the HBU name. What happened in 2013 was that Deutsche bank announced that it would cease the activities, prior serviced by HBU, in The Netherlands because they wanted to get rid of the small traders. Consequently ABN AMRO was stuck without a division for physical delivery – by the way, something that very rarely occurred, according to ABN AMRO. The new custodian for ABN AMRO’s precious metals accounts became UBS in Switzerland. Because physical delivery rarely occurred, ABN AMRO decided not to provide this service to its customers anymore, however, clients could/can take physical delivery from Switzerland if they arrange transport themselves. Hire a transport company or drive to Zurich and back up the truck. When I asked if the accounts at UBS were allocated or unallocated, ABN AMRO replied that 80 % was allocated.
This is the translation of an email they sent me yesterday:
ABN AMRO has two accounts at UBS in Zurich. One is allocated and the other account is unallocated, the unallocated account is necessary because this facilitates buying and selling of gold (of course you can’t trade allocated gold). The allocated account is now about 80% of the gold stock. We manage these accounts ourselves.
We switched to UBS because the conditions of storage at Deutsche Bank changed to the detriment of ABN AMRO customers and we found a better partner in UBS. The halt in physical delivery (April 2013) had therefore only to do with the distance between Zurich and the Netherlands, which made cost-effective delivery just not feasible.
Jeroen van Maarschalkerweerd | Senior Press Officer | Press & PA | Communications & Sustainability
ABN AMRO Bank N.V.
Just wanted to give you another angle on this story. All it took me was one phone call, one email and some surfing on the web. As of yet I haven’t heard any ABN AMRO gold account holder complain he couldn’t get his physical gold out of Switzerland. If I do, I will surely report on it.